What can AEO contribute to humanitarian supply chain management?

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Laura Pujol Giménez
Director, International Association AEO, Customs and Logistics

At the International Association of Authorized Economic Operators (AEO) Customs and Logistics, we have been engaging with, and learning from, the humanitarian community about the difficulties they face in the customs and logistics operations involved in the cross-border movement of relief consignments. A key challenge for humanitarian actors in disaster situations is to identify reliable local service providers. Lack of adequate preparedness and professional competence results in delays and high costs in humanitarian assistance; at times there could be pilferages and misuses. AEO / trusted trader is a supply chain actor accredited by Customs Authorities on the bases of its low-risk profile, demonstrated compliance, and proven competence in customs procedures, as well as the adoption of baseline security measures, which in return gets benefits from Customs such as customs facilitations and simplifications. Thus, the contribution of AEO to humanitarian logistics is the possibility to identify government-accredited low risk customs and logistics service providers with mature know-how and processes, and of paramount importance in terms of local experience and networks. Export, import, transit, temporary importation and re-exportation of the goods in relief consignments through AEOs can be faster and less costly.

When we started engaging with the UN Office for the Coordination of Humanitarian Affairs (OCHA), the Association’s initial focus was on exploring one additional area of Sustainable Development Goals (SDGs) where AEOs have a contribution to make –we have been learning and communicating about AEOs role in achieving SDGs in several fora since the Associations’ first International Congress “Performance and Impact” celebrated in 2017. In 2018, the Association took part in OCHA’s training in the ASYREG platform (read more about it in Tiuna de Benito’s article in this newsletter). In February 2019, we were invited to speak at the Humanitarian Networks and Partnerships Week (HNPW) and more recently we have provided feedback on the Importation and Customs Clearance Together (IMPACCT) project and have been invited to attend the Readiness for Emergency Relief Meeting. This engagement has provided a better understanding of what the humanitarian community needs from the customs and logistics community to enable rapid humanitarian response.

Humanitarian aid meets bottlenecks in the cross-border management of relief consignments. AEO, a Customs to Business partnership, compliance and security program that enables simplified processes, can contribute to a secure and efficient humanitarian supply chain management.

On response to OCHA’s request, we have worked towards articulating what AEO brings to humanitarian logistics. As we produced the flyer “AEO: What’s in it for humanitarian logistics” and prepared to contribute at the “IMPACCT Project Expert Meeting” at the NHPW, our work required us to look into the SAFE Framework of Standards from a new perspective. We also engaged in initial consultation with some members and within our wider network of experts, many of whom hold direct experience in the provision of customs and logistics services in humanitarian emergencies. While building a normative and operational informed narrative, one of recurring messages that we came across was the idea that border clearance processes, including customs clearance times, affect humanitarian operations. As the International Federation of Red Cross and Red Crescent Societies put it during the HNPW, the bottom line resulting from barriers to international response operations is that “aid is slower, more expensive, less effective and sometimes counter-productive”

The AEO has a valuable role to play in relief supply chains. How?

First, the SAFE Framework of Standards includes requirements for AEOs to work in partnership with Customs in the implementation of the Crisis Management and Incident Recovery provisions:

“In order to minimize the impact of a disaster or terrorist incident, crisis management and recovery procedures should include advance planning and establishment of processes to operate in such extraordinary circumstances. This element requires that the AEO and Customs:

  1. develop and document, in conjunction with the appropriate authorities, where advisable or necessary, contingency plans for emergency security situations and for disaster or terrorist incident recovery;
  2. include periodic training of employees and testing of emergency contingency plans”[1].

Secure and efficient importation and customs clearance of relief goods is important in disaster management. As we are witnessing an increase of severe natural disasters, it is important that particularly AEOs, and customs and logistics service providers in general, are aware and capacitated about existing WCO instruments relevant to the cross-border movement of relief goods and their role in national plans on preparedness for Crisis Management and Incident Recovery.

Second, the SAFE Framework of Standards outlines as benefits for AEOs special measures relating to periods of trade disruption or elevated threat level:

a) Priority Customs’ processing during period of elevated threat conditions;
b) Priority treatment in post-incident resumption and trade recovery;
c) Priority in exporting to affected countries after an incident; and
d) Ability to use fall-back procedures in case of Customs IT system failure.

