Amidst the higher volume of global trade and growing importance of supply chain management, a major task in international distribution is to simultaneously ensure security and facilitation of trade. In order to achieve this, Japan Customs has been implementing an AEO program to provide benefits such as trade facilitation to opera-tors with a system to ensure compliance including cargo security. Furthermore, Ja-pan Customs is working on AEO mutual recognition with other countries which im-plement AEO programs to achieve secure and facilitated bilateral trade.

Chapter 3

Further Facilitating

Trade Procedures

021Fu r t h e r Fa c i l i t a t i n g Tr a d e P r o c e d u r e s 020

Since the terrorist attacks in the United States on September 11, 2001, ensuring both security and facilitation of international trade has been indispensable in international distribution. In response to such challenges, a new international framework, the WCO SAFE Framework of Standards to secure and facilitate global trade （SAFE）, was adopted at the World Customs Organization （WCO） in 2005, which includes a concept of the Authorized Economic Operator （AEO） program, under which customs approves operators with good records of compliance and provides them with benefits, such as simplified customs procedures. In 2006, the WCO adopted the AEO Guidelines covering AEO requirements and benefits , and in 2007, the SAFE was amended to incorporate the AEO Guidelines. Japan and many other countries have already introduced or are establishing an AEO program, in accordance with the SAFE.

AEO Program

AEO Prog ramTowards further trade facilitation and appropriate customs clearance

Further Facilitating Trade Procedures

A major challenge in international distribution and supply chain management is to simultaneously en-sure security and facilitation of trade in recent years. The Customs and Tariff Bureau and Japan Customs are striving to implement an Authorized Economic Operator（AEO） program consistent with interna-tional standards, aiming to ensure security and facili-tation of international trade by building partnerships with private enterprises.

- Author i z ed Econom ic Operat or -

In order to ensure both security and facilitation of the international movement of goods, it is vital to have as many operators as possible with an internal system for compliance including cargo security.The AEO program offers benefits, such as simplified customs procedures, to operators with a system to ensure cargo security and compliance.

Operators with a system to ensure compliance including cargo security: benefits of faster and simplified customs clearance

Demonstrated compliance with customs requirementsPhysical and personnel securitySystem for management of commercial recordsTrading partner securityCooperation with customsFinancial viability　　　　etc.

All parties involved in the international movement of goods

AEO in the WCO Frameworks of S tandards

Compliance-re�ected examinations and inspectionsReduced fees and other charges　　　　etc.

023Fu r t h e r Fa c i l i t a t i n g Tr a d e P r o c e d u r e s 022

Goods manufactured by an AEO manufacturer with an excellent compliance including cargo security management arrangement can be declared for export by exporters other than the AEO manufacturer and given export permission without placing cargoes in bonded areas. The AEO manufacturer shall consign the exports to exporters with a good compliance record.

AEO program for Manufacturers

Faster clearance for manufacturers exporting through their agents

Logistics operators with an excellent compliance arrangement includ-ing cargo security management （AEO logistics operators） can receive the benefit of bonded transportation without obtaining individual permission, and can also transport goods which are consigned by exporters, from areas other than bonded areas, for example, from the premises of exporters directly to the loading port.

AEO program for Logistics Operators

Simplified procedures for cargo transportation

Customs brokers with a system to ensure compliance including cargo secu-rity （AEO Customs Brokers） can make import declaration for duty payment after cargo pickup. AEO customs brokers can also lodge export declarations and get export permission without placing cargo in customs areas on the condition that AEO logistics operators transport the consignment.

AEO program for Customs Brokers

Responding to requests for faster cargo clearance

Operators of customs warehouses with a system to ensure compliance including cargo security （“AEO Warehouse Operators”） may establish customs warehouses with no customs fees and only through notification to the Director-General of Customs.

AEO program for Warehouse Operators

Simplified procedures for setting up bonded warehouses etc.

Customs examinations and inspections for duty payment are basically abridged for importers with a system to ensure compliance including cargo security （AEO importers）, and declaration for duty pay-ment can be made after picking up of the cargo.

AEO program for Importers

Early pickup of import cargoes

Exporters with a system to ensure compliance including cargo security （AEO exporters） can real-ize swift and smooth lading （loading） by being able to lodge export declarations and get export permission while placing the cargo at their own facilities instead of having to bring the export cargo into customs areas. Customs examinations and inspections are basically abridged for such exporters.

