Reduced Import Inspections and Shortened Customs Clearance Time 'Benefits'... Korea Customs Service Urges "Use AEO"

[Asia Economy (Daejeon) Reporter Jeong Il-woong] #D Company recently faced an indefinite delay in customs clearance for already exported goods due to the Indian government's lockdown order amid the spread of the novel coronavirus infection (COVID-19). However, the Korea Customs Service was able to reduce the expected loss amount of $370,000 (approximately 440 million KRW) caused by the customs clearance delay by supporting the expedited clearance of D Company's cargo through the Indian Customs Service liaison officer. This was possible because D Company was a registered AEO (Authorized Economic Operator) certified company.

On the 18th, the Korea Customs Service urged domestic export companies to actively utilize the AEO system to receive expedited customs clearance benefits overseas, as in the case of D Company.

According to the Korea Customs Service, AEO refers to companies certified by customs authorities after reviewing compliance with laws and safety management, and AEO companies can receive benefits such as expedited customs clearance overseas.

Under the AEO MRA (AEO Mutual Recognition Arrangement), AEO companies recognized in their home country can receive customs procedure benefits mutually agreed upon by the counterpart country.

Currently, South Korea has signed MRAs with 22 countries including the United States and China, making it one of the countries with the most AEO MRAs worldwide. Furthermore, the Korea Customs Service plans to gradually expand the number of countries with MRAs, including Russia and Vietnam. This means the range of countries where domestic AEO companies can receive benefits overseas will broaden.

For example, when an AEO company exports goods to an MRA partner country, the local import inspection rate is relaxed, and various customs clearance benefits such as priority clearance increase.

In fact, an analysis by the Korea Customs Service of inspection rates and customs clearance times in MRA partner countries showed that last year, the inspection rate for AEO companies was on average 78.4% lower than that of non-AEO companies, and the customs clearance time was on average 83.7% shorter than that of non-AEO companies.

A Korea Customs Service official said, “By utilizing the AEO system, companies can reduce logistics costs and enjoy the advantage of smooth export and import through expedited customs clearance,” adding, “We hope companies interested in obtaining AEO certification or those facing difficulties in export-import customs clearance actively seek support through regional customs offices.”