China Signs AEO Mutual Recognition Agreement with Japan

Takehome: The AEO mutual recognition agreement will significantly promote trade between China and Japan. AEO enterprises are eligible for preferential customs clearance measures.

On Oct. 26, 2018, China GAC and Japan Customs bureau officially signed “Agreement on Mutual Recognition between Chinese Enterprise Credibility Management System and Japanese Authorized Economic Operator System”. According to this agreement, AEO enterprises in China and Japan can enjoy the following 4 trade facilitation measures: 1. Lower rate of being inspected; in China the inspection rate for AEO enterprises is 0.5%. 2. Cargo inspection will be finished as soon as possible. 3. A customs official will be specially assigned to AEO enterprise to deal with problems occurring during customs clearance. 4. AEO enterprises from the country/region that China has signed mutual recognition agreement with will be subject to priority customs clearance.

AEO, which is short for Authorized Economic Operator, is a kind of authorization to enterprises which have a demonstrated history of safety, compliance, quality during trade. AEO certified enterprises are eligible for preferential customs clearance measures.

Up to now, China has signed AEO mutual recognition agreements with 36 countries/regions, including Singapore, Korea, Hong Kong, Europe Union, Australia, New Zealand and Japan. China aims to further promote AEO mutual recognition with its "one belt and one road" project and is now negotiating agreements with Thailand, Russia, Canada, Mexico and etc.

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