India, Belgium and SA Team Up for AEO: SD Mazumdar, Chairman, CBEC.

NEW DELHI: Scrutiny or inspection-free trade could soon become a reality with India, Belgium and South Africa launching a pilot to connect their customs under an initiative to network customs departments across countries.

As a first step, India is rolling out a system - authorised economic operator, or AEO - under which traders, logistics providers, and customs agents sporting secure trader tag would be able to move their goods speedily through customs in countries with similar facility.

US, Japan, South Korea and China already have such a system in place and talks are on with them for a mutual recognition agreement.

"Trade facilitation is high on government's agenda and the AEO programme is one big step in this direction. With AEO system, the focus will now be on globally networked customs," SD Mazumdar, chairman, Central Board of Excise and Customs told ET.

Finance minister Pranab Mukherjee has given his go-ahead to the pilot that will serve the twin objective of improving facilitation and securing trade lines. The project is expected to start by 2012.

Networking of customs with Belgium and South Africa will give Indian industry easier access to Europe and the African continent.

The three countries had pitched for a globally networked customs programme at the World Customs Organization. Such a network facilitates exchange of information on valuation of goods, rules of origin and intellectual property rights on real-time basis, making movement of goods faster and more secure. The AEO certification acts like a green card allowing for processing of trade consignments without inspection, a finance ministry official said.

AEO status will also ensure a low risk score, that may be incorporated into customs 'risk management system' used to determine the frequency of customs physical and documentary checks. The benefits may also include simplified customs procedure and declarations.

"The objective of the AEO programme is to provide businesses with an internationally recognised quality mark that will indicate their secure role in the international supply chain and that their customs procedures are efficient and compliant," the CBEC said.

Industry agrees that this is big step forward in trade facilitation. "This is a positive move, particularly for large companies, as AEO stamp will not only facilitate imports, but also exports," said Ajay Sahai, director general, FIEO.

The World Customs Organization had in 2005 adopted the SAFE framework of standards to facilitate global trade and shield it from terrorist exploitation. It provided for authorised economic operator programme benefits, such as simplified customs procedures and reduced customs intervention.

The CBEC has unveiled a pilot scheme for which applications could be given by September 15. The apex indirect taxes body has already launched a self-assessment programme and post-clearance audit for importers as part of trade facilitation initiative.

Source : economictimes.indiatimes.com