Founding Background

As a member of the WCO, China is actively preparing to promote the implementation of the Standard Framework.

On September 19, 2006 , China and the European Union signed the "Joint Consensus on Safe and Smart Trade Routes", and the Chinese and European customs will conduct trade security pilot cooperation on sea container transportation and try to establish a "three-way interaction" mechanism.

On April 1, 2008 , the "Regulations of the People's Republic of China on the Classification and Administration of Customs Enterprises" came into effect, transforming the "Authorized Economic Operator" ( AEO ) system into a domestic system for the first time. The entity requirements, trade facilitation measures and certification procedures of the "Authorized Economic Operator" ( AEO ) system were incorporated into it, the content and requirements of trade security and verification audits were clarified, and the enterprise management system of five customs classifications of AA , A , B , C , and D was established, realizing the transformation of the supervision idea from enterprise to goods with enterprises as the unit.

On December 1, 2014 , the Provisional Measures for Customs Enterprise Credit Management was implemented, which for the first time clearly defined the certified enterprises as China's AEOs , and at the same time, the original AA- class enterprises were transferred to advanced certified enterprises, and A- class enterprises were transferred to general certified enterprises. According to the work plan of the General Administration of Customs, the re-certification of the China Customs AEO certification standards will be gradually completed.

On May 1, 2018 , the "Customs Enterprise Credit Management Measures" was implemented, which made major adjustments to the "Interim Measures for Customs Enterprise Credit Management" promulgated in 2014, mainly reflected in four aspects: 1. The enterprise credit recognition standards are more comprehensive, scientific and objective, in line with the actual situation of the enterprise; 2. The incentives for keeping trust and the penalties for breaking trust have been increased; 3. The national credit management requirements have been implemented, and the implementation of joint incentives and joint penalties has been promoted; 4. The content of international mutual recognition and cooperation of AEO certification has been further improved .

AEO Enterprise Credit Rating

• Advanced Certified Enterprise ( ACE ): formerly Class AA
• General Certified Enterprise ( GCE ): Former Class A
•General credit enterprise = Category B
• Dishonest Enterprises
The first two are both AEO certified enterprises

AEO mutual recognition countries

At present, China Customs has carried out five AEO mutual recognitions with 32 countries and regions including Singapore, South Korea, Hong Kong, the European Union ( 28 member states) and Switzerland , and is stepping up AEO mutual recognition consultations with customs of major trading countries and regions such as the United States, ASEAN, India and Japan. After mutual recognition is achieved, AEO advanced certified enterprises will enjoy the highest customs clearance convenience in all countries and regions that have signed mutual recognition agreements with China, thereby enhancing global competitiveness.

How to authenticate

• Requirements for AEO enterprises, including internal control, financial status, compliance with laws and regulations, trade security and additional standards. Customs will conduct scoring and statistics on each of the above parts.

• The basic score for certification is 100 points, 0 points for meeting the standard, -1 points for partially meeting the standard, and -2 points for not meeting the standard. The total score of the standard must be above 95 points to meet the customs advanced certification enterprise standard.

•Since the scope of application of AEO also involves industry and commerce, commerce, taxation, foreign exchange, public security, inspection and quarantine and other departments, the customs’ focus when reviewing and judging AEO is not limited to the import and export business of the enterprise.

•Therefore, AEO certification requires overall cooperation and coordination among various departments within the enterprise.

About the passing conditions for certification

Enterprises must meet the following two conditions at the same time and be recognized by the customs to pass the certification:

First, all scoring items are not substandard ( -2 points); second, the total score of the certification standard is above 95 points (including this number). The total score of the certification standard = 100 + (the sum of the scores of all scoring items), and the scoring rules of the certification standard are as follows:

There are two scoring options for the basic standard: one is "meet the standard" and "do not meet the standard", with corresponding scores of " 0 " and " -2 "; the other is "meet the standard", "partially meet the standard" and "do not meet the standard", with corresponding scores of " 0 ", " -1 " and " -2 ". Meet the standard means that the actual situation of the enterprise meets the standard. If there are sub-standards in the standard (indicated by "( 1 )", "( 2 )", "( 3 )", etc.), the enterprise should also meet each sub-standard; partially meet the standard means that the actual situation of the enterprise basically meets the standard. If there are sub-standards in the standard (indicated by "( 1 )", "( 2 )", "( 3 )", etc.), the enterprise should also basically meet each sub-standard; do not meet the standard means that the actual situation of the enterprise does not meet the standard. If the relevant standard item is not applicable to the enterprise of the business category, the customs will no longer certify the standard.

Convenient measures for AEO general certified enterprises

1. Lower inspection rate for import and export goods;

2. Priority inspection rights;

3. Simplify document review;

4. Priority clearance for import and export goods;

5. Priority clearance will be given in extraordinary times.

Benefits of Customs Advanced Certification Enterprises

1. Go through the inspection and release procedures before determining the commodity classification, customs valuation, origin of import and export goods or completing other customs procedures;

2. Customs will set up coordinators for enterprises to coordinate and solve problems encountered by enterprises during customs clearance;

3. For enterprises engaged in processing trade, there is no real silver deposit account system;

4. Customs clearance facilitation measures provided by the customs of AEO mutual recognition countries or regions.

References