Singapore and China’s Mutual Recognition Becomes a Reality

Director-General of Singapore Customs Fong Yong Kian and Vice Minister of the General Administration of China Customs Sun Yibiao (both seated), signed the China-Singapore MRA at the WCO Council Sessions in June 2012. The signing was witnessed by Chairperson of the WCO Council and Chairman of the Revenue Commissioners of Ireland, Josephine Feehily and WCO Secretary-General   Kunio Mikuriya.

Director-General of Singapore Customs Fong Yong Kian and Vice Minister of the General Administration of China Customs Sun Yibiao (both seated), signed the China-Singapore MRA at the WCO Council Sessions in June 2012. The signing was witnessed by Chairperson of the WCO Council and Chairman of the Revenue Commissioners of Ireland, Josephine Feehily and WCO Secretary-General Kunio Mikuriya.

General Administration of Customs of Singapore has announced that the Mutual Recognition Arrangement (MRA), signed with Customs of the People’s Republic of China went into effect on March 15, 2013.  Following the effective date, both Singapore’s STP-Plus companies and China’s Class AA accredited companies will be recognized as Authorized Economic Operators (AEOs) of the respective countries.

This recognition as AEOs allows Customs from both countries to grant clearance facilitation for accredited AEOs such as lower examination rates, priority inspections, and priority handling of customs clearance documents at each country’s port.  Included in the announcement were specific instructions for how importers in both Singapore and China should fill out customs forms when receiving exported goods from one of their respective AEOs.

For goods exported directly to Singapore from a Chinese Class AA company, the Chinese exporter would need to provide the Singapore importer with the 10-digit Customs Registration Code to place on their import declarations to Singapore along with inputting the “AEO code” into the portal for mutual recognition purposes and benefits of AEO.  The AEO code is comprised of “AEO”, “CN” and the 10-digit Customs Registration Code.

For goods exported to China from a Singapore STP-Plus company, the Chinese importer must fill in the “AEO code” of the Singapore’s exporter in the “remark column” in their import declarations to receive mutual recognition benefits.  The format for the AEO code is as follows:  “AEO (written in English half-width characters and capital letters)” plus “<” plus “SG” plus “12-digit AEO code” plus “>”.  For instance, if the AEO code of one Singapore STP-Plus company is AEOSG123456789012, then the remark column filled in by the Chinese importer would read as “AEO”.

The MRA signed between China and Singapore is but one example of several security programs in different countries making it easier for trusted traders to move goods through the supply chain. Other countries that also participate in MRAs include:

  • US Customs & Trade Partnership Against Terrorism (C-TPAT) which has MRAs in place with Canada’s Partners in Protection (PIP), New Zealand’s Secure Export Scheme Program (SES), Jordan’s Golden List Program (GLP), Japan’s Authorized Economic Operator Program (AEO), Korea’s AEO, and the European Union’s ( EU) AEO
  • European Union (EU) AEO which has MRAs in place with Canada’s PIP, Japan’s AEO, Australia’s AEO, New Zealand’s SES, and US C-TPAT
  • Japan Customs has MRAs in place with New Zealand’s SES, EU’s AEO, Canada’s PIP, Korea’s AEO, and Singapore’s STP-Plus
  • Singapore Customs has signed MRAs in place with Canada’s PIP, Korea’s AEO, Japan’s AEO, and China’s Class AA

Part of participating in any security program is the ability to assess and manage risk across the supply chain.  This includes soliciting and analysing information received from every partner within the supply chain to corrective actions and best practices.  While are security programs are still voluntary in nature, companies that take advantage of them are reaping benefits such as faster customs clearance and less inspections. Source: Integration Point

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US C-TPAT member exports to receive expedited EU customs clearance

4209_image002January, 2013 saw the United States and the European Union implemented the mutual recognition arrangement for their respective supply chain security programmes. The US Customs and Border Protection (CBP) administers the Customs-Trade Partnership Against Terrorism (C-TPAT), which is now recognised as equivalent to the European Union’s Authorised Economic Operator (AEO) programme.

