A. General Information
EU – USA: Mutual recognition of AEO and C-TPAT
B. Lessons Learned
European Union and the United States of America (U.S.) have signed since 2012 the mutual recognition of their respective trade partnership programs, namely the Customs-Trade Partnership Against Terrorism (C-TPAT) program in the U.S. and the Authorised Economic Operator (AEO) program in the EU ('the Decision').
The agreement has enabled information exchange between Customs Administrations oversees on the companies accredited as trusted by the respective trade partnerships programs.
Customs Simplified Clearance of goods
The exchanged AEO data is used in the context of the risk assessments and the targeting of declarations for goods and overall (online) validation of declarations for goods entering or leaving the Customs territory (including transit).
The exchanged data shall therefore be up-to-date and highly available.
G2G information exchange/Bilateral AEO MRAs
Data is being exchanged automatically every 24 hours through official government channels. Data is encrypted and the exchange mechanism put into place is protected by firewalls, security certificates, and other protective measures to ensure that the information is not compromised by anyone.
Data to be exchanged under this MRA includes:
a) name of operator;
b) address;
c) status of membership;
d) validation or authorization date;
e) suspensions and revocations;
f) the unique identification number (EORI number or C-TPAT Account number);
and g) details that may be mutually determined between the customs authorities, subject, where applicable, to any necessary safeguards.
• Common Standard/Trade Facilitation - Companies only have to conform to one set of security requirements. Avoiding the burden of addressing different sets of requirements as a shipment moves through the supply chain in different countries facilitates international trade. Moreover, since MR is based on both programmes having equally stringent security criteria, companies will have an easier task in documenting that their business partners comply with both programmes' security requirements.
• Reduced Number of Validations – Unnecessary validations are avoided with companies no longer being validated twice, i.e. a first validation visit conducted by the local customs administration at the moment when the company is certified as AEO and a second validation visit conducted by C-TPAT in the event that no MRA was in place. Moreover, duplication of revalidation visits is also avoided. 1 MRA is signed between the American Institute in Taiwan (AIT) and the Taipei Economic and Cultural Representative Office (TECRO) in the United States. C-TPAT and Taiwan AEO are the designated parties responsible for implementing the MRA. 4
• Faster Validation Process – By accepting the status of a foreign facility as AEO certified, C-TPAT no longer needs to conduct a validation visit there. This means that the C-TPAT validation process is faster and more efficient.
• Fewer controls - The status of the trade partnership programme participant is recognized by both programmes and it is used as a risk-assessment factor in the automated targeting systems. This reduction is applied at the consignment level. Importers, exporters, and manufacturers are entitled to this reduction.
• Efficiency - C-TPAT does not have to expend its limited resources to send its staff overseas to validate a facility that has already been certified by the AEO programme.
• Transparency in Operations - A closer collaboration among customs administrations and between customs administrations and members of their trade partnership programme should lead to more transparency in international commerce. Similar security platforms and the exchange of information between all of these partners expedite and facilitate the movement of legitimate international commerce.
• Marketability – Both AEO and C-TPAT companies are considered secure and reliable traders by both the U.S. and the EU authorities respectively. This seal of approval increases a company’s marketability and overall brand equity all over the world leading to further business opportunities.
C-TPAT is a voluntary government-business initiative to build cooperative relationships that strengthen and improve overall international supply chain and U.S. border security. C-TPAT recognized that U.S. CBP can provide the highest level of cargo security only through close cooperation with the ultimate owners of the international supply chain such as importers, carriers, consolidators, licensed U.S. customs brokers, and manufacturers.
AEO is a partnership programme based on World Customs Organisation (WCO) standards. It is used as a risk-assessment tool, provides less redundancy and duplication efforts, helps provide a common standard for trade facilitation, and allows for better transparency by providing closer collaboration among customs administrations and between customs administrations and members of their trade partnership programme.
C. Relevant Standards
https://ec.europa.eu/taxation_customs/dds2/eos/aeo_home.jsp?Lang=en