Proposal for a COUNCIL DECISION on a Union position within the EU-U.S. Joint Customs Cooperation Committee regarding mutual recognition of the Authorised Economic Operator Programme of the European Union and the Customs-Trade Partnership Against Terrorism Program of the United States
Date: 2012-01-05
Institutions: European Commission
Subjects: United States, cooperation agreement (EU), customs cooperation, international security, international trade, terrorism

EUROPEAN COMMISSION 

Brussels, 5.1.2012 
COM(2011) 937 final 

2011/0463 (NLE) 

Proposal for a 

COUNCIL DECISION 

on a Union position within the EU-U.S. Joint Customs Cooperation Committee 
regarding mutual recognition of the Authorised Economic Operator Programme of the 
European Union and the Customs-Trade Partnership Against Terrorism Program of the 
United States 

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1. 

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

EXPLANATORY MEMORANDUM 

CONTEXT OF THE PROPOSAL 

EU  legislation  on  the  Authorised  Economic  Operator  (AEO)  was  introduced  by  an 
amendment  to  the  European  Union's  Community  Customs  Code  (Regulation 
648/2005  adopted  in  April  2005).  The  objective  of  trade  partnership  programmes 
such  as  the  AEO  is  to  provide  facilitation  to  traders  which  demonstrate  compliant 
efforts to secure their part of the international supply chain. 

The AEO legislation came into force in January 2008. By October 2011 more than 
4300 EU companies had been certified for security.  

Mutual  recognition  of  trade  partnership  programmes  enhances  end-to-end  supply 
chain  security  and  facilitates  trade.  It  consolidates  internationally  the  approach 
agreed  in  the  World  Customs  Organization  (WCO)  Framework  of  Standards  to 
Secure  and  Facilitate  Trade  ('SAFE  Framework').  It  also  addresses  the  concerns  of 
the  business  community  to  avoid  proliferation  of  requirements  and  to  standardise 
customs security procedures.  

EU-U.S.  relations  in  the  area  of  customs  are  based  on  the  Agreement  on  Customs 
Cooperation  and  Mutual  Assistance  in  Customs  Matters  ('CMAA'),  signed  on  28 
May 1997. According to the CMAA, the respective customs authorities undertake to 
develop  customs  cooperation  covering  all  matters  relating  to  the  application  of 
customs legislation. 

Customs  cooperation  under  the  CMAA  was  expanded  by  the  Agreement  on 
intensifying and broadening the CMAA to include cooperation on container security 
and related matters, signed on 28 April 2004. Two expert working groups were then 
formed to focus on furthering joint efforts in security standards and comparing trade 
partnership programmes, respectively. 

In  2006,  the  EU  and  U.S.  agreed  to  assess  the  feasibility  of  establishing  mutual 
recognition of their respective trade partnership programs. 

In  2007  an  in-depth  comparison  of  both  the  U.S.  and  EU  trade  partnership 
programmes, namely the EU AEO and the U.S. Customs-Trade Partnership Against 
Terrorism (C-TPAT) programmes, was completed. A pilot program was launched in 
which the U.S. Customs and Border Protection (CBP) observed security components 
of the EU’s AEO audit process. 

Following  the  in-depth  comparison  of  the  EU  and  U.S.  trade  partnership 
programmes,  a  Roadmap  towards  mutual  recognition  was  adopted  in  March  2008, 
setting  key  performance-based  stages  required  to  reach  mutual  recognition.  In 
January 2009, an abridged version of the Roadmap was made public. 

On  25  June  2010,  the  Commission's  DG  Taxation  and  Customs  Union  ('DG 
TAXUD') and the U.S. CBP agreed on the Final Steps Towards the Implementation 
of  Mutual  Recognition  Between  the  United  States  and  the  European  Union,  setting 
down the steps necessary and the timetable for completing mutual recognition.  

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(10) 

A work programme was established in September 2010, and amended in September 
2011, covering the process of joint validation and data exchange. A total of twenty 
seven joint validation visits in the EU and four joint validation visits in the U.S. were 
completed by 4 November 2011.  

(11)  Mutual  recognition  of  the  EU  and  U.S.  trade  partnership  programmes  has  been 
highlighted as a key cooperation project by the Transatlantic Economic Council; at 
its  meeting  of  29  November  2011,  the  Transatlantic  Economic  Council  welcomed 
that the EU and the U.S. have completed the preparatory work on mutual recognition 
of their trade partnership programmes.  

