Promoting the signing of mutual recognition agreement on AEO

VCN – The General Department of Vietnam Customs (GDVC) has signed the mutual recognition agreement on Authorized Economic Operator (AEO) with customs administrations of the Association of Southeast Asian Nations (ASEAN), including Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.
Customs of ASEAN countries recognize each other as authorized economic operators Customs of ASEAN countries recognize each other as authorized economic operators
Experience in training and issuing certificates of accreditation as Customs broker Experience in training and issuing certificates of accreditation as Customs broker
Hanoi Customs manages 12 authorized economic operators Hanoi Customs manages 12 authorized economic operators
Promoting the signing of mutual recognition agreement on AEO
GDVC’s Deputy Director General Nguyen Van Tho

Customs News interviewed GDVC’s Deputy Director General Nguyen Van Tho about outstanding results in the implementation of Vietnam’s AEO program and the extraordinary efforts of Vietnam Customs in negotiation to sign the agreement, as well as the benefits of agreement and orientation in the coming time.

Could you tell us about the actual implementation of the AEO program in Vietnam and Southeast Asian Nations?

Deputy Director General Nguyen Van Tho:

Vietnam has piloted the AEO program since 2011. The program was officially launched in 2014 by including regulations on the AEO program in Customs Law 2014. Vietnam has applied this program to enterprises engaged in export and import activities.

Until the end of 2022, 74 enterprises in the whole country were recognized as AEOs, including 23 Vietnamese enterprises, 15 Korean enterprises,15 Japanese enterprises and enterprises from Taiwan (China), the US, Italy and Denmark…

According to reported data, the total trade in goods of 74 AEOs reached US$ 221 billion, accounting for 30% of the total turnover of the whole country. The AEOs’ operation is quite diverse such as industry, outsourcing and processing, manufacturing, and agriculture, and creates jobs for hundreds of thousands of workers.

Following the orientation set out in the Customs Development Strategy to 2030, the GDVC will improve regulations on AEO based on the recommendations of the World Customs Organization (WCO), such as applicable conditions, priority regimes, powers and responsibilities of the customs authority; rights and obligations of enterprises, customs management for AEOs, building and promoting the implementation of mutual recognition agreements on AEO between Vietnam Customs and critical partners in the world.

Regarding the implementation of the AEO program in the region, all ASEAN member states have officially deployed the program with different levels depending on the status of each nation. However, most states have implemented the program based on the WCO’s recommendations on the SAFE Framework.

Recently, the GDVC has signed a Mutual Recognition Agreement on the AEO program with ASEAN member states. What are the benefits of signing for AEOs in each state?

Deputy Director General Nguyen Van Tho:

Through mutual recognition, AEOs will enjoy specific benefits such as: increasing economic benefits due to reducing customs clearance time and costs; ensuring on-time delivery, improving competitive advantage; strengthening the security of the goods supply chain when importing and exporting goods among the signing parties.

To sign the agreement, what legal differences did Vietnam have to revise?

Deputy Director General Nguyen Van Tho:

The negotiation among countries in the region is implemented the WCO’s guidelines, including phase 1: comparing the regulations on AEO among the signatories; phase 2: conducting actual verification in some AEOs in all signatories; phase 3: negotiating the content of the draft agreement; phase 4: signing the agreement.

Ending phase 1, some of Vietnam’s regulations on AEO are not similar to those of other countries. To solve the problem, the GDVC has drafted supplement regulations to ensure that Vietnam’s regulations are consistent with those of signing countries.

What are the problems and solutions to proactively handle while implementing the agreement shortly?

Deputy Director General Nguyen Van Tho:

We will not face great difficulties in implementing the agreement. However, this is the first step, so Vietnam Customs and other customs administrations will record the actual status and coordinate the handling of arising problems. For example, the IT application in assessing and classifying AEOs of the countries is conducted to provide appropriate monitoring and management measures because the agreement on AEO with customs administrations of ASEAN member states is the first agreement that Vietnam has signed and implemented.

What should AEOs in Vietnam do to take advantage of the benefits of mutual recognition?

Deputy Director General Nguyen Van Tho:

AEOs will benefit from mutual recognition agreements when importing and exporting goods with partners from countries that have signed agreements with Vietnam. To take advantage of these agreements, Vietnamese AEOs can seek suppliers and customers in these countries.

In addition to the signing of mutual recognition in ASEAN, how does Vietnam expand the mutual recognition?

Deputy Director General Nguyen Van Tho:

The key content of the Customs Development Strategy to 2030 is to promote the implementation of mutual recognition agreements on AEO between Vietnam Customs and customs administrations in key countries worldwide.

The amendment to domestic regulations to ensure that Vietnam’s provisions on AEO are consistent with those recommended by the WCO will help shorten the negotiation time with other countries. Therefore, the pilot implementation of the agreement with ASEAN states will create a premise for the GDVC to negotiate and sign with other countries.

On the other hand, the negotiation and signing of an agreement on AEO are considered by the signing parties to include in the draft customs cooperation agreement between Vietnam and some other countries.

Thank Deputy Director General!

By Thai Binh/Ngoc Loan

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