Authorized Economic Operator
Directorate General of Customs has announced the commencement of application to the Authorized Economic Operator Programme for companies that wish to join the voluntary programme. The Programme is in line with international trends to facilitate trade and to improve joint relations between the Directorate General of Customs and the private sector. The AEO program is aligned with the recommendations of the World Customs Organization and the World Trade Organization.
The companies with AEO membership will get several privileges related to customs clearance in Oman and the Gulf countries as well as they will be able to get benefit of the mutual privileges of all countries that implemented the programme around the world.
Definition of Authorized Economic Operator:
An AEO is “a person who, in the course of his business, is involved in activities covered by Customs legislation”, e.g.:
- Freight forwarders
- Warehouse keepers
- Customs agents
- Port operators
Qualified companies will receive a certificate from the Directorate General of Customs to enjoy the benefits and privileges of the AEO programme.
Objectives of implementing AEO in Oman:
- to profile Oman as a secure trading hub
- to help local companies gain competitive advantage
- to enhance security of global supply chains and prevent disruptions to the flow of goods
- to create awareness on the importance of adopting a total supply chain approach
- Create a reliable partnership between Directorate General of Customs and private sector.
- Adoption of the latest international standards in Trade Facilitation Agreement.
The legal framework
The AEO Programme is used to Secure and Facilitate Global Trade by the recommendations from the World Trade Organization (WTO) and the World Customs Organization (WCO). It is an internationally accredited programme which has been implemented in 80 countries in the world. WCO first introduced the AEO programme in 2005 as part of the SAFE -initiative (Standards to Secure and Facilitate Global Trade). It is a global standard of security and trade facilitation that also fits local trading environment.
The benefits and privileges of authorized economic operator:
The AEO Programme encourages the private sector to ensure the integrity of their security practices when engaging in the supply chain and it helps to optimize the management of internal assets and functions. Individual companies can streamline their operations for maximum output during the initial stage of the AEO-application.
The integration of the enhanced supply chain security and the improved business performance is a key target of the Programme. The most important benefits that will contribute to the strengthening of the national economy are, among others:
- promoting economic activities to increase foreign trade, which will again encourage the strategic sectors and support investments
- strengthening the economic competitiveness of businesses (especially small and medium-sized enterprises) in local, regional and international setting
- Harmonizing customs processes and release procedures with international standards in order to reduce the time required for release and to facilitate trade in the Sultanate.
- Increasing the level of commitment of the customers by raising awareness of their obligations.
Increasing the efficiency of process management and operations in companies.
The applicants to AEO Programme should commit to adopting a set of appropriate security measures for securing their supply chains.
Before submitting applications, they are to conduct a self-assessment on their companies’ internal policies and operational procedures against the criteria under the AEO Programme, which are in line with the requirements of the WCO SAFE Framework. It is recommended although not mandatory for companies that are interested to apply, to have the following certificates of the International Organization for Standardization (ISO):
- ISO 9001:2008 on Quality Management Systems;
- ISO 27001:2005 on Information Security Management Systems; and
- ISO 28001:2007 on Security Management Systems for the Supply Chain.
Directorate General of Customs will initiate validation process to accredit suitable companies as AEOs upon receipt of the application documents.
Requirements and Evaluation Criteria:
The Authorized Economic Operator must have an office in the Sultanate and it must exercise customs related business according to the following criteria:
- General Criteria:
There are three general criteria which are pre-requisites for acquiring the AEO status. Details of these criteria are as follows:
- Customs Compliance:
A history of good compliance with Customs requirements is of paramount importance to an AEO. An applicant thus shall have a clear record of Customs offences or other offences involving fraudulence, corruption or dishonesty in the past when submitting the applications.
- Maintenance of Commercial Records:
A responsible trader will document management decisions and business activities to sustain efficient operations and ensure accountability in the company. An applicant shall maintain verifiable commercial records up to a satisfactory level. These measures include:
- maintaining a system to keep commercial records, authorizations, licenses, permits, certificates or other relevant documents relating to the importation or exportation of goods;
- conducting internal audit on systems and records at planned intervals;
- putting in place procedures to define the controls for identification, storage, protection, retrieval, retention and disposition of the commercial records; and
- devising security measures to protect computerized record system from unauthorized access.
- Financial Soundness:
Strong financial position enables a company to withstand external risk and demonstrate resilience during global crisis. Financial soundness is an essential indicator to show an applicant’s ability in maintaining and improving the supply chain security measures. An applicant shall:
- have a good financial standing to fulfill the commitments relating to its business activities; and
- allow Customs to assess its financial status by making reference to various reports including the Director’s Report, Auditor’s Report, professional accountant’s reports, other relevant documents, etc.
- Security and Safety Criteria:
For this criterion, the Quality Management Systems (ISO 28001:2007) certificate can be used to match the requirements of Authorized Economic Operator.
