The global economy has been seriously affected by the coronavirus pandemic, with trade and international travel being restricted due to economic lockdowns worldwide.

Amid the ongoing battle against the economic fallout from the virus, the Korea Customs Service will hold a conference Friday to promote the authorized economic operator (AEO) program, which helps both exporters and importers carry out customs procedures swiftly.

After the Sept. 11 terrorist attacks, the World Customs Organization adopted the AEO program as a global standard to reduce the risks involved in global trading and to build a secure, transparent and predictable trading environment.

When they register in the program, businesses gain trusted trader status and receive a range of benefits, including simplified inspections and clearance procedures and exemption from customs duties.

Currently 96 nations, including the US, China and Japan, take part in the AEO program with another 169 nations considering doing so in the future. Along with free trade agreements, participation in the AEO program is often a crucial issue among global governments as AEO member nations account for 80 percent of the global trade volume.

Since South Korea first implemented the AEO program in April 2009, the number of certified domestic companies has increased to 837. Korea has also adopted AEO mutual recognition arrangements, which allow AEO-certified companies based in different countries to receive the same customs benefits as local AEO-accredited firms.

The customs agency is making efforts to expand its AEO-MRA partnerships with different nations to lower nontariff barriers and create synergy between customs agreements and other FTAs, its chief said.

To gain or renew an AEO certificate, exporters must abide strictly by local customs, trading and foreign exchange laws, and must prove financial stability. AEO-certified firms are globally recognized for their ability to handle safety issues and run trading operations.


KCS Commissioner Roh Suk-hwan addressed the following questions in an interview with The Korea Herald.

Q: What is the purpose of the upcoming AEO case study event?

A: The authorized economic operator, or AEO, system is a certification system that helps export-import companies improve their risk management and competitiveness. The 10th AEO case study event is aimed at finding companies that have benefited from the AEO system, and encouraging them to share their thoughts and ideas on it with other companies. Through the annual event, the KCS is trying to improve the AEO system and to help AEO-certified companies gain a competitive edge on the global stage.

Q: What is the difference between this year’s event and those of past years?

A: Because of the ongoing coronavirus crisis, it is difficult to hold a large-scale face-to-face conference nowadays. Therefore, only a panel of judges and the companies that will deliver presentations on AEO cases will participate in the event. Prior to the conference, the KCS conducted an online vote in which citizens were able to see how companies had utilized the AEO program in their businesses. Some of the best cases will be picked based on the vote and announced at the Friday event. The online voting event was a good opportunity to promote the AEO system to the public.

Q: Tell us how many firms have benefited from support for AEO certification. Can small and midsized companies be readily certified?

A: There are currently 837 AEO-certified companies, 516, or 62 percent, of which are SMEs. In order to expedite the adoption of the AEO system in the domestic market, the Ministry of SMEs and Startups has supported small businesses in gaining AEO certification since 2018. The customs office has also been working with state-run agencies and local governments to offer support for SMEs to receive the certificate.

Q: Trade protectionism has been emerging due in part to the coronavirus crisis. What are the customs office’s countermeasures?

A: In a bid to allow Korean companies to receive AEO-related benefits overseas, the KCS is strategically expanding AEO MRA partnerships with countries, considering the trade volume and the nontariff barriers in place. The customs office is also trying to build close relations with the customs agency of each trade partner, holding multilateral and bilateral meetings on a regular basis. The agency also helps address difficulties facing Korean companies in global markets based on such partnerships.

By Kim Young-won and Lee Kwon-hyoung (wone0102@heraldcorp.com)  (kwonhl@heraldcorp.com)