The Bureau of Customs (BOC) is encouraging companies to become its “trusted partners” by joining the Authorized Economic Operator (AEO) program, which provides trade facilitation benefits to accredited member firms to help sharpen their competitive edge.
Alvin Ogena, an IT officer at the BOC’s Management Information System and Technology Group, urged exporters and importers to become AEOs in order to fast-track their cargo clearance while enhancing the security of their supply chain.
“The function of this program is to strengthen the relationship between Customs and our stakeholders in the supply chain,” Ogena said in a presentation at the Philippine Exporters Confederation, Inc.’s (PHILEXPORT) first quarter general membership meeting.
Essentially, the AEO is a “trusted trader partnership” program where the agency provides incentives to companies proven to be highly compliant with customs rules and regulations and showing commitment to ensure their processes are secured well and documented properly, Ogena told stakeholders during his lecture at the hybrid event on March 14, 2023.
He stressed that the program does not seek an “adversarial” relationship between Customs and the company, but a collaboration to help companies improve their processes and be more competitive in the international trade arena.
For now, the BOC accredits only exporters and importers pursuant to Customs Memorandum Order 9-2020.
However, Ogena said the agency hopes to eventually include all the other supply chain stakeholders in the AEO program through the issuance of subsequent regulations.
Other parties eyed for inclusion in the AEO include non-vessel operating common carriers, freight forwarders, shipping lines and airlines, foreign suppliers, mutual recognition arrangement (MRA) partner companies, land transport operators, warehouses, customs brokers, and authorized agent banks.
To be issued AEO certification, applicant companies must go through an accreditation process and pass a number of criteria, the IT official said.
The accreditation process involves rigorous assessment and validation in accordance with the World Customs Organization SAFE Framework of Standards to Secure and Facilitate Global Trade.
The BOC is particularly focused on the company’s customs compliance history as well as security criteria, including cargo handling and safekeeping, record keeping and IT system, supply and trading partners, physical premises and access control, personnel complement, security training and threat awareness, and conveyance security.
To apply for AEO accreditation, the applicant should visit the AEO Philippines online portal to create an account and submit the documentary requirements.
Ogena said the application process is admittedly a long procedure that includes pre-screening, application, documentary evaluation and validation, and onsite inspection of the applicant’s facilities.
If the applicant passes all these stages, it is issued a pre-screening certificate and becomes an accredited Level 1 member.
Benefits at this level include exemption from renewal of accreditation, self-assessment, supplementary goods declaration, dedicated help desk, and other benefits consistent with the Revised Kyoto Convention (RKC).
The applicant is also given the chance to be issued Level 2 certification, which comes with additional benefits, added Ogena. Perks include a dedicated processing lane, advance clearance process, periodic lodgement, one-time exemption certificate, expedited customs clearance for exports, and other benefits under the RKC.
Ogena in his update said BOC has so far accredited three Level 1 companies—Panasonic, Coca-Cola and Toyota—and is expected to accredit more firms in the first quarter of this year.
Moreover, the Philippines has under its belt two MRAs, which recognize or accept one another’s conformity assessment results, with two major trade partners. These are the joint validation for AEO Philippines under the ASEAN AEO MRA, conducted in December 2022, and the Philippine-China MRA, signed in January this year.
The AEO Philippines program was launched on December 2, 2019 following the issuance of Customs Administrative Order 5-2017, and the Interim AEO Office was established in 2020.
Those interested to learn more about the AEO project may send an email to email@example.com or visit customs.gov.ph/aeo-philippines. To register to the program, check out the AEO portal at aeo.customs.gov.ph.