1 / 12

October 2019

Korean AEO Program. October 2019. AEO Program Profile. 1. 1. AEO program provides clearance benefits for those involved in global supply chains who have met security requirements. KCS. Trusted, reliable companies. Bonded transporter. CRITERIA. Sea carrier. Freight forwarder. →.

diella
Download Presentation

October 2019

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Korean AEO Program October 2019

  2. AEO Program Profile 1 1 AEO program provides clearance benefits for those involved in global supply chains who have met security requirements. KCS Trusted, reliable companies Bonded transporter CRITERIA Sea carrier Freight forwarder → • Fast clearance • Reduced inspection rate • Customs partner broker Partnership Voluntary air carrier Bonded warehouse operator AEO <Certificate> importer Terminal operator exporter Trade compliance + Secure Supply Chain Trade facilitation Speedier, more secure Customs clearance Risk management based on companies Broader Customs Territory Holistic approach to cargo management

  3. Progress AEO Program inKorea 2 2 Since official launch of AEO program in 2009, Korean AEO program has broaden and deepened, with more MRA being signed. • Legal Basis(Jan 2008) • Article255.2 of Customs Act • Pilot program(Oct 2008) • Samsung Electronics and other 10 pilot companies • Program in full swing (Apr2009) • Enforcement Decree and Enforcement Rule • Signed MRA (2010, 2011) • with US, Canada, Singapore, Japan, • New Zealand • Commissioned Documentary requirement check • (Sep 2010) • GlobalAEO Conference(Apr12) • Monitoring AEO status, like self-assessment, etc • More MRA partners • China (‘13), HK, TK(‘14) • Israel(’15), Thailand(‘16) • …… Expanded (‘10~’11) Matured (‘12~) Launched (~’09)

  4. Up-to-date Figures and Ratio on Korea AEOs(As of Jun 2019) 3 3 Type of AEOs includes im/exporters, brokers, bonded transporter, freight forwarder, warehouse operator, sea carrier, air carrier, ground handler. As of Jun 2019, Korea certifies as AEO 832 entities in aggregate. Up-to-date number of AEOs • Up-to-date number of AEOs (unit: entity, accumulated) 12% 832 815 50% 700 37% 728 600 624 533 500 400 2013 2014 2015 2016 2019.6

  5. Features of Korea AEO program 4 4 ①Two-track Customs Audit on AEOs and non-AEOs AEO • VS Non-AEO Comprehensive Audit Informed Compliance Special Audit Enforced Compliance • Higher compliance based on customs-to-business partnership • Consulting service • Periodic check • Different • Features • Under direct, enforceable Customs Control • Penalties and sanctions imposed • Enforced Audit • Reduced or non-inspection • Customs clearance without bond, Monthly duty payment • Import tax invoice issued • Benefit • No Benefits Self Management Direct Customs Control

  6. Features of Korean AEO program 4 4 ②Customs assigns account manager to inform AEOs of what they should know about dealing with trade law, which leads AEOs to voluntarily fulfill ‘informed compliance’ responsibility Customs Partnership AEO Account Manager • Informed • Compliance Trade related matters, consulting service • Account Manager • Dedicated Customs Officer helps AEOs to increase law compliance and enhance their internal control system

  7. AEO Benefits 5 5 ①AEOs enjoy speedier, streamlined clearance benefits, (figuratively likened to dedicated bus lane) thereby reducing trade cost BENEFITS Reduced Inspection rate Priority inspection Simplified customs procedure Reduced Trade Cost AEO Non-AEO

  8. AEO Benefits 5 5 ②Audit exempted, reduced inspection rate, etc (different depending on AEO Grade) GRADE • Financial Solvency+ Security Management+ Internal Control system with 80 points or more • A : 80 points or more in law compliance score • AA : 90 points or more in law compliance score • AAA : 95 points or more in law compliance + Best Practices VALIDITY PERIOD • 5 YEARS • BENEFIT • Exemption from Customs audit, foreign currency transaction audit • Im/export declaration via ERP system, e-clearance audit • Reduced inspection rate or priority inspection when selected for inspection • Monthly duty payment, reduced payment in penalties/noticed disposition • Prolonged licensing period, relaxed periodic check, package declaration of bonded transport • Speedier Immigration clearance via fast track, CIP lounge available

  9. AEO Criteria 6 6 To validate AEO applicant, 4 major criteria and 60-80 sub-criteria apply. Law Compliance Internal Control System Financial Solvency Security Management 1. CEO will , Organization and Budget 1. Biz partner Mgmt 1. Disqualification 1. Audit report 2. Containers and Trailers 2. False Declaration 2. Cooperation with Customs 2. Credit ratings 3. Access Control 3. Violation of Regulation 3. Records Mgmt 4. Personnel Mgmt 4. Law Compliance 4. Manual on Customs - related Affairs 5. Procedural Mgmt 5. Management and Improvement of Risk Factors 6. Facilities and Equipment 6. Information Sharing 7. IT Mgmt 13. Integrity Maintenance 8. Education and Training Korea takes into account criteria of WCO, EU AEO, C-TPAT* for mutual recognition

  10. Status of bilateral AEO MRAs: MRAs of Korea 7 7 Key Point Korea’s MRA Partners : 20 economies USA(‘10) Canada(‘10) Singapore(‘10) Japan(‘11) New Zealand(‘11) China(‘13) Hong Kong(‘14) Mexico(‘14) Turkey(‘14) Israel(‘15) Dominican Republic(‘15) India(‘15) Taiwan(‘15) Thailand(’16) Australia(‘17) UAE (‘17) Malaysia(‘17) Peru (‘17) Uruguay(‘17) Kazakhstan(‘19

  11. Measuring & Monetizing MRA benefits by KCS 8 8 Key Point 357.7 million US dollars(for 300 im/exporters in 2018) < Importers > < Exporters > Direct Impact: faster clearance - the number of exempted cargo physical inspection x daily warehouse fee Direct Impact: lower inspection fee in overseas customs territory - the number of exportation x reduced inspection rate x inspection fee + + Direct Impact: Duty payment - Issuance of revised tax invoice - Reduced guarantee insurance of tax payment Direct Impact: -Non-AEO importers abroad enjoy benefits without any cost incurred, arising from AEO exporters paying to obtain and maintain AEO status(paid money estimated against overseas price ) + + Unmeasured impact - streamlined procedure in entry into/from bonded factory and in claiming drawback, etc. Indirect impact -rising operating profit due to increased export; less dwell-time in customs clearance facilitates more trade, thereby driving up operating profits.

  12. Thank you

More Related