Keynote Speech by Kunio Mikuriya: WCO Global AEO Conference

18 abril 2012

WCO Global AEO Conference

Seoul, 17 April 2012

Keynote Speech by Kunio Mikuriya, Secretary General of the World Customs Organization

Honourable Vice Minister, Shin Je-Yoon, Commissioner Joo Yung-Sup, Ladies and Gentlemen, good morning.

On behalf of the WCO and its Members, I would like to express our sincere gratitude to the government of the Republic of Korea for organizing and hosting the first Global AEO Conference. Without your tremendous efforts and support, this would not have been possible.

The Korea Customs Service (KCS) is a valuable and active Member of the WCO. Its substantial contribution is felt at many levels. In 2011, KCS established the CCF-Korea fund, which provides a substantial amount of capacity building assistance to developing countries, in particular through the development of Customs-Business partnerships, such as Authorized Economic Operator (AEO) programmes. KCS also acts as a hub in the Asia-Pacific region by hosting a Regional Training Centre (RTC) and the Regional Intelligence Liaison Office (RILO).

I would also like to thank other sponsors of the Conference, as well as donor organizations, such as the IDB, JICA and SIDA that helped to ensure that we have representatives of all six WCO regions here in the audience.

As 2012 is dedicated to “Connectivity” by the Customs community, it is timely that we are discussing AEO programmes, which is in essence about connecting Customs administrations with compliant traders. Moreover, mutual recognition of AEOs is a further step towards promoting connectivity between Customs administrations.

The concept of the Customs-business partnership in the form of an “Authorized Person” is outlined in the WCO Revised Kyoto Convention. Building on this concept, the WCO SAFE Framework of Standards further elaborates the Authorized Economic Operator (AEO) concept that provides a foundation for a modern approach to public-private partnerships.

In many countries, AEO has become a flagship programme for Customs authorities, as it offers an opportunity for Customs to share its security responsibilities with the private sector, while at the same time rewarding them with a number of facilitation benefits. Partnership programmes with the trade allow Customs to do more with less, and aim at ensuring sustainable and long-term compliance through incentives, such as reduced levels of control, periodic reporting, deferred payment, and reputational benefits.

Even though the AEO concept was originally driven by security, it has grown to address risks and compliance in other areas as well, such as revenue assurance for example. As Customs has to tackle evolving and emerging risks at borders, including narcotic traffic, fake medicines and counterfeits that threaten the health and safety of citizens, and environmental crime, it is imperative to strengthen trusted trader programmes to fight against organized crime and terrorist threats. Thus, AEO will help Customs and the trade to find the right balance between security and trade facilitation, and ensure that, in times of stringent budgets, limited resources are focused on high-risk cargo.

In achieving a secure end-to-end supply chain, the AEO concept embraces all transport modes – maritime, air and land. Furthermore, it has the potential to be aligned with similar programmes owned by other regulators, in particular the International Ship and Port Code of the International Maritime Organisation (IMO) and the Regulated Agent/Known Consignor Programme of the International Civil Aviation Organisation (ICAO). We are already having discussions at intergovernmental level, and are moving towards closer cooperation. But the real benefits of cooperation will be felt when regulators and the private sector meet at the operational level.

While the WCO produced the SAFE Package that includes a set of documents that enable Customs to implement and update the SAFE Framework, the most referenced documents are the AEO Implementation Guidance and the AEO Compendium which is revised on an annual basis. The Package also responds to more recent needs by including the Mutual Recognition Arrangements (MRA) Guidelines and the Trade Recovery Guidelines, for future use.

Beyond providing standards and guidelines, the WCO has been providing capacity building support to its Members in establishing AEO programmes in close cooperation with donor organizations through national and regional AEO workshops. Partnerships with business are also indispensable, as evidenced by the contribution of the WCO Private Sector Consultative Group to the work of the WCO SAFE Working Group in reviewing the implementation of the SAFE Framework. In a similar vein, the WCO organizes a Knowledge Academy for Customs & Trade each summer to disseminate information on AEO and other Customs subjects.

As a result of these joint efforts, I can see a growing number of AEO programmes all over the world. As of March 2012, there are 19 functioning AEO programmes in 45 countries worldwide. All 27 EU Member States have developed their own national programmes. Here in Asia-Pacific there are 6 countries that have formally launched national programmes – China, Japan, Korea, Malaysia, New Zealand and Singapore – and others are developing their pilot projects.

I would also like to refer to the Americas and Caribbean region where Guatemala hosted a regional AEO Conference in 2010 that was attended by over 500 participants. That event boosted the interest of business in the topic, forged new partnerships, and encouraged governments to develop AEO programmes. As of today, there are 8 national programmes in the region with the Dominican Republic’s launch a few weeks ago. And I am glad to welcome 20 administrations from the region that have come to share their success stories with you. I also see similar efforts being made in Africa and the Middle East.

Now we have to consider the way forward beyond national AEO programmes. It is well established that the advantages of an AEO programme can be maximized internationally through mutual recognition, and I am pleased to see that the number of these arrangements is constantly growing. To date, 17 MRAs have been signed. In July, the EU-US MRA will become functional and join the list.

While current MRAs are essentially between developed economies, I believe that it is important to broaden them to include emerging and developing economies in order to extend the benefits of AEO programmes to the global trading community. It is with MRAs that AEO programmes can truly connect Customs administrations and the private sector around the world. As part of the WCO Customs in the 21st Century vision, we have been discussing the Globally Networked Customs concept which will facilitate the exchange of information. And it is no wonder that information on AEOs is chosen as the first Utility Block, which will greatly assist WCO Members in paving the way for mutual recognition.

In order to have a better understanding of the benefits MRAs may provide, the Korea Customs Service, in cooperation with the WCO, recently launched a research initiative on the effects of MRAs. Several countries have agreed to participate, and we are looking forward to receiving the results of the study which will eventually become part of the SAFE package.

From the side of the WCO, it is important that we see these arrangements broaden to include emerging and developing economies. These days, Customs-business partnership arrangements are tools that drive Customs administrations in both developed and developing countries.

The agenda prepared for you by the Conference organizing team is very comprehensive and diverse, encompassing not only issues related to AEO, but a wider approach to supply chain security. The format for your engagement in the discussions also offers different opportunities – apart from panel debates, tomorrow you will have the chance to choose from more than 40 workshops divided into seven tracks. Thus, I hope everyone will find something of interest.

I am convinced that the Global AEO Conference, here in Seoul, will leave a clear footprint at the global level, and will pave the way for many success stories to come and to be shared in a not-too distant future.

Thank you.