China ranks first globally in number of AEO mutual recognition arrangements signed

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By Luo Shanshan, People's Daily

It marked the first time for China to host the event.

The conference, hosted by the WCO and co-hosted by the General Administration of Customs (GAC) of China and the municipal government of Shenzhen, was themed "harnessing the power of AEO programmes for inclusive and sustainable global trade."

More than 1,200 delegates from customs, international organizations, AEO enterprises, governments agencies, academic institutions, and industry associations from over 100 countries and regions gathered at the event, with an aim to advance AEO mutual recognition and promote trade growth.

So far, China has signed AEO mutual recognition agreements with 28 economies including Singapore, the European Union and South Korea, which cover 54 countries and regions. Both numbers rank first globally.

The AEO program is a core system of the WCO Framework of Standards to Secure and Facilitate Global Trade, under which customs authorities certify companies based on the latter's credit status, compliance records and security standards. As of the end of April this year, China was home to 5,882 AEO enterprises, whose foreign trade volume accounted for 36.3 percent of the national total.

"For enterprises, an AEO certificate not only means convenient customs clearance, but also serves as a prestigious endorsement," said Sun Yunsong, customs manager of SF Express' international supply chain business.

"With the assistance of Qianhai Customs under Shenzhen Customs, our company has finally obtained an AEO certificate. Certified enterprises have the highest credit rating from customs, and they can enjoy benefits such as fast customs clearance, low inspection rates, and international mutual recognition. AEO is also hailed as a 'green pass' and 'golden signboard' in global trade," Sun said.

Under the guidance of Kunming Customs, Yuxi Walvax Biotechnology Co. Ltd. obtained an AEO certificate in November 2023.

"The frequency of cargo inspections has significantly decreased, and the overall export time has been compressed from nearly a month to a matter of days, greatly enhancing the company's international market competitiveness," said Yin Guoqing, head of the company's international cooperation department.

In recent years, Chinese customs has implemented high-quality AEO facilitation measures to improve regulatory and service efficiency, allowing compliant companies to operate smoothly while reducing costs and increasing productivity.

According to reports, over the past two years, the average inspection rate for AEO enterprises was only 0.33 percent, 1/5 of that for conventionally managed companies, and AEO enterprises enjoyed expedited customs services 1.53 million times.

The AEO program is an important measure for customs to explore credit supervision, and promoting international AEO mutual recognition is an essential aspect of institutional opening up. After signing an AEO mutual recognition agreement, AEO enterprises recognized by one party can enjoy the same customs facilitation treatment as the recognized enterprises of the other party, which significantly reduces trade cooperation barriers and promotes international trade growth.

During the WCO Global AEO Conference, China signed AEO mutual recognition arrangements with Burundi and Iceland. According to the agreements, AEO enterprises from China and these two countries will enjoy four facilitation measures: lower inspection rates, priority inspections, designated customs liaison officer services, and prioritized clearance should trade be disrupted and resume.

Frederic Manirambona, commissioner of Customs Burundi, said that the agreement demonstrated the shared aspiration of the two countries to strengthen ties and promote cooperation on secure customs clearance and trade facilitation. Both sides will work together to create a more secure, efficient and predictable business environment for AEO enterprises, he added.

China is Iceland's largest trading partner in Asia. The signing of the AEO mutual recognition agreement between the two countries marked a new stage in customs cooperation between them. Snorri Olsen, commissioner of Iceland Revenue and Customs, said that the development of friendly relations between Iceland and China is unstoppable though the two countries are geographically distant.

"In our globalized operations, we have benefited from the efficiency gains and facilitation policies provided by the AEO program. We are beneficiaries of and witnesses to the AEO program," said Song Yiwen, president of the supply chain management department of technology company Honor, at the conference.

He hopes that customs authorities around the world would expand international AEO mutual recognition, continuously improve trade facilitation, and create a more open and collaborative AEO program, so as to bring benefits to all participants in global trade and achieve win-win outcomes.

Lin Jiantian, director of the GAC's Department of Enterprise Management and Audit-based Control, said he hopes customs administrations of all WCO members could promote the implementation of the AEO program across a wider scope and in more countries and regions. He also called for facilitating mutual recognition of AEO enterprises among more countries and regions, in order to provide them with greater policy dividends.