On January 1, 2022, the Regional Comprehensive Economic Partnership (RCEP) came into force. RCEP members have a total population of 2.27 billion, a Gross Domestic Product (GDP) of 26 trillion US dollars, and a total export value of 5.2 trillion US dollars, accounting for about 30% of the global economy. After RCEP takes effect, more than 90% of the trade in goods among RCEP members will finally achieve 0% tariff.
Objective of the AEO Program
Apart from revenue collection, Trade Security and Trade Facilitation are important areas for customs agencies around the world. In order to secure and facilitate the trade, the World Customs Organisation (WCO) has adopted the SAFE framework of standards in 2005, which includes the Authorized Economic Operator Program (AEO Program) as one of three key pillars. India, as a member of the WCO, has adopted the AEO Program through the Customs Act, 1962.
The presentation of the government’s budget before Parliament has always been an interesting affair. The perfunctory annual photo of the Chancellor of the Exchequer standing in front of Number 11 Downing Street with the red briefcase containing the Government’s budget for the year always seems to make a dull affair more interesting.
It’s hard to believe that the Authorised Economic Operator (AEO) program has been available to EU traders for 10 years. The program was originally introduced in January 2008, after six years of planning and development.
So, what else has happened in the last 10 years?
Korea is introducing a new Importer Self-Assessment (ISA) program allowing companies the opportunity to file an annual ISA report in lieu of undergoing a Customs Assessment. It also provides the extra benefit of allowing VAT recovery on additional duties payable, which is an obstacle under the current system.
The reality of the ISA program is that it is practically impossible for customs to verify the legality of all import declarations due to the limited manpower of the auditors. Given this circumstance, customs audits were primarily focused on the collection of additional duties. This increased the number of objections and appeals filed against Customs, proving to be a burden for both businesses and tax collection.
