Securing and facilitating trade in North America
From: Canada Border Services Agency
Is your business involved in international trade or the movement of goods across borders? If so, did you know:
- Authorized Economic Operator programs create partnerships between customs administrations and businesses to secure the supply chain and facilitate legitimate low-risk trade
- businesses approved as Authorized Economic Operators are examined significantly less than regular traders at the border
Authorized Economic Operator programs: North America
Authorized Economic Operator programs have been developed by customs administrations throughout North America. In Canada, the program operates under the name Partners in Protection (PIP). In the United States, it is known as Customs Trade Partnership Against Terrorism (CTPAT). And in Mexico, the program is called Authorized Economic Operator (AEO).
Program benefits
Authorized Economic Operator programs make border processes more efficient for pre-approved businesses recognized as low risk, called Authorized Economic Operators, or AEO. In addition, membership in one of these programs can facilitate trade for importers, exporters, carriers and others in their supply chains, as well as enhance marketability and global competitiveness.
By being considered low risk by customs authorities, approved AEO businesses:
- are less likely to experience border delays due to examinations
- enjoy faster access to the border and business resumption benefits in the event of border disruptions
- reduce the risk of potential tampering to their shipments by incorporating various security measures
These benefits result in time savings, less risk of spoiled perishable goods, and a more predictable border experience overall. The security measures taken by members build confidence with customs and border authorities and enhance a company's reputation and marketability.
International benefits
In addition to the benefits AEO businesses receive in their own country, partnerships are also in place with other customs administrations to extend benefits to international markets. Canada, Mexico, and the United States have established Mutual Recognition Arrangements (MRA) to recognize each other's Authorized Economic Operator programs. This enables their AEO businesses to receive border facilitation throughout North America.
Each country also has multiple MRAs with other customs administrations around the world. Work continues towards additional MRAs, which means your business could be recognized in a growing number of countries, further enhancing your company's global competitiveness.
Members who wish to benefit from these MRAs must grant their own Authorized Economic Operator program consent to share the agreed upon information. To provide consent, please follow your program's guidance.
For more information on specific program benefits for businesses, visit the customs administrations' websites.
Success stories: Member testimonials
Here are some success stories from a few Authorized Economic Operator companies.
Better planning
"Our group of companies have been a member of PIP since 2002. During the years in the program we have experienced reduced delays and inspections at the border, creating business opportunities in the way of efficient and lean inventories and better planning in regards to manufacturing. As a result of being a member of PIP, our companies were able to establish an excellent working relationship with CBSA, which proved to be very useful when dealing with trade issues. I would highly recommend any business doing or planning on doing business in Canada to be an active member in the PIP program."
Time reduction
"In order to obtain authorization as a certified company, we made considerable changes in our processes. It was a lot of work, however, the company took a huge step in terms of security. Once the Mexican Tax Administration Service visited our plant, we realized that the team effort was worth it. Today, one of our main benefits as an AEO certified company is the joint customs clearance, which enables us to reduce our delivery and border crossing times. This has resulted in remarkable savings in our operation."
Efficiency and security
"As a Fortune-500 Multinational company with brand presence in over 65 countries, it is critical for us to effectively assess and mitigate risk in our supply chain. The CTPAT program has provided us with a comprehensive world class solution to protect our people, cargo flows, and facilities, while enabling us to closely collaborate with U.S. Customs and Border Protection (CBP) to protect our homeland. Since our certification over 10 years ago, we have certified three international subsidiaries and collaborated with hundreds of business partners to share the benefits of the CTPAT certification, which include expert advice from CBP's Supply Chain Security Specialists and a number of partnership privileges to make our supply chain more efficient and secure."
PIP, CTPAT and Mexican AEO
"Many of our largest global customers are members of the same program(s) and they expect their suppliers to uphold the Trusted Trader cargo security standards, or to become directly certified in the program(s). Our membership reduces the frequency of cargo exams required to import our goods into Canada, allowing our international supply chain to be more efficient with just-in-time inventory management strategies. Our international transportation providers recognize the reduced risk and handling concerns because of our certification, which minimizes their costs to manage our logistics and customs clearance requirements. Finally, we believe it is good corporate citizenship to cooperate with national customs administrations on the topic of security."
Find out if you are eligible and learn how to apply
Businesses that demonstrate strong supply-chain security procedures and practices may be eligible to become Authorized Economic Operator companies and improve their global competitiveness.
Importers, exporters and carriers are some of the trade chain partners that are eligible to apply for program membership. Each country has its own eligibility criteria and application process. Find out if your business can apply to an Authorized Economic Operator program in Canada, the United States or Mexico.
Further information
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