The document discusses international trade supply chain security initiatives initiated post-9/11, focusing on the framework for securing trade that includes AEO certification to enhance security and facilitate custom processes. It highlights the objectives of the European Union's customs security program and the benefits of AEO certification for businesses, emphasizing its role in combating terrorism and streamlining trade. Key debate topics include the implications of AEO certification for various stakeholders within the supply chain and the need for global consistency in its application.

1. Confidential
ECR Debating Panel
Supply Chain Security:
The Challenges Ahead
Ian Craig: Ernst & Young
Antonio Bianchi: Colgate-Palmolive
Europe

2. Introduction
• International trade supply chain security initiatives, driven
by the revenue authorities began in the USA
• These initiatives were a response to 9/11 and the
subsequent demand for increased border security
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3. Securing Trade Globally
World Customs Organisation
Framework of Standards to secure and facilitate global
trade – put forward proposals to improve global trade
security and encourage customs jurisdictions to develop
security programmes
149 countries signed the framework document which
introduced the concept of Authorised Economic Operator
(AEO) certification which has subsequently been
developed by the European Commission
Creating a ‘green lane’ of secure trade partners
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4. Securing Trade Globally
Green Lanes
Canada
“FAST” EU
CSP
USA
C-TPAT CHINA
Jordan EU – China Pilot
“Golden List”
“FRONTLINE”
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5. Objectives and Principles of the
SAFE Framework
• Establish standards that provide supply chain security and
facilitate certainty and predictability at global level
• Enhance the role, functions and capabilities of Customs to
become more supply chain security focused in addition to
traditional revenue protection role.
• Strengthen co-operation between Customs
administrations to improve their capability to detect high-
risk consignments.
• Promote the seamless movement of goods through
secure international trade supply chains (“Green Lanes”).
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6. International Action on the
Framework of Standards
• A number of supply chain security programmes both
customs and commercially driven are being implemented
based on the framework of standards.
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7. International Security
Initiatives
Governance
Container scan
24h rule ‘Trusted’
information
Transaction
information
Logistics Smart Box
ISPS
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8. Significant Changes in the European Union
Impacting International Trade
Lisbon
Strategy
WCO European
Framework Commission
Excise New
Customs
Movement of Modernised SAD New Export Computerised
Security
Control Code Harmonisation System Transit
Programme
System System
Common Pre-Arrival and Authorised
Risk pre-departure Economic
Assessment EDI messages Operator
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9. European Union: Customs
Security Programme
Aims:
• “Increase international trade supply chain security to
combat threat of terrorism and to further facilitate
businesses who are trusted supply chain partners”.
Authorised Economic Operator (AEO)
Certification
What is AEO?
• Internationally recognised quality mark that identifies safe
and secure supply chain partners
• Part of the wider EU Customs Security Programme (CSP)
to fight global terrorism
• Voluntary government to business initiative.
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10. AEO Certification
What is an ‘Economic Operator’?
“….A person who, in the course of its business, is involved
in activities covered by customs legislation.”
Warehouse Customs
Manufacturer Exporter Forwarder Carrier Importer
Keeper Agent
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11. AEO Certification Criteria
"The criteria for granting the status of authorised economic
operator shall include:
• an appropriate record of compliance with customs
requirements
• a satisfactory system of managing commercial and, where
appropriate, transport records, which allows appropriate
customs controls
• where appropriate, proven financial solvency and
• where applicable, appropriate security and safety
standards."
Authorised economic operators
Guidelines on standards and criteria
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12. AEO Certification Criteria
Multi-Function Responsibilities
Production / Quality
Manufacturing 4%
3%
Criteria for
Finance Supply
11% Chain assessment by
38%
the customs
I.T.
authorities
12%
covers a wide
Tax (all
range of
other)
4%
business
activities
Facilities
6%
Human
Customs
Resources
13%
9%
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13. AEO Certification - Benefits
•
• Fewer physical and document-based controls
•
• Lower customs risk score leading to priority treatments of
consignments if selected for control
•
• Improved internal control procedures
•
• Evaluation of Security and Safety standards on a regular
basis
•
• Recognised as a safe and secure trade partner by both the
authorities and business community
•
• Easier admittance to customs simplifications
•
• Development of an overall EU trade strategy
•
• Improved relationship with EU Customs authorities
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14. Commercial Considerations
AEO certification will provide a competitive advantage to
participating companies for the following reasons:
• AEO certified traders will benefit from simplifications in customs
procedures and/or from facilitation with regard to customs controls
relating to safety and security;
• The AEO concept should ensure a safer and more secure end-to-end
supply chain [Trusted Supply Chain Partners];
• Being recognised as an AEO will constitute added value for the
operator, as it demonstrates compliance with solid security criteria and
controls.
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15. Key Debate Topics
• Benefits of AEO, implications of being a non-AEO
• Features of an AEO project:
• Challenges and Experiences
• Timescales
• Resources
• Costs
• Functional involvement
• Global significance, mutual recognition, Green Lane concept
• Consistent application of AEO regulation throughout EU Member
State customs authorities
• Significance of AEO for various members of supply chain eg,
shippers.
• The commercial pressures (given & received) to become AEO
certified
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16. Further Information & Assistance
For further information or assistance in relation to AEO certification
for your business or in relation to this debate please contact:
Antonio Bianchi
Colgate-Palmolive Europe SARL
Tel: +41 (0)22 722 0747
E-mail: antonio_bianchi@colpal.com
Ian Craig
Ernst & Young LLP
Tel: +44 (0)20 7951 8133
E-mail: icraig@uk.ey.com
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