Should they elect to allow CBP to share certain information with the European Union, US importers authorised under C-TPAT will be considered secure and their exports will receive a lower-risk score by the customs administrations of EU member states. In practice, certification translates into time and money savings for parties dealing with trusted operators. In that sense, certified operators are successfully marketing their status as a distinguishing competitive advantage.

Both programmes are voluntary, security-based programmes aimed at improving supply chain security. As programme members, importers receive lower risk-assessment scores in customs administrations’ computer targeting software. Therefore, members are subject to fewer security-related inspections and controls. The mutual recognition arrangement between the United States and the European Union allows for members of one programme to receive reciprocal benefits when exporting to the other jurisdiction.

However, not all C-TPAT members qualify for full AEO benefits. Only Tiers 2 and 3 C-TPAT importers (considered as more secure) may receive a lower risk-assessment score, and consequently undergo fewer inspections when exporting to an EU member state. In addition, in order to receive these benefits, C-TPAT members must expressly elect for the United States to share certain information with the European Union and certify that their exports meet all applicable requirements.

The mutual recognition arrangement may also exempt members’ facilities from undergoing validation site visits by both administrations when initially being certified or during revalidation visits. This benefit is available for every tier of C-TPAT membership.

The mutual recognition arrangement applies only to C-TPAT importers which also act as exporters. A C-TPAT manufacturer will benefit from the arrangement only if it also acts as the US exporter. For example, if a US company owns a C-TPAT-certified manufacturer in Mexico that directly ships merchandise to the European Union, those shipments will not benefit from the arrangement.

CBP’s targeting system recognises AEO-certified entities by their manufacturer identification number. Certified manufacturers will receive benefits under the arrangement regardless of whether they are the EU exporter. A certified exporter which is not a manufacturer may obtain a manufacturer identification number to gain from the benefits of mutual recognition. As such, AEO-certified manufacturers and exporters may benefit under the arrangement, but only US exporters are eligible for benefits.

Although the United States and the European Union have recently announced the possibility of a US-EU free trade agreement, this arrangement is a trade facilitation measure that companies may elect to participate in immediately, regardless of the results of potential free trade agreement negotiations.

The United States also has mutual recognition arrangements for supply chain security with Canada, Japan, Jordan, Korea, New Zealand and Taiwan. Source:  Sidley Austin LLP, and The International Law Office

USCBP and EU sign C-TPAT Mutual Recognition

U.S. Customs and Border Protection (CBP) and the European Union (EU) signed today a Mutual Recognition Decision between CBP’s Customs-Trade Partnership Against Terrorism (C-TPAT) program and the EU’s Authorized Economic Operator (AEO) program.

U.S. Customs and Border Protection Acting Commissioner David V. Aguilar and European Union Taxation and Customs Union Directorate Director-General Heinz Zourek sign the Mutual Recognition Decision between CBP’s Customs-Trade Partnership Against Terrorism program and the EU’s Authorized Economic Operator Program.

CBP Acting Commissioner David V. Aguilar and Director-General Heinz Zourek, European Union Taxation and Customs Union Directorate (TAXUD) signed the decision, which recognizes compatibility between the EU and the U.S. cargo security programs.

“Today’s decision on the mutual recognition of the EU and U.S. trade partnership programmes is a win-win achievement: It will save time and money for trusted operators on both sides of the Atlantic while it will allow customs authorities to concentrate their resources on risky consignments and better facilitate legitimate trade,” said Director-General Zourek.

C-TPAT is a voluntary government-business initiative to build cooperative relationships that strengthen and improve overall international supply chain and U.S. border security. C-TPAT recognized that U.S. Customs and Border Protection can provide the highest level of cargo security only through close cooperation with the ultimate owners of the international supply chain such as importers, carriers, consolidators, licensed customs brokers, and manufacturers. Source: US CBP

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