China ranks first globally in number of AEO mutual recognition arrangements signed

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China ranks first globally in number of AEO mutual recognition arrangements signed

By Luo Shanshan (People's Daily) 14:20, May 23, 2024

The 6th World Customs Organization (WCO) Global Authorized Economic Operator (AEO) Conference was held in Shenzhen, south China's Guangdong province from May 8 to 10. It marked the first time for China to host the event.

The conference, hosted by the WCO and co-hosted by the General Administration of Customs (GAC) of China and the municipal government of Shenzhen, was themed "harnessing the power of AEO programmes for inclusive and sustainable global trade."

Automation and intelligent technologies applied at ports are providing greater space for the development of the AEO program. Photo shows unmanned cranes loading containers onto a container vessel at an automated terminal of the Qingdao port in east China's Shandong province. (People's Daily Online/Han Jiajun)

More than 1,200 delegates from customs, international organizations, AEO enterprises, governments agencies, academic institutions, and industry associations from over 100 countries and regions gathered at the event, with an aim to advance AEO mutual recognition and promote trade growth.

So far, China has signed AEO mutual recognition agreements with 28 economies including Singapore, the European Union and South Korea, which cover 54 countries and regions. Both numbers rank first globally.

The AEO program is a core system of the WCO Framework of Standards to Secure and Facilitate Global Trade, under which customs authorities certify companies based on the latter's credit status, compliance records and security standards. As of the end of April this year, China was home to 5,882 AEO enterprises, whose foreign trade volume accounted for 36.3 percent of the national total.

"For enterprises, an AEO certificate not only means convenient customs clearance, but also serves as a prestigious endorsement," said Sun Yunsong, customs manager of SF Express' international supply chain business.

With the assistance of Qianhai Customs under Shenzhen Customs, the company has finally obtained an AEO certificate, Sun said. Certified enterprises have the highest credit rating from customs, and they can enjoy benefits such as fast customs clearance, low inspection rates, and international mutual recognition. AEO is also hailed as a 'green pass' and 'golden signboard' in global trade.

Under the guidance of Kunming Customs, Yuxi Walvax Biotechnology Co., Ltd. obtained an AEO certificate in November 2023.

"The frequency of cargo inspections has significantly decreased, and the overall export time has been compressed from nearly a month to around three days, greatly enhancing the company's international market competitiveness," said Yin Guoqing, head of the company's international cooperation department.

In recent years, Chinese customs have implemented high-quality AEO facilitation measures to improve regulatory and service efficiency, allowing compliant companies to operate smoothly while reducing costs and increasing productivity.

Officers of Tongle Customs under Shenzhen Customs launch AEO certification for AEO enterprises. (Photo from the public account of the information office of the Shenzhen municipal government on WeChat)

According to reports, over the past two years, the average inspection rate for AEO enterprises was only 0.33 percent, 1/5 of that for conventionally managed companies, and AEO enterprises enjoyed expedited customs services 1.53 million times.

The AEO program is an important measure for customs to explore credit supervision, and promoting international AEO mutual recognition is an essential aspect of institutional opening up. After signing an AEO mutual recognition agreement, AEO enterprises recognized by one party can enjoy the same customs facilitation treatment as the recognized enterprises of the other party, which significantly reduces trade cooperation barriers and promotes international trade growth.

During the 6th WCO Global AEO Conference, China signed AEO mutual recognition arrangements with Burundi and Iceland. According to the agreements, AEO enterprises from China and these two countries will enjoy four facilitation measures: lower inspection rates, priority inspections, designated customs liaison officer services, and prioritized clearance should trade be disrupted and resume.

Frederic Manirambona, commissioner of Customs of Burundi, said that the agreement demonstrated the shared aspiration of the two countries to strengthen ties and promote cooperation on secure customs clearance and trade facilitation. Both sides will work together to create a more secure, efficient and predictable business environment for AEO enterprises, he added.

China is Iceland's largest trading partner in Asia. The signing of the AEO mutual recognition agreement between the two countries marked a new stage in customs cooperation between them. Snorri Olsen, commissioner of Iceland Revenue and Customs, said that the development of friendly relations between Iceland and China is unstoppable though the two countries are geographically distant.