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Guide to Customs Administration

Mutual Recognition Arrangement(MRA)

컨텐츠서비스메뉴

What is an AEO Mutual Recognition Arrangement?

An AEO Mutual Recognition Arrangement (AEO MRA) means that each of the countries signing it accepts its counterpart country’s as equal to its own AEO system. In other words, if a mutual recognition arrangement is concluded between two countries implementing the AEO system, each such country’s AEO companies receive the same benefits from its counterpart country’s customs authorities as they receive from their own country’s customs authorities. Although the AEO system is based on the WCO SAFE Framework, since the Framework is not legally binding, each country introduces the AEO system in such a way as to make it suitable for its actual circumstances. Accordingly, different countries have more or less different AEO systems. As a result, difficulties arise in that in order to receive benefits related to customs clearance in a foreign country with which they trade, export and/or import-related companies have to joint the country’s AEO system even if they have obtained the AEO authorization in their own country or countries. Therefore, MRAs were developed in order to connect the AEO systems implemented by the customs authorities of different countries.

What are the effects of an AEO MRA?

First, reducing export and import costs

Once a mutual recognition arrangement (MRA) is concluded between Korea and a foreign country, the reliability and security of Korean AEO companies are internationally recognized on a reciprocal basis and thus they can receive special treatment in the customs clearance procedures of Korea’s counterpart country. Accordingly, they can secure the swiftness, security and predictability of delivery of goods, prevent any overlapping audit due to the counterpart country’s AEO system and save unnecessary regulatory costs during export or import clearance procedures.

Second, maintaining and securing business partners

As countries have introduced the AEO system which requires business partner management, nowadays overseas business partners are asking Korean companies to obtain an AEO status or meet the AEO authorization criteria. In this new trade environment, AEO-certified companies can enhance their export comprehensiveness by preoccupying a favorable position in terms of maintaining their business partners and securing new business partners.

Third, on-site audit exemption granted by foreign customs authorities to business partners

AEO MRAs can prevent our valuable resources such as Korean companies’ technologies, facilities and business information from being directly exposed to foreign customs authorities through on-site audits on overseas business partners by foreign customs authorities.

What are the requirements and procedures for an AEO MRA?

  • In order to push ahead with mutual recognition between countries, it is necessary to meet the following requirements:
    • Agreed standards stating clear actions for the Customs and AEOs
    • Application of the same standards in order to make one country’s Customs trust the AEO authorization granted by its counterpart country’s customs authorities
    • Compliance with the standards of any other agency in case the AEO authorization procedures have been entrusted to such agency by the customs authorities
    • Preparation of a legal basis for making the implementation of mutual recognition possible
  • Since mutual recognition of AEOs between countries requires a lot of time, the World Customs Organization (WCO) recommends a “phased approach.” Therefore, although countries have slightly different procedures for pushing ahead with MRAs depending on their policies and circumstances, general procedures are as follows:
    • Phase 1: Side-by-side comparison of the AEO authorization criteria between two countries
    • Phase 2: Mutual visits and actual joint AEO authorization inspections
    • Phase 3: Discussion of operational procedures including benefits and information sharing among
                   AEO-certified companies
    • Phase 4: Signature by both countries’ heads of Customs
    However, the AEO system of each country is studied in order to ascertain the requirements for mutual recognition as a prior step before pursuing negotiation for mutual recognition and then the counterpart country’s willingness to pursue mutual recognition is sounded out.
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