Can you explain to me what the European Union’s Authorized Equipment Operator program is and why as a U.S. company, I should care about it?
Basically, the Authorized Equipment Operator (AEO) program is the EU version of our Customs Trade Partnership Against Terrorism program (C-TPAT). I discussed the C-TPAT program in more detail in an earlier Q & A Column.
Like the C-TPAT program, under the AEO, companies agree to ensure that their supply chains are secure from possible tampering by terrorists. The premise behind these programs is that by participating in these programs and having a secure supply chain, companies will in turn receive certain benefits from the government with regards to faster release times and enrollment in certain Customs programs.
The U.S. and EU recently signed a Memorandum of Recognition Decision that will affect U.S. companies in two phases.
Phase I, which should begin in the end of July, will result in the C-TPAT program recognizing and accepting information from EU companies who are AEO members. This is important for two reasons.
First, for U.S. companies who may be scheduled for a C-TPAT validation (which can involve site visits to foreign suppliers), if there are AEO members in the company’s supply chain, then U.S. Customs may chose not to bother visiting them and will just accept them as part of the validation. Thus, at some point it would be important for the C-TPAT member company to advise their C-TPAT representative or indicate in the portal if a supplier is an AEO member.
Second, for U.S. companies who are C-TPAT members, currently their import transactions are scored at a lower risk then transactions for non C-TPAT members. For this reason, C-TPAT members should have fewer security related inspections. However, now with the Mutual Recognition, Customs has established a program in which AEO members can file their Manufacturer Identification Number information and AEO status in the C-TPAT Portal. The MID number is referenced on each U.S. Customs entry and it used by Customs to identify the manufacturer/supplier of the products in an entry. Thus, once the AEO member files its information in the C-TPAT portal, if an entry is filed for a C-TPAT member with the MID information for the AEO member, the shipment in question should receive even a lower risk score which should again decrease security related inspections. U.S. Customs has provided detailed information on the program to EU member countries who have shared it with its AEO members. If you are a C-TPAT company purchasing from and AEO member, you should work with them to ensure that the right information is provided.
Phase II, scheduled to begin in January 2013, will require the EU to recognize C-TPAT companies who are exporting products to an AEO member company within the EU. Thus, they are to establish a program similar to the one just started in the U.S. to benefit both the C-TPAT member and the AEO importer in the EU.
The purpose behind both of these programs is to ensure worldwide that companies consider security issues as a vital element of their supply chain and take steps that will prevent terrorist attacks occurring within international trade.
The TradeLaw Q&A column addresses your questions concerning the import and export regulations of the United States. Paula Connelly is principal in the Law Offices of Paula M. Connelly and has over 25 years of experience in Customs law and related import and export matters. She works with businesses of all sizes providing advice on all aspects of international trade law. She can be reached at paula@connellycustomslaw.com or 781-897-1771.
Disclaimer – Material presented in this column is intended for information purposes only. It is not intended as legal advice and should not be construed as such.
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