AEO program for Exporters

Export declaration can be lodged at exporters’ warehouse

The Customs and Tariff Bureau and Customs are pro-moting the AEO program for wide range of parties involved in international trade such as importers, ex-porters, warehouse operators, customs brokers, logistics operators and manufacturers to ensure security and fa-cilitate clearance procedures in the supply chain.

Efforts Toward Establishing an AEO Program

Further Facilitating Trade Procedures

025Fu r t h e r Fa c i l i t a t i n g Tr a d e P r o c e d u r e s 024

Japan-U.S.A.�e commencement of consultation on mutual recognition was agreed in Apri l 2007. In June 2 0 0 9 , t h e m u t u a l recognition arrangement was signed.

J a p a n - E u r o p e a n Union In February 2008, both parties established a working group to achieve mutual recognit ion at the Firs t EC-Japan Joint Customs Co-operation Committee. In June 2010, they agreed and signed on the mutual recognition.

Japan-SingaporeIn November 2007, an agreement to s t udy r e sp e c t i v e p rog r a ms w a s reached at the Customs Director Generals’ meeting between Japan and Singapore. In June 2011, the mutual recognition arrangement was signed.

Japan-New Zea landI n M ay 2 0 07, i t w a s a g r e e d to s t a r t consultation on mutual recognition. In May 2008, the mutual recognition arrangement was signed.

Japan-ChinaIn November 2008, at the Second Japan-China-Korea Tripartite Customs Heads' Meeting, it was agreed to establish a working group to study AEO programs of each country. �e �rst Japan-China-Korea AEO working group was held in August 2009.

Japan- KoreaIn November 2008, at the Second Japan-China-Korea Tripartite Customs Heads' Meeting, it was agreed to establish a working group to study AEO programs of each country. In May 2011, the mutual recognition arrangement was signed.

Japan-TaiwanIn December 2014, consultation on mutual recognition has commenced.

Japan-MalaysiaIn August 2007, an agreement to study respective programs was reached at the Cus toms D i re c tor Genera ls ’ meet ing. I n Ju n e 2 014 , t h e mutua l recognit ion a r r a n g e m e n t w a s signed.

Japan-Hong KongIn April 2015, consultation on m u t u a l r e c o g n i t i o n h a s commencedIn August 2016, t he mut u a l r e cog n i t ion arrangement was signed.

Japan-CanadaExpert-level consultations had been held since April 2009. In June 2010, a mutual recognition arrangement was signed.

Japan-Switzerland In Se p t e m b e r 2 0 1 2 , consultation on mutual r e c o g n i t i o n h a s commenced.

Ｗe will expand the mutual recognition of AEO programs in cooperation with countries around the world.

Further Facilitating Trade Procedures

Japan-U.S.A.�e commencement of consultation on mutual recognition was agreed in Apri l 2007. In June 2 0 0 9 , t h e m u t u a l recognition arrangement was signed.

J a p a n - E u r o p e a n Union In February 2008, both parties established a working group to achieve mutual recognit ion at the Firs t EC-Japan Joint Customs Co-operation Committee. In June 2010, they agreed and signed on the mutual recognition.

Japan-SingaporeIn November 2007, an agreement to s t udy r e sp e c t i v e p rog r a ms w a s reached at the Customs Director Generals’ meeting between Japan and Singapore. In June 2011, the mutual recognition arrangement was signed.

Japan-New Zea landI n M ay 2 0 07, i t w a s a g r e e d to s t a r t consultation on mutual recognition. In May 2008, the mutual recognition arrangement was signed.

Japan-ChinaIn November 2008, at the Second Japan-China-Korea Tripartite Customs Heads' Meeting, it was agreed to establish a working group to study AEO programs of each country. �e �rst Japan-China-Korea AEO working group was held in August 2009.

Japan- KoreaIn November 2008, at the Second Japan-China-Korea Tripartite Customs Heads' Meeting, it was agreed to establish a working group to study AEO programs of each country. In May 2011, the mutual recognition arrangement was signed.

Japan-TaiwanIn December 2014, consultation on mutual recognition has commenced.

Japan-MalaysiaIn August 2007, an agreement to study respective programs was reached at the Cus toms D i re c tor Genera ls ’ meet ing. I n Ju n e 2 014 , t h e mutua l recognit ion a r r a n g e m e n t w a s signed.

