DEVELOPMENT OF AUTHORIZED ECONOMIC OPERATOR

IN APEC

INDONESIAN

CUSTOMS

AND

EXCISE

CUSTOMS LEADERS’ PERTNERSHIP DIALOGUE

4-5 APRIL 2013, PANAMA

Contents

APEC OVERVIEW1

OUTLINE AND OBJECTIVES OF THE APEC AEO PROGRAM

2

ACHIEVEMENT OF THE AEO PROGRAM IN APEC3

FUTURE OR GOALS OF THE AEO PROGRAM IN APEC4

1

WCO SAFE Framework

of Standards

advance of globalization

Growing demands for

trade facilitation

Customs

9/11 Tragedy

Demand for Securing Global

Trade

International supply chains increasingly

sophisticated

Partnership withBusiness

Community

Source: SCCP Blueprint 2010, APEC Secretariat2

APEC Asia Pacific Economic Cooperation

• The Asia-Pacific Economic Cooperation (APEC) forum was established in 1989 to leverage on the growing interdependence of Asia-Pacific economies.

• APEC's vision (the 'Bogor Goals' 1994):

“free and open trade and investment in the Asia Pacific”

• by further reducing barriers in the region and by promoting the free flow of goods, services and capital among APEC economies.

3

APEC FIGURES

APEC has grown to become one of the world's most important regional groupings.

• 21 member economies

• more than 2.7 billion people

• 53 percent of world real GDP

• 44 percent of world trade.

• average annual GDP growth of 3.5 percent, versus 3.0 percent growth in non-APEC economies (on a purchasing power parity basis).

Source: APEC at a Glance, 2012, APEC Secretariat4

AEO support to APEC Trade Facilitation

APEC’s activities are focused on THREE KEY AREAS:

• Trade and Investment Liberalization• Business Facilitation• Economic and Technical Cooperation

• Since its inception in 1989, trade facilitation has been one of the core activities of APEC.

• Although after the 9/11 tragedy, a new dimension was added to world trade i.e. the secure and save movement of goods and people across borders, APEC noted that legitimate international trade must continue to be facilitated.

5

AEO in APEC Trade Facilitation

TRADE FACILITATION ACTION PLAN II (TFAP II)

• Menu of actions and measures: CUSTOMS PROCEDURES

- One of the Action Plans is Implement APEC framework based on the WCO Framework of Standards

• Revised Key Performance Indicator (KPI)

Area: Implement APEC Framework based on the WCO Framework of Standards

KPI: -- Number of Authorized Economic Operators

-- Percentage of Trade Covered by Authorized Economic Operator

2001

2002

2007

2010

Shanghai Accord

TFAP I

TFAP II

5% Reduction in trade transaction cost By 2006

Further 5% Reduction in trade transaction cost By 2010

6

THE DEVELOPMENT OF AEO PROGRAM BY APEC SCCP

Year

2005 APEC SCCP added to their work plan the “Implementation of an APEC Framework for Secure Trade based on the WCO SAFE FoS

In order to Facilitate trade by making security requirements less burdensome to businesses and the international trade community.

2007-2008 SCCP held three Seminars:

• “Essential Legal Authorities,” • “Establishment of Industry Partnership Programs,” • “Supply Chain Specialist Training,”

2009 SCCP held two other Seminars:

• “Targeting and Risk Management,” and• “Border Enforcement Training,”

7

2009 a. SCCP established AEO Working Group, LED BY Japan and the US

Objectives:~ to assist APEC economies in establishing AEO

Programmes and in harmonizing them with each others

~ Encourage MRA arrangement among interested economies

b. SCCP Endorsed The Terms of Reference

2010 a. AEO working Group produced ‘AEO Program Compendium’

b. Survey on the need of capacity building

c. APEC Customs DG and Commissioners Meeting agreed to adopt AEO as one of the 8 Priorities to be Promoted among the APEC Customs Administrations

8

APEC CUSTOMS DG / COMMISSIONERS MEETING14 September 2010

Support of the development of AEO programmes / promotion of Mutual Recognition Arrangements and Trade Recovery Efforts

1. Recognizing the importance of realizing trade facilitation and trade security at a high level, we support the establishment of an AEO programme in each economy, as advocated by the World Customs Organization (WCO), and will promote mutual recognition arrangements (MRA) of the AEO programmesbetween interested economies, about which the business sector has strong expectations.

