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New AEO trade initiative set to draw more players to Cambodia

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Containers seen at the Phnom Penh Autonomous Port. Cambodia’s international trade volume hit $15.161 billion in the first four months of the year, falling by 14.10 per cent year-on-year. Heng Chivoan

New AEO trade initiative set to draw more players to Cambodia

Cambodia's new AEO (authorised economic operator) programme – and implementation thereof by Customs (GDCE) – will make life more convenient for investors and support initiatives to attract additional players to the Cambodian market, observers have claimed.

The GDCE late last month said in a notice that the AEO programme would be rolled out on May 1, in a bid to ensure Cambodia’s compliance with the World Trade Organisation (WTO) Trade Facilitation Agreement (TFA), as well as to bring the local business community into conformity with the Kingdom’s international trade policy.

The World Customs Organisation (WCO) defines an AEO 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 WCO or equivalent supply chain security standards”.

The WCO describes AEO programmes as instruments to “both secure and facilitate global trade, by providing incentives/benefits to both Customs and traders that have decided to work in partnership to improve supply chain security”.

“Trade facilitation” is the general term for the overall framework of measures aimed at removing legal and technical obstacles across the full spectrum of border procedures to help make the international movement of imports and exports cheaper, easier, faster and more efficient and predictable, while safeguarding safety, security, health and other legitimate regulatory goals.

Similarly, the GDCE notice presents the Cambodian AEO programme as a partnership between the department and the private sector to facilitate trade and improve supply-chain security and safety.

A “supply chain” refers to an entire system of all the individuals, organisations, resources, technologies and processes involved in the creation, distribution and sale of a product or service, from the initial stage of sourcing or extracting raw materials to the final delivery to end-users.

The notice affirmed that benefits and incentives arising from the programme would include those linked to Mutual Recognition Agreements (MRA) with partner countries, as well as cover customs procedures and formalities.

A “Mutual Recognition Agreement” is an arrangement between two jurisdictions that allow for – in part or in whole – mutual reliance on certain aspects of one another’s regulatory frameworks and procedures.

The GDCE also issued a public invitation to take part in the AEO programme.

Cambodia Chamber of Commerce (CCC) vice-president Lim Heng commented to The Post on May 17 that the government’s pursuits over the past few years to modernise procedures, systems and other tools involving taxation and international trade in goods have been key in attracting local and foreign investment to the Kingdom.

He stressed that streamlining complicated procedures saves time and reduces informal costs as well, adding that major improvements in global economic growth and political stability around the world could drastically boost overseas sales of Cambodian goods, supplemented by a lot of hard work put in by public and private sector actors over the years.

“The private sector has long wanted [this programme]; it is in line with global standards in terms of customs duties and international freight forwarding. Cambodia’s international trade activity will expand as border procedures become simpler,” Heng said.

Provisional GDCE statistics show that Cambodia’s international trade volume hit $15.161 billion in the first four months of the year, falling by 14.10 per cent year-on-year.

The Kingdom’s exports and imports totalled $7.234 billion and $7.927 billion, respectively, down 4.89 per cent and down 21.07 per cent year-on-year, narrowing its trade deficit by 71.57 per cent on an annual basis to $692.796 million in the January-April period.


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