Implementing the Sino-EU Mutual Recognition Arrangement for Authorized Economic Operators

From 1st November 2015, China and the EU Customs decided to officially implement the “AEO” mutual recognitions. What is “AEO”? What benefits “AEO” can bring to enterprises?

AEO is the English abbreviation of "Authorized Economic Operator", AEO system is advocated by the World Customs Organization (WCO) for achieving "FRAMEWORK OF STANDARDS TO SECURE AND FACILITATE GLOBAL TRADE". Customs provide custom clearance facilitations to law abiding, trustworthy and safe enterprises, to build a partnership relationship between Customs and enterprises. Enterprises with AEO certification may include any enterprise who participates in the international circulation of goods by any ways, who is also presently identified by Customs as a party complied with the WCO or the corresponding supply chain safety standards. These enterprises may include manufacturers, importers and exporters, Customs brokers, carriers, storage operators and distributors and so on.

What benefits “AEO” can bring to enterprises

  1. Customs of China and EU grant the following Customs clearance facilitation to imports and exports of AEOs of each other: reduction of formalities including inspection and risk evaluation concerning supervision; recognition of safe trade partnership; prioritized Customs clearance for goods; safeguard mechanism for continuous operation of trade.
  2. The AEOs certified by Chinese Customs may enjoy the Customs clearance facilitation provided by EU Customs with respect to the goods directly exported to/imported from EU.
  3. The AEOs certified by EU Customs may enjoy the Customs clearance facilitation provided by Chinese Customs with respect to the goods directly exported to/imported from China.

AEO certification is not once and for all

Enterprises need to pay attention to: Customs will do recertification to senior Authorized enterprises every three years, will do recertification to general authorized enterprises not regularly. Although AEO certification will bring Customs clearance facilitation to enterprises, Customs will impose strict punishment on enterprises once violation of regulations or illegality is found of any enterprise. Enterprises should always regulate their business operations, whether before or after certification of AEO, and regularly conduct internal and external compliance audit, so that problems will be found timely and according corrections are made.