Saudi Customs launches an AEO programmeBy Abdulrahman Althukair, Director of Risk Management and Head of AEO, Saudi Customs
Saudi Customs is the latest Customs administration to implement an authorized economic operator (AEO) programme. In doing so, its objective is to modernize border processing and support the trade facilitation objectives outlined in “Vision 2030,” a national blueprint for the Kingdom of Saudi Arabia to achieve its long-term goals and expectations that was announced in April 2016.
Vision 2030 outlines a new national direction for Saudi Arabia, and relies on the following three pillars to achieve its goals:
- A vibrant nation;
- A thriving economy;
- An ambitious nation.
The objective of the “thriving economy” pillar is for Saudi Arabia to become a leading regional logistics hub by partnering with the private sector to maximize investments in infrastructure and modernize government trade promotion programmes.
Crown Prince Mohammad bin Salman bin Abdulaziz Al-Saud enunciated the strategy as follows: “We will strive to facilitate the movement of people and goods, and to simplify Customs procedures at our ports. As a result, we will create an environment attractive to both local and foreign investors.”
One of the driving forces behind this move is the desire to take full advantage of the Kingdom’s unique strategic geographical position – connecting Asia, Europe and Africa. Another driver is the aim to become a global investment powerhouse, which will, as a consequence, stimulate the economy and diversify sources of revenue.
In addition, Vision 2030 is encouraging major domestic corporations to expand across borders into the global marketplace. The modernization of processes that meet the needs of the private sector, while also ensuring compliance and security, is an important part of the plan set out in the Vision.
Role for Saudi Customs
Obviously, Saudi Customs plays a critical role in supporting Vision 2030, which highlights trade facilitation as a key deliverable. The agency is a modern organization that operates at 14 international airports, 15 land border ports, 11 marine ports and one rail site, and keeps evolving to ensure maximum efficiency.
One of the most important initiatives under the Vision’s framework is the development and implementation of an AEO programme, which will offer beneficial facilities to compliant and low-risk companies trading internationally.
A modern and holistic AEO programme
The Saudi AEO programme is a Customs led, government wide priority that takes a holistic approach to modern border management, not only supporting the Kingdom’s broader international economic objectives, but also enabling Customs to focus its efforts on higher risk areas.
Saudi Customs formally kicked-off its AEO project in the spring of 2017. Benefiting from high-level support from within the Kingdom, a project team is currently working on building “a trade facilitation programme that offers simple border processing for companies that meet specific compliance and security standards.”
Based on a previous facilitation scheme called ILTIZAM, the AEO programme is open to all companies irrespective of their roles in the international supply chain, the mode of transport they use or the Customs procedures their activities require.
While directly supporting Vision 2030, implementing an AEO programme also brings Saudi Arabia in line with the Gulf Cooperation Council (GCC) objective of having AEO programmes implemented in all GCC countries. The programme will also ensure that the Kingdom meets the requirement of Article 7 of the World Trade Organization’s Trade Facilitation Agreement related to “Trade Facilitation Measures for Authorized Operators.”
Several companies have participated in the pilot project during which the certification process was tested. The project involved not only the development of a new certification process, but also a stakeholder engagement strategy, media and public relation activities, training for private and public sector parties, and key performance measurement indicators. The AEO programme will officially open at the end of 2017.
Saudi Customs has developed a comprehensive benefits package for AEO certified companies to provide a valuable return on investment (ROI) for them. Some of these benefits include:
- simplified border processes;
- reduced document requirements to obtain a Customs release;
- dedicated fast lanes at certain ports of entry;
- greater levels of speed and predictability for import and export processes;
- dedicated Customs key account managers;
- lower inspection rates;
- “front-of-the-line” and priority service for a variety of government processes, such as permit and licence applications;
- recognition of the status in other countries, once mutual recognition agreements (MRAs) are signed.
With regards to the last point above on the “recognition of the status,” it should be highlighted that the negotiation of MRAs with other Customs administrations is considered as key, as it will provide a greater incentive for companies to participate in the programme.
There are, of course, also benefits for Saudi Customs. The programme will enable it to enhance its risk management policy, and better protect and secure its borders by ensuring the systematic assessment of companies and their capabilities to meet the high standards of compliance and security.
As H.E. Ahmed A. Alhakbani, the Director General of Saudi Customs, said, “Implementing an AEO programme is allowing us to focus our frontline resources away from known operators representing a low risk, towards unknown operators more likely to take a risk or less experienced with Customs procedures.”