The Challenge
Under AEO programmes, which already exist in several Latin American and Carribbean countries, companies who comply with the supply chain security standards in the World Customs Organization’s SAFE Framework of Standards, are awarded Authorised Economic Operator status by customs. These companies benefit from reduced inspections on goods and quicker clearance times at borders. For example, in Brazil, export and import clearance for AEO companies is on average 65% and 81% faster than those of non-AEO companies. Such programmes also allow customs to focus inspections on unknown high-risk cargo, making their operations more efficient and strengthening security.
However, for AEO programmes to further benefit regional trade, the AEO status awarded in one country should be recognised by its regional trading partners as well. Regional Recognition Arrangements can enable an AEO status company to benefit from favourable treatment while trading in all signatory countries.
What We Are Doing
The Alliance worked with eleven Latin American and Caribbean countries to establish an AEO Regional Recognition Arragement. The arrangement between Argentina, Bolivia, Brazil, Colombia, Costa Rica, Chile, Dominican Republic, Guatemala, Paraguay, Peru, and Uruguay has the potential to boost intra-regional trade by making it simpler, faster and more cost-effective for AEO companies to trade across the region. Our project supported the RRA negotiations and joint site validations that were essential for the signing of the arrangement.
We also brought in the voice of business to ensure that the agreement delivers real benefits for traders and governments. We are surveying AEO companies to gather their experiences of AEO programmes, ideas for improvements and views on best practices.
The Alliance is also supporting the design and development of an IT platform for the participating countries to efficiently manage and exchange AEO data.
This is vital to ensure the benefits of being an AEO company are realised in practice.
The Impacts
The agreement means that AEO companies are able to trade throughout the region with fewer physical and documentary inspections of their goods, faster border clearance times, and ultimately reduced costs.
Meanwhile customs agencies are be able to increase their administrative efficiency by allocating their human and technical resources to high-risk shipments. Underpinning all these benefits will be a trusted and constructive working relationship between the government and business.