2. 

(1) 

(2) 

3. 

(1) 

(2) 

(3) 

4. 

(1) 

RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND 
IMPACT ASSESSMENTS 

Member States were consulted in the framework of the Working Party on Customs 
Union of the Council of the European Union.  

There  is  no  need  for  an  impact  assessment  insofar  as  the  decision  of  the  EU-U.S. 
Joint Customs Cooperation Committee ('JCCC') implements the CMAA and does not 
modify its substance. 

LEGAL ELEMENTS OF THE PROPOSAL 

The Council is asked to adopt a Union position on a draft decision of the JCCC based 
on Article 207(4) first subparagraph, in conjunction with Article 218(9) of the Treaty 
on the Functioning of the European Union ('TFEU'). 

The legal basis for the draft decision of the JCCC is laid down in Article 22 (2) point 
(c) of the CMAA. 

The  proposal  falls  under  the  common  commercial  policy,  exclusive  competence  of 
the Union. The subsidiarity principle therefore does not apply.  

BUDGETARY IMPLICATION  

The proposal has no direct implication for the Union budget. 

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2011/0463 (NLE) 

Proposal for a 

COUNCIL DECISION 

on a Union position within the EU-U.S. Joint Customs Cooperation Committee 
regarding mutual recognition of the Authorised Economic Operator Programme of the 
European Union and the Customs-Trade Partnership Against Terrorism Program of the 
United States 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 207(4) first subparagraph, in conjunction with Article 218(9) thereof, 

Having regard to the proposal from the European Commission, 

Having consulted the European Data Protection Supervisor, 

Whereas: 

(1) 

Article 6 of the Agreement between the European Community and the United States of 
America on customs cooperation and mutual assistance in customs matters ('CMAA') 
calls on the customs authorities to develop customs cooperation of the widest possible 
scope  whereas  Article  7  recalls  the  Contracting  Parties'  commitment  to  trade 
facilitation. 

(2)  Mutual  recognition  of  trade  partnership  programmes,  namely  the  Authorised 
Economic  Operator  Programme  of  the  European  Union  and  the  Customs-Trade 
Partnership  Against  Terrorism  of  the  United  States,  enhances  supply  chain  security 
and safety as well as facilitates international trade. 

(3) 

It  is  therefore  appropriate  to  establish  mutual  recognition  of  the  trade  partnership 
programmes. 

(4)  Mutual recognition is to be established by a decision of the Joint Customs Cooperation 

Committee ('JCCC') which was set up under Article 22 of the CMAA.  

(5) 

The Union should therefore take position in the JCCC as set out in the attached draft 
decision, 

HAS ADOPTED THIS DECISION:  

The  position  to  be  taken  by  the  Union  within  the  Joint  Customs  Cooperation  Committee, 
established  by  the  Agreement  between  the  European  Community  and  the  United  States  of 

Article 1 

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America on customs cooperation and mutual assistance in customs matters, with regard to the 
mutual recognition of the Authorised Economic Operator Programme of the European Union 
and  the  Customs-Trade  Partnership  Against  Terrorism  Program  of  the  United  States,  is  that 
set out in the attached draft decision of the Joint Customs Cooperation Committee. 

Article 2 

The decision of the Joint Customs Cooperation Committee shall be published in the Official 
Journal of the European Union. 

Done at Brussels, 

For the Council 
The President 

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ANNEX  

Proposal for a 

DECISION OF THE U.S.-EU JOINT CUSTOMS COOPERATION COMMITTEE  

REGARDING MUTUAL RECOGNITION OF 

THE CUSTOMS-TRADE PARTNERSHIP AGAINST TERRORISM PROGRAM IN 
THE UNITED STATES AND THE AUTHORIZED ECONOMIC OPERATORS 
PROGRAMME OF THE EUROPEAN UNION 

The U.S.-EU Joint Customs Cooperation Committee (hereinafter referred to as the “JCCC”), 

Having regard for the Agreement between the European Community and the United States of 
America on Customs Cooperation and Mutual Assistance in Customs Matters of 28 May 1997 
(hereinafter referred to as the “CMAA”), and in particular Article 22 (2) point (c) thereof;  

