The Authorised Economic Operator (AEO) programme was introduced by the SA Revenue Service (Sars) in November 2020, replacing the Preferred Trader programme.
It has recently gained momentum in both the number of accredited traders and in the number of Mutual Recognition Arrangements (MRAs) which have been signed with other countries.
An AEO-accredited company is one that is involved in international trade and approved by Sars as complying with the World Customs Organization (WCO) compliance and security standards.
Sars introduced two levels of accreditation with benefits assigned to each level for clients trading in the regional as well as international markets.
While Mutual Administrative Assistance agreements are international binding treaties on customs at a country level, MRAs are customs-to-customs interagency agreements that enable administrations to share information, provide each other with technical assistance, enable joint surveillance and investigations, and allow co-operation with each other to enhance operations efficiency.
MRAs further provide a platform for customs administrations to mutually recognize each other’s AEO programmes and their status.
They ensure that AEO programmes remain compatible and provide agreed facilitative treatment for each other’s AEO on a reciprocal basis and allow signatories to share AEO-related information.
Currently, Sars has signed MRAs with the relevant authorities in China, Uganda, SACU, Zambia, Hong Kong, India, United Kingdom and Northern Ireland, the United States and Brazil.
Prior to signing the MRAs, Sars hosted customs delegations from Hong Kong and the USA and were co-hosted by Level 2 accredited traders.
Why are MRAs important to South Africa?
Firstly, it is important for SA to know that a trading partner with an AEO programme has the same level of accreditation and that accredited business partners also have the same level of compliance.
The MRAs ensure that levels of accreditation are maintained in line with international standards. Secondly, it is vital for international trade that the levels of compliance are maintained once a trader is accredited.
In this regard, the private sector has been informed that Sars has removed more than 100 accredited clients from the AEO programme due to continuous non-compliance, and although seen as a negative statistic, it strengthens Sars’s standing internationally as it confirms that non-compliance will not be tolerated.
Thirdly, by having MRAs in place, Sars has visibility of possible non-compliance before goods enter South Africa and the same applies to goods leaving our shores.
If, as an example, non-compliant goods arrive in Hong Kong from an AEO-accredited exporter, Sars can be informed and take necessary action.
Finally, countries having AEO MRAs in place, form a community within which information and technical assistance can be shared.
The Sars AEO programme has achieved its current status in a relatively short period of time compared with many other countries, and this has been recognized worldwide, placing South Africa at the forefront of AEO technological advances.
Sars is, most likely, already negotiating MRAs with many of its counterpart countries, and it is therefore strongly recommended that traders become accredited. Although currently a voluntary programme, AEO accreditation should be seen as a ‘must’ rather than a ‘maybe’.
