AEO Program in Japan - etouches Program in Japan WCO Knowledge Academy July 4th, 2013. 1.Overview of Japan™s AEO Program 2.Mutual Recognition Arrangement ... Importers Exporters

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Text of AEO Program in Japan - etouches Program in Japan WCO Knowledge Academy July 4th, 2013. 1.Overview of...

  • Japan Customs

    AEO Program in JapanAEO Program in Japan

    WCO Knowledge AcademyJuly 4th, 2013

  • 1. Overview of Japans AEO Program

    2. Mutual Recognition Arrangement

    3. Challenges

    Outline

    1

  • I. Overview of Japans AEO Program

    2

  • AEO (Authorized Economic Operator) Program

    AEO program which ensures security while facilitating trade, working in partnership with private sectors.

    Japan Customs introduced the AEO program in conformity with international standards (March 2006, developed subsequently)

    Economic Operators who are authorized by Customs as having established a system to ensure cargo security and compliance enjoy benefits such as simplified and expedite customs procedures

    AEO Program

    Efforts in international community after 9/11 to address need for strengthened security

    Background

    Promotion of trade facilitation by streamlining customs procedures with a view to striving to greater competitiveness in international environment

    3

  • Scope of Japans AEO Program

    Shipping CompanyForwarder

    Bonded Area

    (CY)

    Importers

    Exporters

    Manufacturers

    Transportation

    Companies

    Warehouse

    Operators

    Customs

    Brokers

    Shipping

    Companies

    and

    Airlines

    International Logistic Operators

    Importers

    Exporters

    abroad

    Bonded area

    CY

    Shipping Company

    Importer

    Forwarder

    Importation

    Exportation

    Exporter

    Customs Broker

    Customs

    Customs Broker

    Customs

    Airline

    Airline

    4

  • Exporters 236 Exporters

    Importers 89 Importers

    Warehouse Operators

    116 Warehouse Operators

    Customs Brokers 86 Customs Brokers

    Logistic Operators

    8 Logistic Operators

    (as of July 1, 2014)

    Total: 535 AEOs

    Current Situation of AEO operators

    5

  • Consistent withConsistent with

    WCO SAFE FoSWCO SAFE FoS

    Compliance record

    Proper ability to conduct operations

    Compliance Program

    organizational set-up

    due Customs procedures

    cargo/conveyance/premises

    security

    internal audit

    contracting parties requirement

    communication with Customs

    crisis management

    financial integrity

    education/training

    etc.

    Authorized ImportersAuthorized Importers- Pre-arrival lodgment of import declaration and

    pre-arrival import permission early release of cargo

    - Reduced number of elements for import declaration

    - Reduced examination and inspection at the time of

    import

    - Periodical lodgment of duty/tax payment declaration

    Authorized ExportersAuthorized Exporters- Export procedures are completed while keeping the

    cargo in their own premises

    - Reduced examination and inspection at the time of

    export

    Authorized Warehouse Operator Authorized Warehouse Operator - Establishment of a new Customs warehouse only by

    notification

    - Free monthly fee

    The Requirements and Benefits

    Examples of BenefitsRequirements

    6

  • General Procedure

    Benefits of Japans AEO Program: Importers

    After placing goods into Customs area

    Ships Entry

    Duty

    Payment

    Duty

    Payment

    Import/Duty Payment Declaration

    Import Declaration

    Ships Entry

    Duty Payment Declaration

    Cargo ReleaseCargo ReleaseCargo

    Release

    Import DeclarationImport Declaration

    Ships EntryShips Entry

    Import PermitImport PermitImport Permit

    Import Permit

    Examination

    Inspection

    Cargo Release

    Examination

    Inspection

    Import DeclarationImport DeclarationImport Declaration

    (Optional)

    (Periodical)

    - Compliance-reflected reduced examination and inspection

    - Pre-arrival lodgement of import declaration and permission

    - Release of cargo before duty/tax payment declaration and duty/tax payment

    Before placing goods into Customs area

    Compliance Reflected

    Procedure for Authorized Importers

    conducted at Customs area

    7

  • Benefits of Japans AEO Program: Importers

    Mean Time required for a time period from Customs declaration to Import permit (Time Release Study by Japan Customs)

    General Cargo

    0.1

    10

    20

    30

    (hour)

    Maritime Cargo

    AEO Cargo

    2.6

    3.3

    4.3

    4.9

    5.6

    10.2

    13.1

    19.8

    26.11st study (in 1991)

    2nd study (in 1992)

    3rd study (in 1993)

    5th study (in 1998)

    4th study (in 1996)