Third, Authorised Economic Operators can contribute to the importation and customs clearance of humanitarian consignments as competent, low-risk and secure operators, with local experience and networks

One recurring theme we have heard from humanitarian logistics experts is that when disasters strike it is key to have reliable local service providers. Humanitarian actors pay a lot on demurrage or storage fees because of lengthy import processes. Competence in the processing of goods and cargo declaration, ensuring that customs obligations (required permits, licences, tariff and duties when applicable, etc.) and any particulars for the goods as required by Customs procedures and other related authorities, are completed correctly is a must for the effectiveness of humanitarian assistance, reaching populations in need in a timely manner and saving on avoidable logistics costs.

Thus, as we look ahead, the International Association of AEO will place greater emphasis on recommendations about the use of local capacities for the provision of customs and logistics services, to communicate powerfully the relevance of identifying AEOs as trusted economic operators. Customs clearing agents and logistic operators accredited as AEOs bring in competence and low-risk profile to benefit effective humanitarian operations.

Fourth, AEOs are the first interested in effective crisis management and fast recovery that help to get back to a business continuity situation and thus contribute to the resilience of the local economies they are part of

Whether you’re an international humanitarian professional or an economic operator with local operations, you share a common interest in preparedness for Crisis Management and Incident Recovery. These are factors that are likely to significantly impact your financial condition and operating performance.

Customs and logistics service providers, at the same time as handling relief consignments, will need to remain open for normal business, thus AEO should plan and prepare to recover capacity rapidly to operate. AEO preparedness for disasters contributes both to reinforce business continuity management and contingency planning as well as to the resilience of the local economies they are part of.

Viewing humanitarian customs and logistics operations through the lens of AEOs helps the humanitarian community and national authorities identify the most relevant sector specific factors.

Finally, being trusted operators, AEOs could be provided account-based release/clearance of consignments, thus moving away from a transactional approach. This will facilitate immediate release of relief consignments to AEOs, and some of formalities and requirements could be allowed to be completed later on, thus expediting the release and delivery of relief consignments.

The gap between humanitarian needs (201.5 m people in need in 2017) and resources available (27.3 bn USD in 2017) is about 40-50%[2]. The IMPACCT project aims to stop the ripple effect of lengthy border clearance processes.

We have listened, discussed and learnt directly from humanitarian logistics professionals that humanitarian aid meets bottlenecks in the cross-border management of relief consignments. In this on-going engagement, we have conveyed that AEO, a Customs to Business partnership and compliance and security program that enables simplified processes, can contribute to a secure and efficient humanitarian supply chain management.

Based on my experience in humanitarian and development contexts, it is always meaningful to interact with the competent and committed aid professionals. The conversation with them generates very relevant and good questions and recommendations. This article tries to answer one of these questions, posed by the IMPACCT project: What can AEO contribute to humanitarian supply chain management?

AEO cooperation in this area, both with international and national relevant actors, aims to provide better customs and logistics services to the humanitarian community, and to meet the disaster-preparedness requirements in AEO national programmes in partnership with Customs Administrations. The Association is committed to continuing with the next steps of the process.

 

Note: The Author would like to thank Virginie Bohl (OCHA), Tiuna de Benito (UNCTAD), Osiris Ramirez (UNCTAD), Yolanda Porras (Ibercondor) and Nick Prior (Toyota) for their kind contribution to the flyer “AEO: What’s in it for humanitarian logistics”, specially prepared for the “IMPACCT Project Expert Meeting” held at the Humanitarian Networks and Partnerships Week (HNPW) on 4th February 2019 in Geneve. Appreciation and thanks is also expressed to Pashupati Pandey, SeniorTechnical Officer at World Customs Organisation (WCO), for providing useful input to this article.

[1] WCO (2018) SAFE FoS, ANNEX IV/14, AEO Requirements. L. Crisis Management and Incident Recovery

[2] Paul Knox-Clarke, ALNAP (2019) The State of the Humanitarian System 2018 Report.

IMPACT

If you carry out foreign trade operations with Mozambique, you will find useful to read OCHA’s Bulletin on the state of MOZAMBIQUE under the effects of Cyclone Idai. Floods Flash Update No. 9 25 March 2019

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