AEO program drives UAE’s global trade and customs competitiveness

The freshly-launched UAE Authorized Economic Operator (AEO) Program already counts more than 25 members from across various industries in the nation. The feedback so far received from the AEO member companies is encouragingly positive, labeling the economic program as being hugely impactful on their business and trade performance through the UAE.

According to the surveyed businesses, speeding up customs transactions and cutting down on trading costs for customers were among the direct benefits of the program which started operationally in the end of 2016.

The first batch of certified AEOs are expecting even more growth benefits as the program evolves to attract new members, particularly when the UAE has finalized mutual recognition arrangements (MRAs) with other program member states around the world, such as the one lately signed with South Korea.  

Jeff Foura, Logistics Director - Middle East, DOW said:  “DOW operates on a global level across multiple geographies, hence the partnership between AEO and DOW is a natural one. The global AEO program places paramount importance on safety and security at both the shipping and receiving ends, which helps DOW reinforce our safety commitments within the communities we operate in.”

Talking about the AEO partnership in the region, he added that “The Middle East is a growth region for DOW and Dubai is a major hub for our products that service our customers in the constantly expanding IMEA region. Working with Dubai customs and AEO gives us access to preferential customs services which enables us to operate more efficiently and further develop a robust supply chain for our customers.”

Mohammed Al Fayyad, Customer Care and Aftersales Director, GM MENA, said: “Being a part of this program has helped our import and export operations for vehicles and spare parts to move more efficiently and smoothly, and ultimately enables us to serve our customers better.

Commenting on the mutual AEO recognition agreements between the UAE and the AEO member states which started with South Korea, Al Fayyad added: “ As a multinational company that regularly trades with markets such as South Korea, we welcome and support moves by the government to make international trade easier such as AEO member state agreements.

“AEO certification, and the ongoing support we’ve seen from the customs authorities, has been a great benefit to our company and we look forward to this continuing.” he continued.

On its part, DHL was eager to share its positive experience as a certified AEO.

Bachi Spiga, MENA Operations Director, DHL International, said: “The immediate benefit we got from joining the AEO program is almost 50% reduction in number of suspended declarations, asking for document verification. We are able to meet the customer expectations better, with a reduced transit time because of this.”

“The declarations are getting cleared faster. And there is also a faster response on any post modification requests. No document submission after e-clearance. This is an excellent initiative, which also helps reduce usage of papers. No Archival fee, which is a direct cost benefit for the customers who ship through DHL.”

Spiga welcomed the UAE-South Korea mutual recognition agreement, noting that the AEO program is “still developing worldwide and some countries are keener than others to gain from the benefits but so far not all countries are as far down the line with the program as the UAE.  So we await further developments and the benefits with other member states.”

The DHL’s MENA Operations Director praised Dubai’s drive to be paperless and an E-Government, as a major driving force facilitating trade and confidence to move goods quickly amongst the business community.  “ I think this can only improve its position at the forefront of global business and commerce,” said Bachi Spiga.

The AEO program is a federal program that connects the UAE with the rest of the world in terms of trade and customs. It recognizes traders as trusted operators and provides them with exclusive benefits. Companies in the UAE will have certain facilities and privileges from the countries with whom MRAs will be signed. The program also offers a number of advantages to partners within the supply chain including faster, pre-arrival clearance of consignments and other preferential customs procedures.

The AEO is a voluntary program based on partnership between Customs and member traders as well as establishing strategic partnerships with other AEO programs around the world through MRAs which will facilitate global market access to AEO certified local traders. AEO certification demonstrates a company is safe to do business with, which means a strong competitive edge for the member company.

Dubai Customs has played a leading role in the implementation of the UAE Authorised Economic Operator Program, which now positions the country as a secure and compliant international trade hub. The Federal Customs Authority commissioned Dubai Customs to prepare and launch the pilot phase of the AEO program during the first half of 2016 based on the effective adoption of the WCO SAFE framework of standards.

HE Commissioner Ali Al Kaabi, Head of the Federal Customs Authority, said the AEO program is new link in the chain of systems and programs adopted by the UAE’s customs sector. It is also one of the requirements of  the WTO trade facilitation agreement, which the UAE recently ratified as the first country in the Arab world to do so.

He added that the UAE targets to sign more MRAs with 10 countries, members of the WCO’s AEO program over the next three years, with initial  focus on Indian and Chinese markets.   

"The AEO program had a major role in the UAE’s recent ranking as 1st globally in the efficiency of customs authorities index, according to the IMI’s World Competitiveness Year Book 2017,” said Al Kaabi.

Ahmed Mahboob Musabih, Director of Dubai Customs, expects that processing customs transactions through the AEO program facility will help member companies cut down on trading expenses by 25%. “We anticipate to have 50% of our customs transactions carried out through this program by 2020.”

He further pointed out: “The program would allow us effective risk management, and higher predictability in the global trade supply chain, hence making our trade security and compliance measures more productive and cost-efficient.”

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