In attempts to secure the global supply chain of the United States after the 9/11 attacks, the country took steps to safeguard all shipments entering the border of the US from weapons of mass destruction.

One of the steps taken was to establish CTPAT or Customs Trade Partnership Against Terrorism.

It is a voluntary program in which every entity in the import supply chain participating must cooperate with the US CBP to instate security in all steps of operations.

CTPAT is the program of Authorized Economic Operators (AEO) in the United States.

Meaning of AEO

The AEO or Authorized Economic Operator program is a voluntary initiative that aims to enhance supply chain security and facilitate trade by providing a trusted status to businesses that can demonstrate that they meet certain criteria.

In the United States, the authorized economic operator (AEO) program is administered by the US Customs and Border Protection (CBP) agency and operates under the program of CTPAT.

Importance of AEO

Obtaining AEO status in the US can have a number of benefits for businesses, including:

  • Reduced risk of customs delays or disruptions
  • Fewer physical and document-based customs controls
  • Priority processing during the customs clearance
  • Reduced risk of being selected for audits or verifications
  • Recognition in various countries participating in the World Customs Organization's Secure Trade Partnership (STP) program and the benefits of the same in other countries

Process of AEO

The process for obtaining AEO status in the US generally involves the following steps:

Step 1 - Companies review the minimum security criteria of the CTPAT to determine their eligibility for the AEO program.

Step 2- Companies submit an application via the CTPAT portal and accept to participate voluntarily.

Step 3 - Companies fulfil a profile of supply chain security, which explains how the company is meeting the minimum security criteria of the CTPAT. The company should conduct a risk assessment before this step.

Validity of AEO Certification

The re-validity of AEO certification in the USA takes place every four years. However, a CTPAT validation is conducted between two to twelve months after the company receives its CTPAT certificate in the initial stage.

Security Improvement by AEO

The authorized economic operator (AEO) program is designed to enhance supply chain security and facilitate trade by providing a trusted status to businesses that can demonstrate that they meet certain security standards, financial solvency, and compliance with customs regulations.

By working with trusted companies that meet these standards, customs authorities can better protect their borders and reduce the risk of smuggling, counterfeiting, and other illicit activities.

Obtaining AEO status can help businesses to improve their security practices and procedures, as they must meet certain criteria related to security and compliance to qualify for the program.

This may include implementing security plans, risk assessments, employee background checks, and secure transportation and storage practices.

Overall, the AEO program can help enhance security in the international supply chain by identifying and working with trusted businesses that have strong security practices.

This can help to protect against the risk of terrorism and other security threats and ensure the integrity and quality of the products that are traded internationally.