Making efforts to officially deploy the Mutual Recognition Agreement on AEO in ASEAN

Within the framework of the 33rd ASEAN Directors General of Customs Meeting (ADGCM) taking place from June 4 to 6, 2024, in the island city of Phu Quoc, the northern province of Kien Giang, cooperation on the Authorized Economic Operator (AEO) Program is an important content. Customs Magazine had an interview with Deputy Director of the Post-Customs Clearance Audit Department (General Department of Customs) Nguyen Sy Hoang about this issue.

Could you please provide general information and outstanding results about the Authorized Economic Operator (AEO) Program of Vietnam Customs?

The AEO Program has been piloted in Vietnam since 2011, and officially implemented since 2014.

After more than 10 years of implementation, with development steps according to the roadmap, the program has shown many positive aspects, making an important contribution to socio-economic development, attracting foreign investment, and enhancing national position in the international community and especially has been appreciated by the business community.

This is also an important step for Vietnam to have a basis to negotiate and sign Mutual Recognition Agreements with Customs of other countries.

The AEO program has brought many benefits to businesses, such as: shortening customs clearance time; minimizing costs; enhancing the reputation and brand of enterprises in the marketplace...

By May 2024, there were 75 enterprises recognized as AEOs. Of which, there are 24 Vietnamese enterprises, 16 Korean enterprises, 15 Japanese enterprises and the rest are American, Danish, Chinese enterprises...;

AEOs account for about 35% of the country's total import-export turnover.

What are advantages, disadvantages and problems of Vietnam Customs in the implementation of the AEO Program?

Since implementation, Vietnam Customs has always received attention from leaders at all levels and support and consensus from the business community. This has contributed to the development of the program.

However, during the implementation process, there were also some difficulties and problems:

First, the legal basis for AEOs still has some limitations, causing difficulties in practice. In addition, Vietnam's regulations on conditions for applying priority regimes are not completely consistent with the recommendations of the World Customs Organization (WCO), becoming a barrier when Vietnam negotiates and signs Mutual Recognition Agreements on AEO.

Second, the business community's interest in the program is not really high. The majority of enterprises in Vietnam are small and medium-sized enterprises (accounting for over 95% of the total number of enterprises), unable to meet the conditions on import-export turnover to enjoy the priority regimes.

According to the orientation of expanding participants in the AEO Program, Vietnam Customs is researching and proposing amendments to legal regulations so that small and medium-sized enterprises also have the opportunity to access and participate in this program.

Third, the program has not received the necessary attention and coordination from other ministries and agencies. To closely manage AEOs, the Customs agency regularly asks for opinions and assessments from relevant ministries and agencies, however in some cases the coordination level between ministries and agencies is not effective.

In addition, Vietnam Customs expects to expand the priority regime for businesses, not only in the customs field but also in many other areas such as tax policy, specialized inspection, which requires close attention and coordination between relevant ministries and agencies.

The AEO Program is one of the key contents discussed at the 33rd ASEAN Customs Directors General Meeting, could you please tell more about this content?

Vietnam Customs and all ASEAN member States have completed the signing of the Mutual Recognition Agreement on AEOs in ASEAN in September 2023.

ASEAN member States are implementing appraisal and pilot steps according to the agreement's roadmap and it is expected that the program will be officially deployed in April 2025.

In addition to signing mutual agreements with ASEAN member States, which other States is Vietnam Customs promoting the signing of mutual recognition agreement on AEO with?

In addition to signing mutual agreements with ASEAN member States, Vietnam Customs is promoting the signing of mutual recognition agreements on AEO with some countries such as South Korea, China...

Besides, many customs administrations of countries are raising questions about signing mutual recognition agreements on AEO with Vietnam such as Saudi Arabia, India, Russia...

Could you share the advantages and disadvantages of Vietnam Customs when signing and implementing mutual recognition agreements on AEO with customs administrations of other countries?

As mentioned above, the Customs of many countries around the world are very interested in and promoting the signing of mutual recognition agreements on AEO with Vietnam. This affirms the reputation and brand of Vietnam Customs as well as the Vietnamese business community with international partners.

However, Vietnam Customs determines that the signing of the Mutual Recognition Agreements on AEO must be based on the motto of mutual benefit.

Therefore, before signing the Mutual Recognition Agreements on AEO with Customs administrations of other countries, Vietnam Customs will carefully evaluate positive and negative impacts to ensure maximum benefits for Vietnam's AEOs in particular and Vietnam's import-export market.

Moreover, Vietnam's current legal regulations on priority enterprises still have some points that are not consistent with the recommendations of the WCO's SAFE framework. This also hinders the roadmap for signing and implementing Mutual Recognition Agreements on AEO.

The General Department of Customs has been advising on the development of a number of legal documents such as: Decree amending Decree No. 08/2015/ND-CP, Decree No. 59/2018/ND-CP, Circular amending Circular No. 38/2015/TT-BTC, Circular No. 39/2018/TT-BTC, including amendments related to AEO to comply with WCO’s recommendations.

As you mentioned above, the General Department of Customs is developing a number of new legal documents, including amendments related to the AEO Program. Could you detail more of this content?

According to the general assessment when implementing the Mutual Recognition Agreement on AEO in ASEAN, there are a number of criteria recommended in the WCO SAFE framework that have not been regulated by Vietnamese law, including: trading partner security, crisis management and troubleshooting and measurement, analysis, improvement.

Therefore, the upcoming amendments to AEO will focus on supplementing legal regulations corresponding to the above criteria to facilitate the signing of Mutual Recognition Agreements on AEOs with countries around the world.

Thank you Sir!

Source: Customs News