Economic Operator

 

Customs Directorate/Authorized Economic Operator

 
About the Program

​The Authorized Economic Operator program is a voluntary program for global supply chain security and trade facilitation. The program is based on the  SAFE Framework of Standards of the  World Customs Organization  adopted by Israel Customs Directorate in 2005. As part of the program, unified standards for the security, compliance and financial viability of the global supply chain were introduced. The program is operated by the customs and it is based on voluntary participation. That is, companies that are willing to adopt the framework of standards, contribute to the security of the supply chain and trade facilitation. These companies will benefit the facilitation in Israel's foreign trade and in other countries that Israel will sign a mutual agreement with.

 

The Goals of Authorized Economic Operator Program:

 

1.To establish unified standards that enhance the supply chain security and facilitation at a 
   global  global  level in order to promote certainty and predictabilitylevel in order to promote 
   certainty certainty  and predictabilitycertainty certainty  and predictability


2.To enable integrated supply chain management for all modes of transport.


3.To enhance the role, functions and capabilities of Customs in order to meet the challenges 
    and  opportunities of the 21st Century


4.To strengthen cooperation between Customs administrations and to improve their capabilities.


5.To detect high-risk consignments and promote the seamless movement of goods through 
   secure international trade supply chains.


6.To strengthen the Customs-Business cooperation.


The program is open for all participants of supply chain (manufacturer, warehouse, retailer, distributer, broker, importer, port operator, and others).

 
What is an Authorized Economic Operator?

​Authorized Economic Operator is a party involved in the international movement of goods in whatever function that has been approved by or on behalf of a national Customs administration as complying with WCO or equivalent supply chain security standards. Authorized Economic Operators include, inter alia, manufacturers, importers, exporters, brokers, carriers, consolidators, intermediaries, ports, airports, terminal operators, integrated operators, warehouses and distributors.
 As a result, Customs authority grants benefits to the operators in program during international trade.

 

Program Principles


•Customs-Customs network agreements


•Customs-Business partnership

 
Mutual Recognition Agreements
An important component in supply chain security programs is the mutual recognition based on unified criteria. Customs administrations that sign mutual recognition agreements acknowledge each other's approvals in various programs what reduces the need for security and customs examinations. This will facilitate global trade. 
Optimal benefits from the various programs would be achieved by creating a widespread global network of mutual recognition agreements between customs administrations.
Benefits.
 
Authorized economic operators who meet the various standards and implement required security measures would enjoy better efficiency of their supply chain management, reduced theft and, according to some researches, even increase the net profit. In addition, customs will grant the approved operators the following benefits:
    •Reduced probability for examinations

    •Easier examinations (import/export)

    •Pre-clearance (documents examination before arrival of goods)

    •Paperless procedures

    •A.E.O point of contact
 
Benefits to come -
 
    •Authorized exporter will be granted with benefits at the destination country by local customs 
     (after signing mutual recognition agreement)

    •The possibility to conduct the examination at the Operator's premises will be considered
   
    •Priority in treatment during recovery from crisis•Priority in treatment during recovery from 
      crisis

 

Mutual Recognition Agreement with Taiwan

 
Certification Procedure
1. An operator applying to the program should fill in anapplication form, attach the required 
   documents and send all the information to customs/AEO.

2. The applying operator will be examined by customs for different criteria, such as: 
     a. Compliance with tax and foreign trade laws
     b. Financial viability
     c. Satisfactory system for management of commercial records
     d. Crisis/Disaster recovery documented procedures 
 
 
3. If the applicant meets the requirements of section 2, the request will be forwarded to the 
    security department for a security evaluation: security department for a security evaluation: 

    a. The applicant will fill out a security questionnaire (access to the on-line form is with a 
        smart card and a password)
    b. After filling out the security questionnaire, an on-site inspection will be coordinated by    
        customs representatives. customs representatives.
4. A decision (either approval or rejection) will be notified by customs up to 60 days from 
    inspection:
 
    a. An approval notification for the program will be sent by customs administration to the 
        authorized economic operator.
    b. The validity of certification is for one year, in which inspections are possible by customs.
    c. By the end of this year, a re-examination will be carried out by customs. The decision of 
        prolonging the certification or halting it will be notified to the A.E.O.
    d. Customs administration has the right to suspend an operator from the program, when 
        an operator fails to observe the requirements.