- Premises Security and Access Control:
An AEO applicant shall adopt appropriate measures to secure, monitor and control its premises including the exterior and interior perimeters up to a satisfactory level. These requirements include:
- devising procedures and providing suitable training for staff to report any unauthorized access to the premises and irregularities detected;
- adopting appropriate security technologies or measures (e.g. theft alarm, CCTV monitoring system, security guards, etc.) to safeguard the premises. An applicant shall, upon request, permit Customs to gain access to relevant security monitoring systems if circumstances require.
- Cargo Security:
An applicant shall implement measures to ensure that the integrity and security of cargo, as well as the access control, are maintained at the highest appropriate level. These measures include:
- compiling security policy manual or guidelines to uphold cargo integrity;
- keeping cargo in a secure area and devising procedures to restrict and detect unauthorized access and report the same to the appropriate law enforcement agencies;
- designating qualified personnel to supervise cargo operations and handle any irregularities detected in accordance with the established procedures;
- Conveyance Security
- applicant shall take measures to ensure its conveyances are effectively secured and maintained up to a satisfactory level. These measuresinclude:
- keeping conveyances in a secure area;
- ensuring that potential places for concealment of illegal goods on conveyances are regularly inspected, and related inspection records are properly kept;
- providing security rules, procedures or guidance to conveyance operators;
- tracking and monitoring the movement of the conveyances and cargo; and
- reporting any irregularities of the conveyances to the appropriate law enforcement agencies.
- Business Partner Security:
An applicant shall put in place a mechanism to help strengthen the international supply chain security through the commitments of its business partners. The measures adopted should be up to a satisfactory level. These measures include:
- screening and selecting business partners before entering into contractual relations;
- incorporating security requirements into written contracts / agreements with business partners or requesting business partners to provide security declarations with a view to ascertaining security compliance; and
- reviewing regularly business partners’ practices to see if they are in conformity with the security requirements under contract.
- Education, Training and Awareness:
An applicant shall implement a training system to ensure that its staff are well aware of the company’s security formalities, and capable of recognizing shortfalls of security standards and taking appropriate rectification measures. The system should be operated up to a satisfactory level and include the following measures:
- providing specific security training to staff, particularly those engaging in tasks associated with the international supply chain activities;
- Ensure that staff are fully aware of safety and security measures through appropriate means of communication.
- maintaining a system to ensure that training records and guidance / handouts are properly kept.
- Educate employees about the procedures that accredited economic operators will conduct in order to identify and report suspicious incidents.
- Develop training programs to assist staff to maintain integrity of shipping procedures and to recognize the potential internal risks of Security procedures and the maintenance of control measures on entrances.
- Inform the Directorate General of Customs about internal information systems and security systems in order to assist Customs in obtaining inspection methodologies for facilities, means of transport and operations approved by AEOs.
- Information Exchange, Access and Confidentiality:
An applicant shall ensure that entrusted information is protected from misuse or unauthorized access / alteration. It is recommended to have Information Security Management Systems (ISO 27001:2005) and Security Management Systems for the Supply Chain (ISO 28001:2007). The measures include but not limited to:
- devising security policies and control measures to protect information system against unauthorized access and misuse;
- ensuring that cargo information is legible, complete and accurate, and protected from unauthorized alteration;
- appointing designated staff to identify any breaches or attempted breaches of information security;
- implementing a proper system to ensure that sensitive data are made available only to authorized staff, and documents are properly kept, transferred, and disposed of; and
- setting up backup facilities to safeguard business data against loss or accidental deletion.
- Additional Security and Safety Criteria
To acquire further benefits and privileges, an applicant should comply with two additional security and safety criteria on top of the ones mentioned above. These criteria are:
- Crisis Management and Incident Recovery
An applicant shall have a set of crisis management and recovery plan to minimize the impact created by a disaster or security incident measures including:
- putting in place a contingency plan to deal with crisis, ensure business continuity and reactivate the entire security system;
- ensuring that staff are well informed of the details of the contingency plan, and will take timely and appropriate remedial measures to respond to security threat scenarios, such as intrusion or unlawful control of an asset within the supply chain, smuggling, breach of information security or cargo integrity, etc.;
- devising procedures to timely report an incident or a risk situation to the appropriate law enforcement agencies;
- ensuring that incidents are properly investigated and analyzed to identify rooms for improvement; and
- conducting proper training and regular drills for staff to acquaint them with the contingency measures.
- Measurement, Analysis and Improvement
An applicant shall implement measures to ensure that its company’s security, safety policies and practices in place. It is advised for applicant to have ISO 28001:2007 certificate with measures and requirements include:
- appointing designated staff to assess regularly the security risks within the business ambit, and take appropriate measures to mitigate the potential risks;
- reviewing regularly the security management system including the revision of security policies and practices;
- devising a system to ensure that staff designated to conduct security and risk assessments are well acquainted with their responsibilities, and all assessment procedures and records are properly kept for inspection; and
- ensuring that recommendations adopted for enhancing the overall security management system are timely and properly implemented.
For more information, please download the following forms, and carefully fill them out and send them to the following e-mailaddress:
For more information please contact the call center: (24349000)