Authorised Economic Operators Programme

• 12 Jun 2024

Source: ET

Why in News?

Recently, the gem and jewellery sector has been granted Authorised Economic Operator (AEO) status by the Ministry of Finance, easing export-import processes with shorter cargo release times and reduced bank guarantees.

What is the Authorised Economic Operators Programme?

• The Authorised Economic Operator (AEO) programme is a global initiative launched in 2007 under the World Customs Organization's (WCO) SAFE Framework of Standards. It serves a dual purpose
  • Enhancing International Supply Chain Security: The AEO programme aims to strengthen security measures throughout the international movement of goods, minimising risks associated with smuggling and counterfeiting.
  • Facilitating Trade Flow: By recognising businesses that meet stringent security standards, the programme aims to expedite customs clearance processes, reducing delays and costs for legitimate traders.
• Under this, an entity engaged in international trade is approved by WCO as compliant with supply chain security standards and granted AEO status.
• An entity with an AEO status is considered a ‘secure’ trader and a reliable trading partner.
• Benefits of AEO status include expedited clearance times, fewer examinations, and improved security and communication between supply chain partners.
• AEO is a voluntary programme.
• India has also launched pilot project in 2011, the Indian AEO Programme that leverages the security standards established by the WCO SAFE Framework.
  • This program offers a three-tiered system for both exporters and importers, allowing companies to progressively demonstrate their commitment to secure trade practices.

World Customs Organisation

• The World Customs Organization (WCO), established in 1952 as the Customs Co-operation Council (CCC) is an independent intergovernmental body whose mission is to enhance the effectiveness and efficiency of customs administrations.
• At present, it represents 183 customs administrations across the globe that collectively process approximately 98% of world trade.
• India became the vice-chair (regional head) of the Asia Pacific region of the WCO for a period of two years 2018- 2020.
• It is the only international organization with competence in customs matters and which can rightly call itself the voice of the international Customs community.
• It has its headquarters in Brussels, Belgium.

SAFE Framework

• In June 2005 the WCO Council adopted the Framework of Standards to Secure and Facilitate Global Trade (SAFE Framework) that would act as a deterrent to international terrorism, to secure revenue collections and to promote trade facilitation worldwide.
• The SAFE Framework has emerged as the global customs community’s concerted response to threats to supply chain security, equally supporting facilitation of legitimate and secure businesses.
• It prescribes baseline standards for trade facilitation that have been tested and are working well around the globe.

UPSC Civil Services Examination, Previous Year Questions (PYQs)

Prelims:

Q1. In the context of which of the following do you sometimes find the terms ‘amber box, blue box and green box’ in the news? (2016)

(a) WTO affairs

(b) SAARC affairs

(c) UNFCCC affairs

(d) India-EU negotiations on FTA

Ans: (a)

Q2. Consider the following statements: (2017)

1. India has ratified the Trade Facilitation Agreement (TFA) of WTO.
2. TFA is a part of WTO’s Bali Ministerial Package of 2013.
3. TFA came into force in January 2016.

Which of the statements given above is/are correct?

(a) 1 and 2 only

(b) 1 and 3 only

(c) 2 and 3 only

(d) 1, 2 and 3

Ans: (a)