The United States and the European Union are now collabroating in an effort to increase the safety and efficiency of international shipments. The two parties have implemented a mutual recognition arrangement for their respective supply chain security programs. The equivalent to the CTPAT in the European Union is known as the Authorized Economic Operator Program. This program is what will allow the EU to enforce this agreement. The implementation of the new bilateral agreement will allow:
- US importers authorized under CTPAT to be considered secure
- exports to receive a lower-risk score by the customs administrations of EU member states; and
- time and money savings.
This program creates an improved supply chain that is secure. The agreement allows importers and exporters to shorten shipping and processing times due to the fewer security related inspections and controls that they are subjected to. The benefits received by both parties are reciprocal when exporting into each others jurisdiction.
However, the agreement contains some exceptions. For instance, only tier 2 and 3 CTPAT importers qualify for full AEO benefits. Additionally, they are also the only importers that may receive lower risk-assesment scores, and consequently, undergo fewer inspections when exporting to an EU member state. Also, CTPAT members must expressly elect for the United States to share certain information with the European Union and certify that their exports meet all applicable requirements. Finally, the mutual recognition agreement will only apply to those CTPAT importers that are also exporters.
The EU and the US have also recently discussed the possibility of a free trade agreement. The mutual recognition agreement will facilitate trade and allow companies to immediately participate regardless of the status of the EU free trade agreement.