The Ukrainian parliament adopted in the first reading the draft law on the introduction of an institution of an authorized economic operator (AEO)

The Ukrainian parliament adopted in the first reading the draft law amending the Customs Code of Ukraine regarding certain issues of the implementation of Chapter 5 of Section IV of the Association Agreement between Ukraine, on the one hand, and the European Union, the European Atomic Energy Community and their Member States, on the other hand.

The draft was supported by 234 members of parliament and will be finalized before the second reading with consideration of amendments submitted by MPs.
"The introduction of an institution of an authorized economic operator will enable Ukraine to adopt best international practices and simplify customs procedures for responsible businesses. This will make possible for our companies involved in import and export, as well as our manufacturers who have customers in the EU market, to enhance their competitiveness," said Minister of Finance Oksana Markarova.

Why is AEO introduction important?

According to Article 84 of the Association Agreement between Ukraine and the European Union, Ukraine has undertaken to adapt its national customs legislation to the EU customs legislation. This implies, in particular, the introduction of an AEO institution in Ukraine.

The concept of AEO was introduced by the World Customs Organization in 2005 by adopting the SAFE Framework of Standards and simplifying international trade procedures.

The status of an AEO is the highest level of customs trust to the company and, therefore, the most comprehensive list of privileges and simplifications of customs formalities for the enterprise.

The draft law foresees the introduction of an effective mechanism of AEO functioning, similar to that operating in the EU, with the prospect of further mutual recognition provided for in Article 80 of the Association Agreement. Future recognition of the AEO status by the EU customs authorities will ensure the participation of Ukrainian AEOs in building the so-called safe supply chains. The adoption of this draft law in full will have a positive effect on Ukraine’s labor market, as it aims to increase the freedom of entrepreneurship, enhance competitiveness of Ukrainian enterprises and, as a result, promote the creation of new jobs.