The World Customs Organization (WCO) had long discussed the security of international logistics flow, i.e. supply chain security, from producers to ultimate consumers. The fateful September 11 terrorist attacks on the USA, led the implementation of a new logistics security system and regulations for trade security. This intense focus on security at the initial stage began to work as a non-tariff barrier causing lead time delays.
In June 2005 the WCO Council adopted the SAFE Framework of Standards to Secure and Facilitate Global Trade (SAFE Framework) that would act as a deterrent to international terrorism, secure revenue collections and promote trade facilitation worldwide. The core concept of this international framework is the Authorized Economic Operator (AEO) program.
Customs authorities certify companies as AEOs in accordance with the authorization criteria and perform risk management for AEOs differently from the way they do for non-AEOs. As a result, customs will trust the operator and perform less or no inspections on goods imported or exported by or via the AEO. This facilitates the quicker movement of goods and lower transport costs. Customs benefits as scarce inspection capacity can be targeted better at high-risk cargo.
Among the World Customs Organization (WCO) members, over 170 countries have submitted letters of intent to implement the AEO system. This system is currently in operation in major advanced countries and regions such as the USA, Japan and the EU, and a growing number of countries are adopting it.