China-Switzerland AEO Mutual Recognition to be Implemented on September 1

09/01/2017

China-Switzerland Customs AEO Mutual Recognition Conference was held in Beijing on August 10. China-Switzerland Customs AEO mutual recognition agreement is China’s first inter-governmental AEO recognition agreement, and the implementation starts from September 1.

AEO is short for ‘Authorized Economic Operator’. By using international standards, customs certifies the enterprises that are creditable, compliant and have in place better security measures. Certified enterprises can enjoy facilitation in the process of customs clearance. When two customs administrations recognize each other’s AEOs, exporters can enjoy facilitation in both their home country and the country of destination, which significantly brings down clearance and logistic costs for businesses, raise their global competitiveness, and help further secure and facilitate international supply chain.

The conference was held to provide businesses with information about China-Switzerland Customs AEO mutual recognition for building a closer customs-industry partnership. Vice Minister Li Guo and Mr. Bock, Director General of FCA, gave opening speeches. AEO specialists briefed on the scope, procedures and facilitation measures of the mutual recognition agreement, and answered questions. Representatives from over 200 enterprises from 26 customs regions across China, including Beijing, Nanjing and Shanghai, along with about 100 customs officers and representatives from the Swiss Embassy in China attended the conference.

After the implementation of the AEO mutual recognition, the two customs administrations will offer 5 facilitation measures including lower inspection rate, status as secure trade partners, priority in clearance, appointment of an outreach officer and priority in clearance after recovery of trade. Furthermore, the agreement makes China’s premium manufacturing AEOs Authorized Exporters, which are allowed to make self-declaration on origin when they export to Switzerland. The enterprises, when exporting to the other country, will enjoy facilitation that can reduce inspection and clearance by time by 30%-50%, cutting port, insurance and logistic costs. From January 2016 till now, about 22300 Chinese AEOs engage in trade with Swiss businesses, among which nearly 1000 are premium AEOs, with their import and export value accounting for about 20% of the China-Switzerland total.

Switzerland is the first country on the European Continent to have signed an FTA with China. China is Switzerland’s largest trading partner in Asia and Switzerland is China’s second largest trading partner in Europe. Statistic shows that in the first half of 2017, bilateral trade reached 18.22 billion U.S. dollars, up by 18.9 percent compared to the same period last year. The goods exported to Switzerland from China mainly include labor-intensive products such as mechanical and electrical products, apparel, textile, furniture, bags and suitcases (74.4% of China’s total export to Switzerland). China mainly imported gold products, mechanical and electrical products and watches from Switzerland (95% of China’s total import from Switzerland).

Apart from Switzerland, China Customs have AEO mutual recognition with the EU, Singapore, South Korea and New Zealand, among other countries, as well as an AEO arrangement between China’s mainland and the HongKong SAR. The 33 countries (regions) China that has MRA with take up 40% of China’s export. China Customs is negotiating AEO mutual recognition agreements with its key trade partners, such as the U.S., Japan and Australia, as well as Belt and Road countries such as Russia, Kazakhstan, Malaysia, Israel and South Africa, for increasing connectivity of global supply chain and promoting trade facilitation. China Customs’ goal is that by 2020, over 80% of China’s export will be destined to countries that have MRAs with China. By then China’s highly trustworthy enterprises will be able to enjoy facilitation in all major trading countries, and thus trade will be significantly facilitated.