    6th study (in 2001)

    9th study (in 2009)

    7th study (in 2004)

    8th study (in 2006)

    General Cargo hours

    hours

    3.1

    10th study (in 2012)

    8

  • Premises of Exporters

    Customs Area (CY)

    Procedure for Authorized Exporters

    General Procedure

    Benefits of Japans AEO Program: Exporters

    Export

    Permit

    Examination

    Inspection

    Export

    Declaration

    - Waive the requirement to store goods in the Customs area

    - Compliance-reflected reduced examination and inspection

    Compliance

    Reflected

    Premises of ExportersCustoms Area (CY)

    Export

    Permit

    Examination

    Inspection

    Export

    Declaration

    9

  • Submission of Application

    Examination of application

    Authorization

    Authorization Process

    Process of AEO Authorization

    Post Audit Process

    Prior Consultation with Customs

    For quality assurance based on partnership

    with Business and Customs

    On-site inspection

    if requested

    10

  • Internal Audit Report AEO

    Preparatory Work

    - Examination of Internal Audit Report

    - Identify the points to be checked

    Regional

    Customs

    On-Site Audit

    - Process Inspection, Site Inspection, Interviews

    Audit Report CTB

    Administrative Order for Improvements

    Revocation

    If there is no proper improvements

    Regional

    Customs

    If a significant problem is found

    Process of Post Authorization Audit

    11

  • 12

    Hakodate Customs

    Tokyo Customs

    Yokohama Customs

    Nagoya Customs

    Osaka Customs

    Kobe Customs

    Moji Customs

    Nagasaki Customs

    Okinawa Regional Customs

    AEO Unit

    AEO Unit

    AEO UnitAEO Unit

    AEO Unit

    AEO Unit

    AEO Unit

    AEO Unit

    AEO Center(Operation for Consistency)

    Ministry of FinanceCustoms and Tariff Bureau(Policy & International Affairs)

    Operational Structures: Japan Customs

    12

  • II. Mutual Recognition Arrangement

    13

  • - Mutual Acceptance of AEO Status- Preferential Treatment which corresponds with AEO status of other country

    Concept of Mutual Recognition

    - Ensuring Security and Facilitation in the Global Supply Chain - Enabling Efficient Allocation of Customs Resources - Enhancing Competitiveness by Maximizing Benefits to Reliable Stakeholders

    14

  • 2008 Signed with New Zealand (May), implementation (Oct.)

    2009 Signed with the United States (June), immediate

    implementation

    2010

    Signed with the EU (June) Signed with Canada (June)

    2011

    Signed with Korea (May), implementation (Nov.) Signed with Singapore (May), implementation (Aug.) Implementation of EU-Japan MRA (May)

    2012 Implementation of Canada-Japan MRA (Nov.) Full-implementation of Japan-US MRA (Dec.)

    2014 Signed with Malaysia (June)

    History of Mutual Recognition

    15

  • Signed MRA with Malaysia on the occasion of WCO 2014 Council

    History of Mutual Recognition

    16

  • Benefits of Mutual Recognition

    AEO ExporterExport

    Import

    Partner Country

    Importer

    AEO Exporter

    Export Import

    Japan

    Other benefits can be provided by Mutual Recognition.

    No AEO programme

    Exporter ImporterExport Import

    After MR

    Before MR

    Importer

    Compliance-reflected inspection/examination by

    Mutual Recognition

    Compliance-reflected inspection/examination by domestic AEO programme

    Compliance-reflected inspection/examination by domestic AEO programme

    17

  • Three Phase Process toward Mutual Recognition

    Signing of Mutual Recognition ArrangementSigning of Mutual Recognition Arrangement

    ImplementationImplementation

    Phase 1: Comparison of AEO Programmes

    - to confirm compatibility of two programmes

    Phase 2: Joint Verification ofAEO Implementation

    - to confirm compatibility at operational level

    Phase 3: Development of MRA Text

    (Immediately after the signing)

    Discussionon MRbenefits

    Coordinationandenhancementof technicalcapabilitiesto implementMRA

    18

  • Fully operational AEO programmes in line with the WCO SAFE Framework

    AEO programmes must have: Proper mechanism to maintain the quality of AEOs

    Transparency and predictability

    Measures to ensure consistency of operation

    Enabling Factors (1)

    19

  • Adequate organisational settings within Customs to run its programme and to implement MRA

    Enabling Factors (2)

    Steady and well-functioning channel for information exchange for effective implementation, supported by legal framework on information exchange

    20

  • Adequate customs database and proper process to examine compliance records of applicants

    Proper IT system for Customs procedures and