Association, Inc.

Issue No. 3, 2011

Japan and the EU begin mutual recognition of the AEO system

Japan and the EU customs authorities have implemented, effective as of 24 May 2011,
mutual recognition of the AEO (Authorised Economic Operator) system, permitting
simplification of customs procedures for enterprises recognised as trustworthy trading
entities which have made serious efforts to achieve supply chain security. Under this
system, customs procedures are simplified and harmonised, allowing reduced scrutiny of
documentation and abbreviated tax returns, for example, and leading to the likelihood of
increased trade between Japan and the EU.

Japan began using the AEO system in March 2006, and the EU enforced in January 2008.
AEO applies to companies which have high standards of legal compliance and are in good
financial standing. In Japan, a total of 370 companies, including JAMA members, are AEO-

By establishing equivalence between Japan and the EU, the EU’s AEO-approved
companies will receive the same benefits from Japan’s customs authorities as Japan’s AEO-
approved companies. Similarly, the EU will apply the same treatment to Japan’s AEO-
approved companies. In practical terms, customs procedures for both EU and Japan’s
AEO-approved importers and exporters will be simplified by the issuance of a special code
number by customs authorities, which can be entered into electronic customs forms.

Japan and the EU signed an agreement on mutual AEO recognition in June 2010, but
it took almost a year to get to the point of implementation. There are as many as 1,500
AEO-approved companies in the EU, and since the conditions applying in each country are
different, it was first necessary to confirm procedures in each of the EU Member States.

The start of mutual recognition should give a boost both to European firms exporting to the
Japanese market, and to Japanese firms exporting to Europe.

Japan has already implemented mutual recognition of the AEO system with New Zealand,
the US and Singapore, making the EU the fourth such undertaking. Japan has also agreed
to have the same sort of arrangement with Canada and South Korea, and currently is
engaged in similar discussions with China and Malaysia.

JAMA supports these proactive moves by the European Commission and Japanese
government to expand and harmonise trade globally, and welcomes the deepening of the
cooperative relationship with the EU in advancing bilateral Japan-EU trade.

A note on the AEO system:
The AEO system significantly shortens import and export procedures for enterprises
recognised by their governments as having achieved specific standards of legal compliance,
internal controls, etc. In practice, the AEO system will help expand the number of
companies that export and import goods without having to undergo checks or inspections.

For more information on the mutual recognition by the EU and Japan of the AEO system,
please consult the following links: