Experience in compliance with customs laws of Japanese businesses

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AEO can help businesses benefit from trade facilitation. In the photo: Tokyo Port, Japan. Photo: Collected

Japan granted AEO certification to more than 700 businesses

According to Mr. Kazuyoshi Mizuno, Head of the Customs Department - Japan Chamber of Commerce and Industry (JCCI), in the context of globalization and cross-border socio-economy, the international circulation of goods and the expanded human exchange has increased risk of drug trafficking and terrorism-related-goods, threatening the safety and security of people's lives, as well as increasing the problem of smuggling and intellectual property infringement.

Sharing experiences on customs law compliance of Japanese businesses at the recent Customs - Business Forum 2023, Mr. Kazuyoshi Mizuno said: "To meet domestic and The international community on import and export not only needs to strengthen the role of Customs but also requires cooperation of private sector enterprises. In other words, raising the awareness of legal compliance of businesses dealing with import and export activities and strengthening the internal control system to ensure legal compliance is an indispensable factor", said Mr. Kazuyoshi Mizuno.

Mr. Kazuyoshi Mizuno said that violations of the Coordinating Committee for Multilateral Export Controls (CoCom) in 1987 caused Japan to tighten regulations on supervision, management of import and export and enhance compliance with customs laws. For example, a case that a Japanese machine tool manufacturing company submitted false documents and illegally exported products subject to export restrictions to countries controlled by COCOM, was discovered, which caused Japan to be heavily criticized by the international community, leading to a wave of boycotts of Japanese products worldwide.

After this incident, the Japanese Government strongly strengthened the trade security control system, expanded sanctions for violations and required import-export companies to implement internal compliance programs (ICP), requiring businesses to step up efforts to proactively manage goods circulation until the final delivery point.

In particular, the next event that had a major impact on the control of import and export activities was multiple terrorist attacks that occurred simultaneously in September 2001 in the United States. The anthrax terrorist attack in the United States has disrupted international logistics and required a system that ensures both cargo security and facilitates trade.

To solve this problem, in 2005 the World Customs Organization (WCO) adopted the AEO system (Authorized Economic Operator Program). Accordingly, each country's Customs administration will issue certificates to businesses that have built security management systems and comply with the law, while also providing other benefits such as simplifying customs procedures.

Currently, there are more than 90 countries and regions around the world that have applied the AEO system. Japan also applied this system to exporters from March 2006 and as of June 2023, there were 747 companies granted AEO certification.

Mr. Kazuyoshi Mizuno said that one of the reasons why Japanese companies are highly conscious of complying with customs laws is that they have strengthened internal control after incidents.

The Japanese Government's measures to support internal control for businesses are to issue guiding documents and organize seminars on legal compliance for employees in charge of foreign trade affairs of businesses, advise on customs rules system before carrying out import-export activities and other related customs procedures.

In addition, the Government also supports through training activities, disseminating knowledge, and granting national certificates as experts in customs operations. Foreign trade procedures require high knowledge, so state support in human resource training is necessary.

Mutual recognition mechanism promotes trade development

Besides, Mr. Kazuyoshi Mizuno also appreciated the diverse support measures of the General Department of Customs to help domestic enterprises comply well with customs laws.

“Controlling trade security will become even more important in the future when Vietnam has signed many free trade agreements and is opening up to the global market. In addition, when the economy develops rapidly, new business establishments operate vibrantly and employees in charge of import-export work change a lot, the Government's supportive policies such as organizing continuous training programs will contribute to raising awareness about compliance with customs laws," said Mr. Kazuyoshi Mizuno.

However, according to Mr. Kazuyoshi Mizuno, there are currently only more than 70 businesses granted AEO certification by Vietnam Customs. Therefore, how to raise businesses' awareness of compliance with customs laws and increase the number of AEO companies will be an issue that needs to be addressed in the near future.

In addition, AEO can help businesses benefit from trade facilitation when mutual recognition mechanisms among countries are implemented. When the AEO's mutual recognition mechanism with Japan is implemented, the trade turnover of Japanese companies will be promoted and the importance of Vietnam as a free trade country will be enhanced more.