Japan-Hong KongIn April 2015, consultation on m u t u a l r e c o g n i t i o n h a s commencedIn August 2016, t he mut u a l r e cog n i t ion arrangement was signed.

Japan-CanadaExpert-level consultations had been held since April 2009. In June 2010, a mutual recognition arrangement was signed.

Japan-Switzerland In Se p t e m b e r 2 0 1 2 , consultation on mutual r e c o g n i t i o n h a s commenced.

Importers Exporters Warehouse Operators Customs Brokers Logistics Operators

Number of AEOs 92 240 128 143 7

（As of 15st March,2017）

Authorized Economic Operator

As of February 2017

In 2006, the WCO （World Customs Organization） adopted the AEO Guidelines as a technical guideline to implement AEO programs. AEO Guidelines sets conditions and requirements to be met by customs and economic operators, authorization procedures, specific examples of ben-efits for economic operators approved as AEOs, and rules concerning mutual recognition between AEO programs of different countries. WCO members are expected to design their own AEO programs conforming to the guideline. In December 2009, WCO adopted the AEO Implemen-tation Guidance which describes steps to develop an AEO program. The AEO compendium, which is a table of comparison for AEO programs adopted by various countries, is also renewed as necessary. To date, AEO programs have been introduced in many countries and regions, and in order to further the secure and facilitated flow of cargoes, dis-cussions aimed at mutual recognition of the respective programs have been conducted among administrations which have introduced AEO programs consistent with world standards. Japan has already agreed on mutual recognition with New Zealand （May 2008）, the United States

（June 2009）, the EU, Canada （June 2010）, Korea （May 2011）, Singapore （June 2011）, Malaysia （June 2014）, and Hong Kong （August 2016）.

AEO Programs intensify the linkages between Japan and its partners around the World

Partnership with overseas AEO programs

027Fu r t h e r Fa c i l i t a t i n g Tr a d e P r o c e d u r e s 026

Y CustomsX Customs

Declarations of general

Declarations by AEOs

*As the result of abolishing the restriction on area of services of customs brokers

Declaration（selectable）

B customsbroker

Importer/Exporter

A customsbroker

customs officewhere goods are

not stored.

The present system

consignment

cargo

B customsbroker

Importer/Exporter

Y Customs

A customsbroker

X Customs

Y Customs

X Customs

consignment （selectable）

Importer/Exporter

consignment （selectable）

cargo

A customsbroker B customs

broker

cargo

Declaration

customs officewhere goods are

not stored.

customs officewhere goods are

not stored.

customs officewhere goods

are stored.

customs officewhere goods

are stored.

customs officewhere goods

are stored.

Declaration

DeclarationDeclaration

Declaration

In principle, import/export declarations shall be lodged to the customs office where imported goods are stored in order to ensure appropriate customs clearance and effective examination/inspection. On the other hand, if these import/export declarations are allowed to be lodged to any customs of-fices, it will contribute to further trade facilitation by promoting efficiency and cost reduction for related parties.

Therefore, Japan amended the Customs Law so that AEOs* can lodge import/export declaration to any customs offices, while maintaining the principle that import/export declaration shall be lodged to the customs office where the goods are stored.

* AEOs: AEO importers, AEO exporters and AEO customs brokers etc. that are authorized by the Director-General of regional customs as those with the abilities to conduct their operations with regard to importation/exportation appropriately.

In many cases, customs brokers who have permission from the Director-General of regional cus-toms lodge import/export declarations on behalf of the importers/exporters. Along with broadening the choice of customs office for declaration, Japan amended the regulation on customs brokers such as abolishing the restriction on their service areas which are limited to the customs area where they get permission.

Currently, Japan is preparing for implementa-tion of broadening the choice of customs office for declaration by 2017 when NACCS （Nippon Automated Cargo and port Consolidated Sys-tem） is planned to be renewed.

The volume of import and export cargoes keeps increasing as so -ciety and the economy are more globalized. Japan Customs has con-tinuously upgraded import/export procedures, making full use of in-formation and communication tech-nologies （ICT） to further facilitate international trade.

Chapter 4

Clearance with ICT

029More Ef f i c i en t Cus toms Clea r ance w i th ICT

Broadening the choice of customs office for import/export declaration

028