Frequently Asked Questions (FAQs)
By Importing Entities for the Authorized Economic Operator System
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AEO is (by WCO definition) “a party involved in the international movement of goods in whatever function that has been approved by or on behalf of a national Customs administration as complying with WCO or equivalent supply chain security standards. Authorized Economic Operators include inter alia manufacturers, importers, exporters, brokers, carriers, consolidators, intermediaries, ports, airports, terminal operators, integrated operators, warehouses and distributors”
What is the purpose of this program?
The purpose of this program is to reward Importers who are being compliant and to encourage non-compliant importers to become compliant. The implementation of this program has global implications, in that if this AEO System is certified in Jamaica by WCO, then AEOs will receive the same benefits and privileges in all WCO member States with similar security programme once a Mutual Recognition Agreement (MRA) is signed.
What are the criteria to becoming an AEO?
Selection was done by the Risk Management Unit, criteria included breach history, audit history and results from previous pre-verification checks.
What is a validation exercise?
This is the process which verify that there is congruence between company’s policies and practices. It entails and interview, review of company policies and procedures as well as a physical walk through of the company’s offices, warehouses and factories.
Will we be removed from AEO as soon as we are in breach even if it was a genuine error?
A post incent analysis (PIA) would have to be conducted to determine the nature and extent of the breach, prior to the importer being informed in writing and the course of action to be taken. (Note that the AEO privilege may/may-not be suspended pending the PIA)
If removed from AEO list, what can I do to get back on?
Prove once more to the Agency that you have met the minimum AEO security requirements you are compliant for a period of 6 months – 1 year, as well depending on the nature and extent of the breach.
What will happen if the Importer does not have the documents that Post Audit requires?
They will be removed from the Programme. Post audit must be able to conduct verification Procedures through the examination of books and records.
What level of audit staff will be conducting the audit?
A Senior and Junior auditor will visit the importers premises in most instances.
What documents are required for audit purposes?
Third Schedule of the MOU will indicate; documents include financial statements, trial balances, general ledger, bank reconciliation statements and verification of all overseas suppliers.
What will be the frequency of the audit?
There is no set time. Customs reserves the right to visit your premises at any time, even now. Therefore documents for all shipments with relevant payment verification to suppliers should be ready at all times.
What will be the penalty if the Customs Department breaches the MOU?
Disciplinary action will be taken against the staff responsible.
Will new companies automatically be given the AEO status?
No; new companies will have to prove to the Agency that they are trustworthy Compliment with all trade regulatory bodies, meet the minimum AEO security requirements and will have to wait for a period of 18 - 24 months before they are considered.
What will Unapproved Economic Operators (UEO) have to do to become AEO?
Prove compliance on their part, keep the relevant documents required, declare and pay the correct duties and taxes
How can we guarantee that our documents will be treated confidentially?
Section 19a of the Customs Act compels all officers to keep all information as secret and confidential and breach of confidentiality comes with a $500,000 fine or Two (2) years in Prison.
How will excess and shortages be dealt with under AEO?
All discrepancies should be reported to Customs, importers are however, required to report excess goods and pay the requisite duties and taxes, They are also expected to accept the loss for shortages/short shipments.
Will I be charged with a breach if I report my discrepancies to Customs?
No you will not.
What is this MOU we are expecting to sign?
The MOU for Authorised Economic Operators (AEOs) is a document that will be signed by companies to become an Authorised Economic Operator (AEO) in order to enjoy certain privileges as a result. It also outlines the consequences that will result from breaching the contract.
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No it is not.
Are there consequences for withdrawing from the MOU?
The MOU is an understanding between Customs and Importers. If an entity decides to withdraw, then it will be taken to mean that they will not be interested in abiding by the terms of the agreement and would thus be removed from the Programme.
Will break bulk and loose cargo shipments be given AEO treatment?
Yes they will be given AEO treatment; however they will not be given SIIS status. AEOs of loose cargo and break bulk will have the benefits of having their own: Manifest Section, Examination area and customs officers.
Will site inspection still exist when the AEO System is fully implemented?
Yes it will still exist for goods of a certain nature and type.
Will the fast track broker system be eliminated when the AEO System is implemented?
The Fast Track System as it is will not remain. Customs Brokers will be categorized into Tier 1 and Tier 2 brokers based on specific requirements. AEOs will be required to use Tier 1 brokers.
Will the fast track broker system be eliminated when the AEO System is implemented?
The Fast Track System as it is will not remain. Customs Brokers will be categorized into Tier 1 and Tier 2 brokers based on specific requirements. AEOs will be required to use Tier 1 brokers.
Will the services of a customs broker be required under the AEO System?
Definitely. Only a Customs Broker can prepare and submit a C87 entry and follow through on the releasing process. That system will not change. Therefore it is imperative that AEOs get competent Customs Brokers to do the job.
