What Is A Trusted Trader Program?
Trusted trader programs, otherwise known as, Authorized Economic Operator (AEO) programs create Customs-to-business partnerships with the goal of securing the supply chain and facilitating legitimate low risk trade. Trusted companies are considered low risk by Customs administrations and are examined or held up significantly less than regular companies when importing or exporting goods.
Customs Goal: Secure International Trade
The growth of global trade and increasing security threats to the movement of goods internationally, forces Customs administrations to focus on securing international trade. The World Customs Organization (WCO) developed the Framework of Standards to Secure and Facilitate global trade (SAFE). The framework sets a harmonized set of standards that Customs administrations can follow in developing their trusted trade programs.
SAFE’s Four Core Elements:
- Harmonization of advance electronic cargo information.
- Each country that commits to SAFE commits to employing a consistent risk management approach to address security threats.
- On the request of the Customs administration of the receiving nation, the Customs administration of the sending nation will perform an outbound inspection of high-risk containers and cargo.
- Definition of benefits that Customs will provide to businesses that meet minimal supply chain security standards and best practices.
How Can My Company Create A Trusted Relationship With Customs?
You can become a trusted trader when you prove to Customs you have high quality internal processes that will prevent goods in international transport to be tampered with.
To do this your company will have to:
- Ensure the integrity of your information (i.e. what you say is in the container is actually in the container)
- Ensure the integrity of your companies employees since they have access to your goods and information about the goods you have in your containers.
- Secure access to your companies premises to prevent unauthorized persons to put unwanted goods in your containers.
If you successful meet these criteria then Customs will have greater trust in your company and perform less or no examinations on the goods you import and export. There are currently about 35-40 WCO countries internationally who have introduced trusted trader programs.
PIP, C-TPAT & Trusted Trade
North America trusted trade programs are as follows; in Canada the program operates under the name Partners in Protection (PIP), in the United States it is known as Customs Trade Partnership Against Terrorism (C-TPAT) and in Mexico the program is simply called the Authorized Economic Operator.
Partnerships are also in place between various countries’ Customs administrations to extend trusted trader benefits. These partnerships are known as Mutual Recognition Arrangements (MRAs) and allow trusted trade companies to receive border facilitation benefits in other countries. Trusted trade members who wish to receive MRA benefits must grant their respective program the consent to share the agreed upon information.
Canada Border Services Agency (CBSA) has MRAs with the following foreign trusted trade programs:
- U.S. Customs and Border Protection and C-TPAT
- Japan Customs and its AEO
- Korea Customs and its AEO
- Singapore Customs and its AEO program
- Mexico and its AEO program
- Australia Customs and its Australian Trusted Trader Program (ATT)
United States Customs and Border Protection (CBP) has MRAs with the same countries CBSA has and in addition to those:
- New Zealand and its Secure Export Scheme program
- Jordan and its Golden List program
- European Union and AEO program
- Taiwan and its AEO program
- Dominican Republic and its AEO program
The Benefits Of Trusted Trade Programs
- Facilitates trade for approved importer, exporters, carriers and others in the supply chain as they are recognized as low risk.
- Approved companies have enhanced marketability and global competitiveness.
- By being considered low risk trusted trade companies are less likely to experience border delays due to examinations.
- Trusted trade companies can also enjoy faster access to the border and business resumption benefits in the event of border disruptions. This results in time savings, less risk for perishable goods and a more predictable border clearance.
- Trusted trade companies also reduce their risk of potential tampering with their shipments as they have had to meet various security measures to qualify for a trusted trade program.
- Trusted trade companies generally have direct contacts with specific Customs Authorities should issues arise.
- Use of logos and materials identifying trusted trade status.
How To Become A Trusted Trader
The process for accreditation as a trusted trader in any specific country generally involves completing a long and detailed assessment whereby the company must demonstrate the following:
- Compliance history with Customs
- Financial viability
- Cargo and premise security
- Trading partner security
- Secure record keeping
- On going on site validations and audits.
- Possible administrative fee.
You Can Have An Expert On Your Side
You have access to trusted and experienced brokers at Pacific Customs Brokers, who are active members in CBSA’s PIP and CBP’s C-TPAT programs. If you are interested in PIP or C-TPAT membership please contact us directly. You can be stepped through the application process by one of our trade advisory experts.