Eleven Latin American and Caribbean countries are working together to establish an Authorised Economic Operator (AEO) Regional Recognition Arrangement (RRA). The arrangement between Argentina, Bolivia, Brazil, Colombia, Costa Rica, Chile, Dominican Republic, Guatemala, Paraguay, Peru, and Uruguay has the potential to boost intra-regional trade by making it simpler, faster and more cost-effective for AEO companies to trade across the region. If it is to be successful, however, it must be designed and implemented by both governments and business working together.
What is an AEO Regional Recognition Arrangement?
Under AEO programmes, which already exist in all eleven countries, companies who comply with the supply chain security standards in the World Customs Organization’s SAFE Framework of Standards, are awarded ‘Authorised Economic Operator’ status by customs. These companies benefit from reduced inspections on goods and quicker clearance times at borders. For example, in Brazil, export and import clearance for AEO companies is on average 65% and 81% faster than those of non-AEO companies. Such programmes also allow customs to focus inspections on unknown high-risk cargo, making their operations more efficient and strengthening security. Regional Recognition Arrangements are established between countries so that the AEO status awarded in one country is recognised by all the signatory countries of the RRA, and therefore the AEO company can benefit from favourable treatment while trading in each country involved.
What we are doing?
Our project is supporting the RRA negotiations and joint site validations that are essential for the signing of the regional arrangement.
We are also bringing in the voice of business to ensure that the agreement delivers real benefits for traders and governments. We are surveying AEO companies to gather their experiences of AEO programmes, ideas for improvements and views on best practices.
Once the arrangement is signed, the Alliance will support the design and development of an IT platform for the participating countries to efficiently manage and exchange AEO data.
This is vital to ensure the benefits of being an AEO company are realised in practice.
The agreement will mean AEO companies are able to trade throughout the region with fewer physical and documentary inspections of their goods, faster border clearance times, and ultimately reduced costs.
Meanwhile customs agencies will be able to increase their administrative efficiency by allocating their human and technical resources to high-risk shipments. Underpinning all these benefits will be a trusted and constructive working relationship between the government and business.
Measurement and evaluation
Despite the growing number of mutual recognition agreements and RRAs, there is a lack of understanding of their impact on business and customs administrations. This is why, once the arrangement is in place, we will measure how effective it is in delivering benefits to both the public and private sectors and capture lessons so we can promote the AEO concept as best practice globally.
How can business get involved?
We are looking for businesses to get involved in a wide range of activities, including:
- participating in private sector surveys and consultations;
- helping to develop resources and tools on obtaining the AEO certification;
- supporting the development of an IT platform to facilitate the exchange of AEO related data; and
- sharing their experience as AEO companies to help us measure impact.
The project will be delivered over 33 months in three overlapping phases:
Supporting the negotiations
Implementing the RRA