Why Authorized Economic Operator (AEO) Is Increasingly Important to Enterprises in China

Blog originally posted on 28/09/2022 07:00 AM

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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.


AEO Helps Enterprises Take Full Advantage of RCEP's Benefit

In addition to the preferential measures applicable to all enterprises, AEO enterprises can also enjoy at least three of the following benefits:

  • Reduce documentation and data requirements where applicable
  • Reduce the proportion of (on-site) inspection where applicable
  • Speed up clearance release where applicable
  • Postpone the payment of customs duties, domestic taxes, fees, and expenses
  • Use comprehensive guarantee or reduce guarantee
  • Centralize customs declaration for all imports or exports within a specified period
  • Complete clearance at AEO enterprises’ workplace or another place approved by Customs

AEO Helps Enterprises Become a “Certified Exporter”

A Certified Exporter refers to an enterprise that can issue a Declaration of Origin for its exported or produced goods, which meet the origin qualification under a relevant preferential trade agreement, such as RCEP. AEO is one of the prerequisites for becoming a Certified Exporter.

The Declaration of Origin can help enterprises confer originating goods more conveniently, without the administrative burdens of managing shipment-by-shipment government-issued certificates of origin.


AEO Helps Enterprises Benefit From 40+ China Government Departments

More than 40 government departments have all offered corresponding preferential and facilitative treatment to both domestic and overseas recognized AEO enterprises, such as:

  • National Development and Reform Commission… offers certain incentives to AEO enterprises in the allocation of import and export quotas for grain, cotton, and other products with consideration of the applicant's credit status and the degree of difficulty in obtaining quotas or the number of quotas
  • Ministry of Commerce offer priority and reduce lead time for AEO enterprises in the approval of Production Capacity, domestic sales of bonded goods and End-user and End-use Statement, etc.
  • Ministry of Finance... implement tax rebate at the port of departure to certain enterprises that meet certain requirements and have AEO qualification

If you want to know more about AEO benefits or how to become an AEO enterprise, please do not hesitate to contact us.

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Topics: Asia, AEO

Blog originally posted on 28/09/2022 07:00 AM

Zaniel Zhang – Manager, Trade Advisory Services, Shanghai

Written by Zaniel Zhang – Manager, Trade Advisory Services, Shanghai

Zaniel has over ten years of rich experience managing China customs and trade compliance matters. Zaniel spent almost four years with GE leading trade digitization projects. With his great efforts, more than 90% of transactions across GE businesses in China are automated. Before joining GE, Zaniel worked for over four years in BASF for daily operations in a wide range of China Customs and trade matters, including processing trade, customs valuation, Free Trade Agreements, and HS classification. He has an MBA from Shanghai Jiao Tong University and is a graduate of Donghua University of Materials Science and Engineering. He is also a fluent English speaker.