China, Uganda Boost Business Relations With New Agreement On AEO Mutual Recognition

China, Uganda Boost Business Relations With New Agreement On AEO Mutual Recognition

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By Spy Uganda

China and Uganda have signed a customs agreement on mutual Authorized Economic Operator (AEO) status, a move that will facilitate trade between the two countries, China’s top customs authority said on Thursday.

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This is the first arrangement on AEO mutual recognition signed between China and African countries, said the General Administration of Customs (GAC).

Under the agreement, companies that obtain the AEO status in the two countries will enjoy simplified customs procedures, such as reduced examination or prioritized clearance, when they export products to the other country.

The AEO system, initiated by the World Customs Organization, aims at facilitating customs clearance for enterprises through the authentication by customs agencies of enterprises with a high level of legal compliance, credit status and safety.

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China has signed mutual AEO agreements with 46 countries and regions, ranking first in the world in terms of the number of agreements, according to the GAC.

So What’s AEO?

According to the World Customs Organization (WCO), an authorized economic operator (AEO) is;

“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. Authorized Economic Operators include inter alia manufacturers, importers, exporters, brokers, carriers, consolidators, intermediaries, ports, airports, terminal operators, integrated operators, warehouses and distributors”

The essence of the AEO-concept can be found in the Customs-to-Business partnerships. Operators can be accredited by Customs as AEOs when they prove to have high-quality internal processes that will prevent goods in international transport to be tampered with. I.e.:

  • Ensure the integrity of the information, i.e. what is said to be in a container, really is in the container and nothing else, more, or less;
  • Ensure the integrity of its employees, that they will not put goods in the container that should not be there; and
  • Secure access to its premises, to prevent unauthorized persons to put goods in the container.

As a result, customs will trust the operator and perform less or no inspections on goods imported or exported by or via the AEO. This benefits the mover of the goods as goods are available more quickly, which means lower transport costs. Customs benefits as scarce inspection capacity can be targeted better at cargo of unknown and potentially unsafe operators.

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