Mutual recognition

Definition/Scope

Mutual recognition of AEO refers to mechanisms developed by Customs administrations for the mutual recognition of AEO validations and authorizations, and Customs control results and other mechanisms that may be needed to eliminate or reduce redundant or duplicated validation and authorization efforts.

Problem statement

As stated under the Authorized Economic Operator, the investments to be made by industry to obtain such a status are significant. For companies trading in more than one country, these costs duplicate with each additional programme if such programmes do not recognize the present status of the company in another trading partner country.

Implementation guidance

The private sector lists mutual recognition as the number one tangible trade facilitation measure as they hope and believe that with mutual recognition the cost for revalidation and inspection can be avoided if two or more countries have agreed to mutually recognize each others programme.

The ultimate aim should be to develop a multilateral mutual recognition arrangement (MRA) in order to avoid establishing any new trade barriers. However, bilateral MRAs will be the reality for some time to come. In order to maximize the benefits deriving from such an MRA, the WCO has developed MRA guidelines to help drafting and implementing such a programme.

The ICC has developed a recommendation on mutual recognition in which they list the key features for any MRA to develop benefits to trade:

• A supply chain partner accepted as an AEO by a Customs administration that participates in the Framework will not be subject to multiple verifications of its status by participating administrations or other AEOs, i.e., that an AEO would not be subject to multiple inspections or verification by each AEO with which it does business.
• Supply chain partners will be able to apply for AEO status in their own participating countries.
• A supply chain partner accepted as an AEO by a Customs administration that participates in the Framework will be afforded programme benefits by all participating administrations, including those that are phasing in implementation.