Сonceptualization of the Authorized Economic Operator: international experience and prospects of its implementation in the Customs legislation of Ukraine

Abstract

Increasing the level of economic and political instability in the world makes it necessary to reform the rules of international trade in order to enhance national security by seeking an optimal balance between the level of control at the border and trade facilitation. In particular, the increase in the terrorist threat in the world involves the need to revise the terms of engagement of all participants in the international trade supply chain, highlighting the need for maximum control over the movement of goods in the process of foreign trade activities in terms of minimum regulatory authorities’ intervention in the activities of economic operators. It should be noted that the international trade supply chain includes all the stages within the cross-border movement of goods from a departure point to a final destination. The authors of the article have noted the high relevance of these issues for Ukraine, since it is evidenced by the World Bank Trading Across Borders data. The article studies the international experience to ensure the security of international supply chain, which is possible only if all the participants of the international trade transaction follow the standards of cargoes safe handling. This resulted in the necessity to develop and introduce in the international conventions, agreements and national legislations the “authorized persons” concept, which was formalized in the World Customs Organization (further – WCO) concept as an Authorized Economic Operators (further – AEO). The authors have pointed out that the conceptual foundations of the AEO functioning were identified by the International Convention on the Harmonization and Simplification of Customs Procedures (the Revised Kyoto Convention), which provides for the possibility of introducing special simplifications for authorized persons. In addition, it is noted that the details of the AEO implementation and operation are specified by the WCO Framework of Standards to Secure and Facilitate International Trade, which updated version includes the issue of Customs cooperation with other governmental and intergovernmental institutions (Pillar 3 – Customs to Other Government and Inter-government agencies) to promote closer cooperation between Customs authorities and other public bodies as well as ensuring an effective and efficient government response to the challenges of supply chain security. The authors have analyzed the current European legislation governing the AEO functioning in the European Union (further – EU), namely in the introductory part of the EU Customs Code (EC Regulation 952/2013, which entered into force on 1 May 2016) it is determined that compliant and trustworthy economic operators may have the status of “AEO” when granting them permission for swifter customs procedures or for safety and security simplifications or their combination. Depending on the type of an authorization granted, AEOs should take a maximum advantage of customs simplifications or use simplifications regarding safety and security. At the same time, they receive more favorable treatment in relation to physical and documentary customs controls. Furthermore, the authors have studied the advantages of every AEO certificate type. In conclusion the authors have considered the discussion process of the draft Law of Ukraine “On Amendments to the Customs Code of Ukraine (concerning the authorized economic operator and the simplification of customs procedures)”, developed by the Ministry of Finance of Ukraine, the State Fiscal Service of Ukraine together with a number of experts and public organizations for the purpose of the AEO practical implementation and making the domestic customs legislation compliant with the EU standards in accordance with the Ukraine–European Union Association Agreement.