Honest traders transacting business with the government will soon be rewarded with the signing of Customs Administrative Order (CAO) 5-2017 establishing the Authorized Economic Operator (AEO) program.
The program gives incentives to stakeholders with high levels of compliance with customs rules and regulations.
“Applicants must meet the standard of reliability and trustworthiness, which shall be measured by its level of risk, the nature of the business and the conduct of its importation as against customs revenue, compliance, and cargo security,” the order states.
Some of the benefits provided in the CAO are exemption from renewal of accreditation, a processing and selectivity lane for AEO shipments with no documentary, physical and non-intrusive examinations, advance cargo clearances, one-time exemption certificates, and the expedition of customs clearances for exports.
The program has three components: a cargo security system that will ensure the integrity and security of the imported goods; a trade clearance system that enables highly compliant stakeholders to clear their goods with minimum customs border intervention; and a mutual recognition arrangement (MRA) that sets processes to implement and maintain mutual recognition between two or more customs administrations.
Under the CAO, the following stakeholders can apply for accreditation: importers, exporters, customs bonded warehouses (CBW) and customs facility warehouses (CFW), customs brokers, non-vessel owning common carriers (NVOCC); local and international freight forwarders with offices in the Philippines, shipping lines or airlines and their agents, authorized agent banks (AAB), local transport operators, and foreign suppliers, manufacturers, and other entities in the logistics and international supply chain accredited as AEOs by another country with which the Philippines has an MRA.
CAO 5-2017 serves as the implementing rules and regulations of sections 1227 and 1228 of Republic Act 10863 otherwise known as the Customs and Modernization and Tariff Act (CMTA).
Applicants were warned that false or misleading information in documents submitted as well as customs laws violations will be grounds for rejection.
The CAO, published August 23, will take effect 15 days from that date.