2. Commending the completion of the AEO Compendium developed by the SCCP based on the AEO Action Plan, we will pursue the steady implementation of the AEO Action Plan including the development of the AEO Best Practice with a view to promoting the establishment of an AEO programme in each APEC economy.

3. Recognizing the importance of APEC Trade Recovery Program to facilitate trade while ensuring trade security, we ask SCCP members to continue developing communication networks to facilitate the resumption of trade in the event of a major disruption to the global supply chain.

9

AEO and MRA Programmein APEC

AEO

Operational AEO Programs

AEOs to be Launched

Compliance Program

New Zealand Chile Indonesia

Japan Thailand

Canada

China

Korea

Singapore

USA

Malaysia

Mexico

Hong Kong,China

Peru

Chinese Taipei

Source: 2012 WCO AEO Compendium

AEO Programs in

Place

Piloting AEO

MRA

New Zealand Mexico Canada,Japan,Korea,Singapore,USA

Japan

Canada

China

Korea

Singapore

USA

ChineseTaipei

2010 2013

Source: Trade Facilitation through Customs Procedures: Assessment of APEC’s Progress, APEC PSU, October 2011

10

MRA

Concluded MRAs (19)

MRA Being Negotiated

Number of MRA’s per Country

Date Country Country SignedIn

Nego-tiation

June 2007 NZ-USA China-Japan Canada 4 0

May 2008 Japan-NZ Japan-Malaysia China 1 3

June 2008 Canada-USA China-Korea Hong Kong, China 0 1

June 2009 Japan-USA Hong Kong China-Korea Japan 6 2

June 2010 Canada-Japan NZ-Singapore Korea 5 4

June 2010 Canada-Korea Singapore-USA Malaysia 0 1

June 2010 Canada-Singapore New Zealand 3 1

June 2010 Korea-Singapore Singapore 4 2

June 2010 Korea-USA USA 6 1

May 2011 Japan-Korea

June 2011 Korea-NZ

June 2011 Japan-Singapore

June 2012 China-Singapore

Source: APEC Capacity Building Workshop on AEO, Bangkok, February 2013

11

AEO KPI Assessment ResultSource: Trade Facilitation through Customs Procedures: Assessment of APEC’s Progress, APEC Policy Support Unit, October 2011

No Key Performance Indicator

Assessment Result (2010)

1. Number of Authorized Economic Operators

AEO in APEC region increased from 8,322 (2007) to 10,502 (2009)= 26% increase in AEO numbers over these three years

2. Percentage of Trade Covered by Authorized Economic Operator

Seven economies had provided data of number of AEOs and trade covered by AEO from 2007 to 2009.Rough approximation: the expansion of AEO programmes in APEC has increased the share of merchandise trade handled by authorized business by over 6% per year

12

2013 APEC SCCP Work Program on AEO

No. WORKSHOP DATE VENUE ORGANIZER

1. Regional Capacaity Building Workshop on AEO

27-28 Februari2013

Bangkok, Thailand

APEC Technical Assistance and Training Facilities (ATFT), sponsored by USAID, and Thai Customs

2. Second Regional Capacaity Building Workshop on AEO

April 2013 Chile

Aims to:to promote the concept of AEO as a best practice throughout the region, and provide an opportunity for APEC economies that have yet to implement an AEO program to identify key areas for implementation and/or improvement.

13

Regional Capacity Building Workshop on AEO, Bangkok, 27-28 January 2013

AGENDA:

• Update the current status of AEO implementation and development in APEC Member Economies

• Overview of AEO and MRA (Nathan Associates Inc)• Cooperation with Other Agencies on AEO (WCO)• The Practices of AEO Program in Japan and WCO ToolsSafe and

Secure (Japan)• New Zealand Trade. The Secure Export Scheme (New Zealand)• AEO Program Discussion: AEO Program Highlights (Canada)• Communication and Standards (US)• MRA Implementation (Korea)• Country Program Update: MRA Effects (WCO)• Experiences Implementing MRA: Panel Discussion• group discussion

14

FURTHER GOALS

• Increase the number of APEC Economies which implement AEO

• Increase the number of MRA in the region

• Develop concrete strategic objectives for the Asia-Pacific region with regard to AEO program development, implementation, and maintenance, including goals for fostering AEO and Mutual Recognition and efficient uses of capacity building and other technical assistance to ensure sustainability;

15

THANK YOUT e r i m a k a s i h

syarif@kbritokyo.jp