Those of us who work in the world of international trade know that we operate in a highly competitive market where the slightest gain in the time it takes to design, manufacture, or ship goods can be key to getting a buyer to choose our product.
Published by ConnectAmericas
For many companies, both exporters and importers, moving goods from their point of origin to their destination market has always been, and may well continue to be, the most unpredictable link in the logistics chain. When our goods leave the warehouse they are no longer under our control and we have no choice but to trust in the logistics providers and government officials who determine whether or not our shipments comply with current legislation.
However, several years ago, customs authorities implemented a certification process that gives companies a competitive advantage, makes the transportation of goods safer, and reduces shipping times. This system, which is known internationally as the authorized economic operator (AEO) program, creates partnerships between customs authorities and the private sector, through which those companies that voluntarily join the program and comply with a series of requirements receive priority treatment and enjoy streamlined processes when importing and exporting goods.
The requirements for obtaining and maintaining AEO certification are fundamentally related to the implementation of physical and IT safety and security measures and improving the traceability of goods, accounting checks, and financial solvency, among other factors. Once a company has met all the requirements it becomes a strategic partner to the customs agency and enjoys a series of financial and operational benefits, such as tax discounts, less physical inspections, and priority dispatches.
Large-scale importer firms in more developed markets are starting to insist that their customers are AEO-certified as they perceive this to be a standard that sets companies apart. It reflects their level of professionalization and also guarantees better compliance with shipment schedules.
A New Way of Working with Customs
However, obtaining AEO certification goes beyond just complying with a series of requisites and conditions. Obtaining and maintaining certification status implies a commitment at the highest level within companies, which need to work alongside customs authorities in a context of mutual respect. Companies need to open their doors to government officials and inform them of any incident they become aware of. AEO certification thus implies changing the way that firms approach working with customs authorities and seeing them as an ally in the logistics chain rather than as an obstacle.
Authorized Economic Operators Throughout the World
More than 50 companies have AEO programs, including the members of the European Union, the USA, Canada, Japan, China, and Korea. Countries with official AEO programs can recognize the status of a company holding a certificate of reliability issued by other countries with an AEO programs through a mutual recognition process. This is one way that certified companies an access additional benefits in other countries through the program.
Nine countries in Latin America now have AEO certification: Argentina, Colombia, Costa Rica (where the system is known as PROFAC), the Dominican Republic, Guatemala, Mexico (NEEC), Panama, Peru, and Uruguay.
If your company is based on one of these nine countries and you would like to find out more about the certification process, don’t hesitate to get in touch with your local customs authority to find out more about the requirements and benefits of the program.