CUSTOMS-BUSINESS PARTNERHIP IN THAI CUSTOMS
5.2 CBP Arrangements and Mechanisms
5.2.4 Compliance and AEO Programs
5.2.4.1 Licensed Customs Broker Scheme
A customs broker, who is a professional in customs procedures and has taken good care of importers and exporters in terms of accurate payment of taxes and duties, is eligible to be a licensed customs broker. Such brokers are normally granted various incentives, for example, processing cargo clearance via the Green Line, receiving tax compensation and refunds within one day, inspection of goods below half the normal inspection rate for imports, and exemption from cargo inspection for exports.
The customs brokerage practice in Thailand is different from that in China Customs. In China Customs, to make sure that customs brokerage maintains a sound level of professionalism, a Customs Broker Qualification Test is organized annually by China Customs. Only those that successfully pass the test and register themselves at customs brokerage agencies are entitled to work as customs brokers. In Thai Customs, there is no such test, but the process of licensing serves the purpose of quality control of customs brokers.
From October 2013, this program gradually was phased into the AEO program designed by Thai Customs. Like the CME program in China Customs, Thai Customs decided to integrate and reorganize the existing customs compliance programs into the single AEO program by following the WCO’s principles and standards.
5.2.4.2 Gold Card Scheme
According to the WCO’s categorization, the Gold Card Scheme can be thought as a compliance program26 and a predecessor of the AEO program. An importer or exporter that has exhibited good compliance with customs for at least three years and possesses other qualifications as specified by customs can apply for the Gold Card Scheme. As the name indicates, the rationale was borrowed from commercial practices like those innovative services in banks, where customers with high credit and financial propensity would be recognized as high-quality customers and be issued a “gold card” and receive special privileges from bank services.
This scheme, first launched in 2005, aims to provide expedited cargo clearance for importers and exporters. Under this scheme, the importers and exporters are eligible for processing cargo clearance via the Green Line, exemption of cargo inspection (except for risk management selections), and tax and duty refunds at the time of submitting a Refund Application Form.
As with the Licensed Customs Broker Scheme, the Gold Card Scheme was merged into the AEO program in October 2013 in Thai Customs.
5.2.4.3 Authorized Economic Operator (AEO) Program
Thai Customs is committed to implementing the WCO SAFE Framework of Standards in 2005 and a national AEO program has been developed based on the WCO standards and guidelines from 2007. The distinction between the new AEO program and the Licensed Customs Broker Scheme and the Gold Card Scheme lies in the new requirements on international supply chain security. Early in
26By “compliance program”, the WCO refers to the “authorized trader”
program which focuses on the performance of a company on complying with Customs-related laws and regulations. Criteria on supply chain security have not been counted on.
2008, an AEO working group, under the direct leadership of then Director-General of Thai Customs, was established to conduct a feasibility study. Subsequently, the national AEO Program was launched in 2008 and became fully implemented in 2010.
During the pilot period, only two companies were certified by Thai Customs. From 2010, the program entered into full implementation. The national AEO program is based on the WCO standards and guidance. During the first stage, the project covered only exporters. However, having worked with the industry under the AEO Pilot Project, Thai Customs found that it was necessary to review and revise the program to encompass more eligible parties. Subsequently, the program has been expanded to cover importers and customs brokers as well from 2012. By August 2014, 204 companies had been granted AEO status, including 99 customs brokers and 105 importers and exporters (statistics provided by Ms. Sureeporn Wilawan, Section Chief of AEO Unit, Thai Customs).
For the future, Thai Customs conceives that partners eligible for AEO will be expanded to various types of operators such as carriers, consolidators, intermediaries, ports, airports, terminal operators, integrated operators, and warehouses and distributors.
To promote the program among business, Thai Customs, following commercial practice, designed a logo, in which the symbols of the Thai national flags and a globe are merged to reflect that the mission of the AEO program is to help Thai exporters and importers gain competitiveness in the international supply chain, as Ms Sureeporn Wilawan, team leader of the AEO working group in Thai Customs stated:
While dealing with business, we need to work business-like. A small logo may be helpful to promote this program domestically and internationally as we see Japan, Korea and Singapore have designed logos respectively. (Ms. Sureeporn Wilawan, 2014)
Figures 5.1 Logo of the AEO Program of Thai Customs
Source: Official Website of Thai Customs (www.customs.go.th)
To apply for the national AEO Program, a company should adhere to the following steps:
For the first step, the company should submit the following documents to the competent AEO Office, which was established in 2012 by Thai Customs:
1) Application form for the national AEO Program;
2) Juristic person certificate issued by the Department of Business Development;
3) Financial statement for the past 2 consecutive years in the case of importers and exporters and for the past 3 consecutive years in the case of customs brokers;
4) Site plan with details of security measures conducted; and 5) Other supporting documents, e.g. VAT registration, a list of shareholders from the Department of Business Development, etc.
For the second step, after the submission of the relevant documents, Thai Customs will conduct an on-site validation to assess the company’s application and eligibility. The on-site assessment result determines whether the company qualifies for the national AEO Program.
From the perspective of organizational study, this validation is meaningful for enhancing the mutual understanding and interconnectedness between customs and the company. Traditionally, custom administration and enforcement were based on transactions; customs did not penetrate into the internal systems on trade or the customs compliance of a company. The substantive impact of AEO implementation is that Thai Customs is actually encouraging and guiding the company to establish, maintain, and improve a systematic internal system based on
specific standards. Meanwhile, by physically visiting the company and checking the actual situation, Thai Customs can also gain an up-to-date and deep understanding of business operations and their needs, which serves a sound basis for designing responsive services.