The Economic Coordination Committee (ECC) of the Cabinet has approved a summary moved by Revenue Division for implementation of Authorised Economic Operator Programme to reduce operational costs for businesses and improve Pakistan's prospects as a viable investment destination. Sources told Business Recorder here on Wednesday that the presentation was made by Muhammad Javed Ghani, Member Customs Policy, Federal Board of Revenue (FBR), to the ECC on the implementation of Authorised Economic Operator Programme as envisaged under section 212 A(1) of the Customs Act, 1969.
Javed Ghani informed the ECC that the World Customs Organisation's (WCO) Authorised Economic Operator (AEO) programme would be started in phases. He informed the ECC that the AEO programme will be a big boost in developing business confidence especially within industries in relation to imports of raw materials and machinery and exports from Pakistan. Organised and documented business enterprises may be given special and speedy clearance. In this manner, the usual complaints of delays and harassment can also be addressed. This needs to be done immediately.
He said the AEO programme is one of the pillars of the WCO's framework of standards to secure and facilitate trade (SAFE). The programme is widely acknowledged as a key driver for a solid customs-business partnership and secure, transparent and predictable trading environment.
Many developed as well as developing countries, such as Australia, New Zealand, South Korea, China, India and Brazil, have already initiated AEO programmes benefiting stakeholders along the trade supply chain. An AEO is defined by WCO SAFE framework of standards as "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 the WCO or equivalent supply chain security standards."
Accredited AEOs can enjoy several trade facilitation benefits including expedited processing and release of shipments, mutual recognition of AEO status by customs administration, financial guarantee waivers, and self-assessment. AEOs include, exporters, importers, manufactures, customs agents, carriers, ports, airports, terminal operators integrated operators, warehouses and distributors, etc, Javed Ghani said.
The FBR Member Customs Policy informed the ECC that Pakistan Customs has an important role in securing and facilitating trade supply chain. Under article 7.7, trade facilitation measures for authorised operators of the WTO's Trade Facilitation Agreement (TFA), the government of Pakistan has a category 'C' binding commitment to provide additional trade facilitation measures related to exports, imports or transit formalities and procedures to authorised operators. Implementation of a comprehensive AEO programme will, therefore, also help Pakistan in meeting its commitment under WTO's TFA. Pakistan's current rank is 136 out of 190 economies, based on World Bank's Ease of Doing Business score, making it a less attractive destination for potential investors. The government has taken several initiatives to improve trade and business environment, for example, the Customs-led National Single Window (NSW) programme, which is expected to be completed by 2022. However, further facilitation initiatives are required to reduce the cost of doing business. Javed Ghani informed the ECC that a recent study by National Confederation of Industries in Brazil indicates that the benefits provided to certify AEO companies had enabled them to save $ 1.5 billion. Companies can reinvest these savings to expand their business leading to job creation.
The government has expressed the hope that the phased implementation of AEO programme in Pakistan will substantially reduce operational costs for business, improving Pakistan's prospects as viable investment destination. It can help boost Pakistan's exports. Further, workload of customs personnel will decrease, who can, then be redeployed to other activities, the FBR Member Customs Policy maintained.
Therefore, for the purpose of launching AEO programme and in order to provide it legal underpinning, section 212 A was inserted in the Customs Act, 1969. Under this section two actions are legally required to be taken prior to the launch of the programme. Firstly, the federal government has to devise an AEO programme by notification in the official gazette. Secondly, FBR has to prescribe AEO rules, Javed Ghani, the Member Customs Policy added.
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