At the beginning of May, the EU and USA formally agreed to recognise each other’s certified trusted traders, which should make life easier and cheaper for many transatlantic traders. Henrietta Clarke explains.

Introduction

The agreement will result in lower costs, simplified procedures and greater predictability in transatlantic activities. Companies recognised as safe traders will benefit from faster controls and reduced administration for customs clearance. Mutual recognition will also improve security on imports and exports by enabling customs authorities to focus attention on real risk areas. It was agreed to implement the mutual recognition decision from 1 July 2012.

Imports and exports between the EU and USA accounted for almost €500 billion in 2011. This agreement should further boost trade opportunities and contribute to the smooth flow of goods between the two sides without compromising security. The mutual recognition of trade partnership programmes also has the benefit of preventing the proliferation of incompatible standards and promoting harmonisation of customs practices and procedures worldwide.

Authorised Economic Operators

At present, there are about 5000 companies approved as Authorised Economic Operators (AEOs) in the EU. European companies have been able to apply for AEO status since 2008. It can be granted to any economic operator established in the EU that meets the following common criteria stipulated in customs law:

  • an appropriate record of compliance with customs requirements

  • a satisfactory system of managing commercial and transport records that allow appropriate customs controls

  • proven financial solvency

  • appropriate security and safety standards.

AEO status allows companies to benefit both from simplifications provided for by the customs rules and/or facilitation with regard to customs controls related to security and safety, according to the type of certification they obtain. Under the security framework that has been applicable since July 2009, economic operators have to submit pre-arrival and pre-departure information on goods entering or leaving the EU. The security type of AEO certificate and the combined certificate allow their holders to benefit from facilitations with regard to the customs controls relating to security.

The AEO status therefore identifies safe and reliable businesses engaged in international trade with high standards of security and compliance. These companies are then highly trusted trade partners at customs checks. Fewer inspections on goods are necessary and formal customs procedures are quicker to fill in, so goods can move faster from one place to another, which helps to lower transport costs. More effective container inspection can lead to important cost savings for companies, in particular SMEs. There is also a benefit to EU customs administrations, which can concentrate their efforts on checking high-risk transactions.

Under the new agreement, the EU and USA will recognise each other’s security certified operators so that authorised economic operators in the EU will receive benefits when exporting to the US market and the EU will reciprocate for certified members of the US Customs-Trade Partnership Against Terrorism (C-TPAT). Mutual recognition of trade partnerships helps to improve protection against terrorist attacks.

Mutual recognition

The EU wants its major trade partners across the world to recognise the AEO status to facilitate and protect international trade even more in the future. Switzerland, Norway and Japan already mutually recognise the EU’s certification and a similar agreement is being explored with China.

The Transatlantic Economic Council is the central political platform for EU–US co-operation on a wide range of high-profile regulatory and strategic issues, with the objective of furthering trade and investment and ultimately growth and jobs. It offered important political support to achieve the EU–US mutual recognition.

Last reviewed 2 August 2012