AEO Program of China Customs By Xu Qiuyue Director General Department of Post Clearance Audit of GACC

Concept of AEO : AEO: Authorized Economic Operator AEO Program is: --One of the two pillars of Framework of Standards to Secure and Facilitate Global trade (SAFE)’, --A partnership cooperation program between Customs and trade --Aiming to secure and facilitate global supply train security.

AEO Program of China Customs

AEO Program of China Customs A. China’s Practices on implementing AEO Program. 1.Transforming AEO concept into an internal program: Measures on Classified Management of enterprises (MCME)—AEO program of China Customs was entered into forced on 1st April 2008.

AEO Program of China Customs 2. Establishing Verification Audit system. Provisional Measures for the Customs Verification Audit was publicized on 30th April 2008 which specifies the rules, procedures, methods, and contents of Verification Audit for AEO. Operational criteria of Customs Verification Audit was established in December 2008 which includes 35 criteria in 4 groups.

AEO Program of China Customs 3. Developing a computer system named Integration Management system of Enterprises Information in August 2009. To help customs gather internal and external information of companies and link the status of companies to the declaration system. 4.Others measures: introducing AEO concept to customs and publics, training.

AEO Program of China Customs B. Main contents of MCME 1.Main contents of MCME --Scopes: consignors and consignees, customs brokers (that includes 6 types of operators: importers, exporters, manufacturers, warehouse operators, customs brokers, freight forwarders)

AEO Program of China Customs --5 categories: Class AA: the highest class, AEO of Chinese Customs Class A: the high class, preliminary AEO Class B: normal class Class C: the lower class Class D: the lowest class

AEO Program of China Customs --Criteria of classifying: --Enterprises' level of compliance with laws, regulations, Customs rules and relevant anti-corruption provisions; --Operational and managerial performance, status of safety and security; --Records kept in the process of Customs control and Customs statistics compilation. --Management principles : --Facilitating compliance and safety, different management measures for different categories --Enterprises of Class AA and Class A can enjoy facilitation benefits; --Enterprises of Class B shall be subjected to regular measures --and enterprises of Class C and Class D shall be subjected to strict control.

AEO Program of China Customs --Number of categories ( Up to June 2010 )： --AA：1560 --A：21198 --B：421094 --C：865 --D：184

AEO Program of China Customs 2.companies of Class AA: Companies of Class AA are AEOs of China Customs, and should: --comply with Customs laws and regulations; --have a good financial status. --have a strict internal control system; --comply with supply train security requirements; --be subject to Customs verification Audit.

AEO Program of China Customs Benefits linked to Class AA of consignees and consignors of importers and exporters: --Trust release; --Assigning specific people to help companies coordinating and resolving difficult customs issues. --Applying lower examine rate to their import and export cargoes;

AEO Program of China Customs And including benefits to Class A: --Declarations at registration place, and inspections and clearance procedures at ports --Giving priority to send people to enterprises, carrying out checks and inspections of the production or assembling and disassembling links --Performing inspection and clearance formalities at the business site …

AEO Program of China Customs --Giving priority to handling urgent customs clearance formalities out of working hours and during holidays --Performing The Nominal Payment of The Bank Guarantee Deposit Account System or not operating The Bank Guarantee Deposit Account System --Giving priority to handling processing trade formalities such as entering records modifying and reporting for verification purposes --Giving priority to handling declaration registration formalities.

AEO Program of China Customs 3.Verification Audit --Standards of Verification Audit, following into internal control, compliance with import and export laws and regulations, financial status and trade security, totally 35 criteria of 22 items in 4 groups. --Methods of Verification Audit: paper checking, observing on the spot , inquiry and conversation. --Monitoring: daily monitoring, and post audit.

Practices on International cooperation of AEO by China Customs

Practices on International cooperation of AEO by China Customs A. China-EU: --3 rounds of meeting on legislation comparison of AEO programs were held in 2008 under SSTL Pilot; --Exchanging visits of Joint Audit were made in 2009. --A report of evaluation and recommendations to JCCC is being drafted. --The MRA is expected to be signed by the end of 2010. B. China-US: --A Joint statement about Joint Validation Pilot was signed in 2008; --3 rounds of Joint Validations Pilot were made during 2008-2010, 40 Chinese manufacturers were validated and 34 got passed. --Pilot evaluation and a new Cooperation plan are being made.

Practices on International cooperation of AEO by China Customs C. China-Japan, Korea: -- The first Tripartite Working Group on AEO was held in September 2009, mapping out the goal and action steps on AEO cooperation among the three parties. D. China- Singapore: -- AEO working group was established in 2009; --Legislation comparison was made in January 2010.

Working plan of next step

Working plan of next step A. Improve the AEO Program of China Customs --To revise MCME --To Improve the Integration Management system of Enterprises Information B. To implement AEO mutual recognition step by step

Thank you!