Objectives of the AEO Program
- Compliance with international trade agreements (WCO SAFE Framework, WCO ISCM Guidelines, Revised Kyoto Convention, WTO ATF).
- Attainment of mutual recognition status with other countries' AEO programs.
- Provide benefits and incentives to highly compliant customs stakeholders.
- Establish special customs cargo clearance lanes enhancing facilitation and security.
Definitions of Key Terms
- Detailed definitions of Airlines, Authorized Agent Banks, Authorized Economic Operator (AEO), Customs Brokers, Freight Forwarders, Importers, Exporters, NVOCC, Shipping Lines, Trade Documents, and others.
- Emphasis on AEO as entities accredited based on international standards promoting secure and seamless trade.
General Provisions: Components of the AEO Program
- Consists of Cargo Security System, Trade Clearance System, and Mutual Recognition Arrangement (MRA).
- Implementation may be phased depending on resources.
- Eligible participants include importers, exporters, customs brokers, transport operators, banks, and foreign entities accredited under MRAs.
AEO Membership Accreditation Criteria
- Applicants must demonstrate reliability, trustworthiness, business continuity, customs compliance, security infrastructure, and one year of operation.
- Requirements include licenses, no criminal liability on customs violations, and designated compliance units within the organization.
Application Processing and Approval
- Three levels of membership:
- Level 1: Basic certification, benefits include exemption from renewal, self-assessment of duties, dedicated help desk.
- Level 2: Validation of security and supply chain practices including on-site overseas assessments; benefits include dedicated processing lanes, advance clearance, periodic lodgement, exemption certificates, and expedited clearance.
- Level 3: Additional benefits for members exceeding Level 2 requirements; criteria and benefits designated by the Commissioner with Secretary of Finance approval.
- Denial of benefits or suspension possible for failure to meet criteria or false information.
- Procedures for reconsideration of adverse decisions are provided.
- Capacity building through seminars and training for personnel and stakeholders.
AEO Membership Responsibilities
- Full disclosure and confidentiality of information.
- Designation of responsible compliance offices and personnel.
- Update the Bureau on material changes affecting eligibility.
- Annual submission of "No Material Change" statement if applicable.
- Voluntary disclosure of errors with corrective proposals.
- Maintenance of comprehensive record keeping.
Suspension and Revocation of Accreditation
- Grounds include intentional violation causing significant loss, repeated non-compliance, habitual delinquency, or significant risk based on evaluations.
- Formal procedures for suspension or revocation.
- Voluntary withdrawal allowed but subject to liability for prior actions.
Organization of the AEO Office
- Head designated by Commissioner with Secretary of Finance's approval.
- Responsible for overall program implementation, information technology use, database management, and other tasks for efficient program operation.
Authority and Periodic Review
- Commissioner empowered to issue supplementary rules.
- Program reviewed every three years for amendments.
Separability and Repealing Clauses
- Unconstitutional or contrary provisions severable without affecting remainder.
- Previous Customs Administrative Order 01-2012 repealed or amended accordingly.
Effectivity
- Effective 15 days after publication.
Summary of Customs Memorandum Order No. 15-2017 on Returning Residents and OFWs
Scope and Objectives
- Implements tax and duty-free importation privileges for Returning Residents and OFWs.
- Simplified customs clearance for personal and household effects.
- Guidelines for additional exemptions for home appliances and durables up to Php 150,000.
Application Requirements
- Tax Exemption Indorsement (TEI) from Department of Finance required.
- Submission of letter-request, affidavit, bill of lading/airway bill, invoice, proof of residency or employment abroad, passport, and TIN.
Documentary Requirements and Procedures
- Accomplishment of Personal and Household Effects Declaration (PHED) Form.
- Submission of supporting documents including TEI, Import Declaration, certificates, permits, and other required papers.
- Conditional release allowed for shipments arriving before physical return upon posting 100% cash bond.
Importation of Personally-Owned Vehicles
- Vehicles must have separate documentation and are not entitled to exemptions.
Mandatory Non-Intrusive Inspection
- All shipments subject to x-ray or equivalent inspection prior to clearance to avoid delays.
Operational Procedures
- Advance submission of electronic manifest indicating "PERSONAL AND HOUSEHOLD EFFECTS".
- Filing and processing of goods declarations at Informal Entry Divisions.
- Handling of suspect x-ray images with procedures for verification and physical examination.
Treatment of Accompanied Baggage
- Subject to non-intrusive inspections unless derogatory or flagged.
- Without TEI, requires submission of documents, posting cash bond, and TEI submission within stipulated deadlines.
- Failure to comply results in forfeiture of bond or deeming goods abandoned.
Forfeiture and Refunds
- Non-submission of TEI within deadlines results in bond forfeiture; refunds governed by existing rules.
Exclusions from Exemptions
- Luxury items (unless pre-certified), vehicles, watercraft, aircraft, animals, donations, goods for barter or sale, commercial quantity goods, and regulated goods exceeding limits are excluded.
Effectivity and Repeal
- Effective immediately upon adoption.
- Repeals inconsistent earlier Customs Memorandum Orders.
This comprehensive explanation covers salient features, procedural rules, definitions, eligibility criteria, benefits, and responsibilities under the Philippine AEO Program and the related tax and duty exemption for Returning Residents and OFWs.