In a statement released on January 21, 2021, the United States and the United Kingdom have formally agreed to recognize each other’s authorized economic operator (AEO) programs.
Authorized economic operator programs allow low-risk members of the trade community who meet internationally-recognized supply chain security standards to enjoy trade facilitation benefits. AEO status is an internationally recognized quality mark that indicates that a business’s role in the international supply chain is secure and has customs control procedure in place that meet international standards and criteria.
Under the new agreement, U.S. Customs and Border Protection will accept the validation of UK Authorized Economic Operators (AEO) and grant them approval status in the Customs Trade Partnership Against Terrorism (CTPAT). Her Majesty’s Revenue and Customs will likewise accept the validation of CTPAT members and grant them approval status as AEOs.
Customs Trade Partnership Against Terrorism is the U.S.’ voluntary, public-private partnership through which members of the trade community cooperate with CBP to protect the supply chain, identify security gaps, and implement specific security measures and best practices. By meeting stringent supply chain security requirements, CTPAT members enjoy benefits including risk mitigation and shorter wait times at U.S. borders. Since its inception in 2001, CTPAT has grown to include more than 11,400 certified partners throughout the trade community.
“This arrangement will take U.S.-UK cooperation on supply chain security to the next level,” said William A. Ferrara, Executive Assistant Commissioner of the U.S. Customs and Border Protection Office of Field Operations. “Mutual recognition of the U.S. and UK authorized economic operator programs will mitigate risks, improve information sharing, and eliminate red tape for our partners in the trade community.”
WHAT ARE OTHER NORTH AMERICAN AEO PROGRAMS?
- In Canada, the program operates under the name Partners in Protection (PIP).
- In the United States, it is known as Customs Trade Partnership Against Terrorism (CTPAT).
- In Mexico, the program is called Authorized Economic Operator (AEO).
WHAT ARE THE BENEFITS?
AEO programs make border processes more efficient for pre-approved businesses recognized as low risk. Additionally, membership in an AEO program can facilitate trade for importers, exporters, carriers and others in their supply chains, as well as enhance marketability and global competitiveness.
- By being considered low risk by customs authorities, AEO companies are less likely to experience border delays due to examinations.
- AEO companies can also benefit from faster access to the border and business resumption benefits in the event of border disruptions. This results in time savings, less risk of spoiled perishable goods, and a more predictable border experience overall.
- By incorporating various security measures, AEO companies reduce the risk of potential tampering to their shipments. This builds confidence with customs and border authorities and enhances a company’s reputation and marketability.
Partnerships are also in place with other customs administrations, to extend AEO benefits to other international markets. These partnerships, known as Mutual Recognition Arrangements (MRAs), allow AEO companies to receive border facilitation benefits in other countries.
- Through MRAs, our three nations recognize each other’s AEO programs. Once a member is validated, AEO members are granted country specific benefits.
- In addition to the MRAs signed between North American partners, each country has multiple MRAs with other customs administrations and continue working towards reaching MRAs with various AEO programs around the globe. This means your business could be recognized as an AEO in a growing number of countries, further enhancing your company’s global competitiveness.
- AEO members who wish to receive MRA benefits must grant their respective program the consent to share the agreed upon information. To provide consent, please follow your AEO program’s guidance.
In December 2020, the United States and the United Kingdom also signed a Customs Mutual Assistance Agreement (CMAA) that provides a legal framework for the exchange of information and evidence to assist countries in the enforcement of customs laws, including duty evasion, trafficking, proliferation, money laundering and terrorism-related activities.
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