China AEO Program China Customs August 2013

OUTLINE Introduction of MCME AEO Mutual Recognition 1 AEO Program Implementation 2 Introduction of MCME 3 AEO Mutual Recognition 4 AEO Benefits Implementation

AEO Program Implementation In June 2005, China Customs signed the Letter of Intent to implement the WCO SAFE Framework 1

Chinese national regulation 1 AEO Program Implementation Transfer the AEO Program into National Legislation 1 Chinese national regulation AEO Essential requirement Facilitation measures Verification procedure Security Concept Standard

AEO AEO Program Implementation 1 MCME Measures on Classified Management of Enterprises AEO

1.1 Applicant of the AEO program AEO Program Implementation 1 1.1 Applicant of the AEO program Current scopes: consignees and consignors, importers and exporters, manufactures and the processing trade enterprises, bonded warehouse keepers, forwarders, brokers Future scopes: carriers, seaport and airport operators, and the enterprises who involved in international trade supply chain

1 1.2 Enterprise Classification AEO Program Implementation Class AA: the best class, AEO of China Customs Class A: the better class, preliminary AEO Class B: normal class Class C: the worse class Class D: the worst class

Development of classification status AEO Program Implementation 2008 2009 2010 2011 2012 AA (consignees & consigners / Customs brokers) 805 (805 / 0) 1460 (1447 / 13) 1704 (1664 / 40) 2094 (2024 / 70) 2337 (2161/ 176) A 15051 21876 22797 25194 28426 B 410034 432560 444171 474174 508730 C 818 1180 910 858 958 D 340 384 202 178 254

1.3 Customs-Enterprise Cooperation Strengthen cooperation AEO Program Implementation 1.3 Customs-Enterprise Cooperation Strengthen cooperation Exchange information regularly Keep operational contacts

2 Introduction of MCME MCME: Measures of the General Administration of Customs of the People’s Republic of China on Classified Management of Enterprises

Introduction of MCME 2.1 Application criteria for Class AA Criteria 2 compliance with Customs law and requirements internal control procedures accuracy of declarations Criteria records of trade and transportation financial solvency Security compliance with other government agencies

specific customs officer 2 Introduction of MCME 2.2 Facilitation measures for Class AA Facilitation measures B E C D A specific customs officer priority to clearance formalities priority to handling urgent customs clearance formalities professional declaration training and job assessments lower customs inspection rate

Introduction of MCME 2.3 Procedure of class AA authorization 2 Document submission Local Customs Office → Regional Customs → GACC Verification of class AA enterprises verifying enterprise’s Integrity evaluating Compliance ability supervising internal operational management and trade security

2 Introduction of MCME 2.4 Sustainable management to class AA Enterprises Assessment Report on Business Operating and Management Status every year Audit Report every year Business Form on the Import and Export every half a year Revalidation every 3 years.

China and Singapore AEO MRA signed on June 2012 AEO Mutual Recognition 3 AEO Mutual Recognition 3 China and Singapore AEO MRA signed on June 2012

3 AEO Mutual Recognition 3 China and Korea AEO MRA signed on June 2013

China and the European Union 3 AEO Mutual Recognition 3 China and the European Union China-EU Smart and Security Trade Lanes Pilot (SSTL) AEO Mutual Recognition

China and US C-TPAT Joint Validtaion AEO Mutual Recognition 3 AEO Mutual Recognition 3 China and US C-TPAT Joint Validtaion AEO Mutual Recognition

AEO Mutual recognition Comparison of AEO program 3 AEO Mutual Recognition 3 China and Japan AEO Mutual recognition Comparison of AEO program

China and Taipei, Hongkong AEO Mutual recognition 3 AEO Mutual Recognition 3 China and Taipei, Hongkong AEO Mutual recognition Comparison of AEO program and Observation

4 AEO Benefits Implementation Contents Overview on Customs Clearance Procedure Implementation AEO benefits Registration of AEO information Identification AEO status and grant benefits by H2000 system 3. Circular to the trades

4 AEO Benefits Implementation

4 AEO Benefits Implementation Registration of AEO information --Registration local companies classification in 5 groups: AA, A, B,C,D Company code(10 numbers): XXXXXXXXXX (connected with company’s classification) --Receive AEOs information from the Counterpart Counterpart’s AEO code: AEO XX XXXXXXXXXXXXXXX --Storage of Information Companies code Countrepart’s AEO code Data base Companies Registration System H2000 system (cargo declaration system)

4 AEO Benefits Implementation Identification AEO status and grant benefits by H2000 system China Importation procedure: Chinese Importer’s code, Agent’s code Counterpart’s Exporter AEO code Counterpart’s exporter AEO code will be input to the Remark volume of the Import Declaration Form. H2000 system will identify the status of the Chinese importer’s status, agent’s status and the counterpart’s status by examine their code. And grants benefits of lowering risk, priority treatment, expedited processing and release of the shipments where the AEO is involved. Declaring agent H2000 system Data base

4 AEO Benefits Implementation A circular will be release to the trade Contents: Importing from a Counterpart: For imports from a Counterpart AEO exporter, the Chinese Importer may receive a Counterpart’s AEO code from the Counterpart AEO exporter. Alternatively, the Chinese importer may approach the Japan AEO exporter for the code. The counterpart AEO code will have alphanumeric characters. When making the import declaration in H2000, the Chinese importer or its declaring agent should input the AEO code given by the Counterpart to the Remark volume, i.e. “AEOUKXXXXXXXXXXXXXXX”

4 AEO Benefits Implementation Illustration of procedures to enjoy Mutual Recognition benefits: Counterpart’s AEO Exporter Chinese Importer AEOKRXXXXXXXXXXXXXXX H2000 Remark field

THANK YOU FOR YOUR ATTENTION Shao Weijian China Customs Email: shaoweijian@customs.gov.cn Tel: +86-10-65195382