Authorized Economic Operator (AEO)

Definition/Scope

An Authorized Economic Operator (AEO) is defined by the WCO SAFE Framework of Standards as a party involved in the international movement of goods, in whatever function, that has been approved by, or on behalf of, a national Customs administration as complying with WCO or equivalent supply chain security standards. AEOs include inter alia manufacturers, importers, exporters, brokers, carriers, consolidators, intermediaries, ports, airports, terminal operators, integrated operators, warehouses and distributors.

Problem statement

Since many years, in some cases even since the 1970s, Customs administrations have been increasingly involved in the security of the international trade supply chain, and have more recently developed security programmes in a global context. The AEO is part of these programmes and the WCO adopted an international AEO standard, the SAFE Framework of Standards, in 2005. Since then, traders have to make, in a number of cases, substantial investments in order to obtain AEO status and must continue to invest to maintain such a status. However, in return, Customs often do not offer substantial benefits in the form of trade facilitation, which increases the cost of trading. Consequently, the uptake of AEO programmes worldwide is slow.

Implementation guidance

Customs should work on a substantial benefits package as part of their AEO programme in close consultation with their trading community. Standard 6 of Pillar II of the WCO SAFE Framework of Standards encourages cooperation between Customs and trade for maximising security and facilitation. However, this standard puts security before facilitation, which is part of the dilemma. To overcome this, the WCO developed specific AEO Guidance (contained as Chapter 5 in the SAFE Framework of Standards) and an AEO benefits paper, which was a private sector contribution. These benefits include fewer inspections and priority treatment for inspections, mutual recognition with foreign AEO programmes, reduced security and guarantee requirements, expedited release and pre-clearance, simplified procedures, priority treatment in emergency situations, etc.

Additional information (references, examples, etc.)

The WCO has complied all relevant material relating to the SAFE Framework of Standards and the AEO programme in the WCO SAFE Package.