Considering  the  Agreement  between  the  European  Community  and  the  United  States  of 
America  on  intensifying  and  broadening  the  CMAA  to  include  cooperation  on  container 
security and related matters concluded on 28 April 2004; 

Considering  the  need  to  further  develop  transatlantic  cooperation  and  secure  trade, 
particularly  in  accordance  with  the  World  Customs  Organisation  2011  Framework  of 
Standards  to  Secure  and  Facilitate  Global  Trade  (hereinafter  referred  to  as  the  “SAFE 
Framework”),  as  it  may  be  amended  with  the  concurrence  of  the  European  Union  and  the 
United States;  

Recognizing that the United States of America (hereinafter referred to as the “U.S.”) and the 
European  Union  (hereinafter  referred  to  as  the  “EU”)  consider  that  customs  security  and 
safety,  and  the  facilitation  of  the  international  trade  supply  chain,  can  be  significantly 
enhanced  through  mutual  recognition  of  their  respective  Trade  Partnership  Programmes 
(hereinafter  referred  to  as  the  “Trade  Partnership  Programmes”);  the  Customs-Trade 
Partnership  against  Terrorism  (hereinafter  referred  to  as  the  “C-TPAT”)  and  Authorised 
Economic Operator (hereinafter referred to as the “AEO”); 

Affirming  that  the  C-TPAT  and  AEO  programmes  operate  within  the  context  of  the  SAFE 
Framework; 

Acknowledging  that  mutual  recognition  allows  the  U.S.  and  the  EU  to  facilitate  trade  of 
operators who have invested in supply chain security and have been granted membership in 
either C-TPAT or AEO; 

Recognizing  that  examination  of  the  C-TPAT  and  AEO  programmes  revealed  that  their 
qualification standards for membership are compatible; 

Affirming  that  this  Decision  does  not  constitute  a  precedent  for  any  future  agreements  or 
arrangements between the U.S. and the EU, particularly with regard to the processing or use 
and transfer of personal data or information or data protection or privacy,  

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HAS DECIDED AS FOLLOWS: 

Section I. 

Mutual Recognition and Responsibility for Implementation 

(1) 

(2) 

The Trade Partnership Programmes of the EU and the U.S. are mutually recognised 
to be compatible and members of each programme are treated in a manner consistent 
with Section III. 

The customs authorities defined in Article 1 (b) of the CMAA (hereinafter referred to 
as “Customs Authorities”) are responsible for the implementation of this Decision. 

(3) 

The Trade Partnership Programmes concerned are:  

(a) 

the  European  Union  Authorised  Economic  Operator  (security  and  safety  or 
customs simplifications/security and safety) 

(Regulation  (EC)  No  2913/92  and  Regulation  (EC)  No  2454/93,  as  amended  by 
Regulation (EC) No 648/2005 and Title IIA of Regulation (EC) No 1875/2006); and 

(b) 

the  U.S.  Customs-Trade  Partnership  Against  Terrorism  (Tier  two  and  Tier 
three  levels)  (Security  and  Accountability  for  Every  ("SAFE")  Ports  Act  of 
2006). 

(4) 

This  Decision,  as  it  relates  to  compatibility,  reflects  the  current  structure  and 
territorial  application  of  the  C-TPAT  program  and  the  AEO  programme.  This 
Decision  does  not  take  into  consideration  future  modifications  of  each  programme 
and  expansion  of  their  respective  territorial  application.  The  Customs  Authorities 
understand  that  any  such  programme  modifications  or  expansion  of  territorial 
application may necessitate the successful completion of additional joint validations 
to the satisfaction of both Customs Authorities. 

Section II. 

Compatibility 

The Customs Authorities cooperate to maintain compatibility of the standards applied to each 
programme with respect to the following matters:  

(a) 

application process for granting membership to operators; 

(b) 

assessment of applications; and  

(c)  granting of membership and monitoring of membership status. 

The Customs Authorities have completed a work programme setting out a process of 
joint validations.  

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Section III. 

Treatment of Members 

(1) 

(2) 

(3) 

Each  Customs  Authority  treats  operators  holding  a  membership  status  under  the 
other Customs Authority’s Programme in a manner comparable to the way it treats 
members  in  its  own  Trade  Partnership  Programme,  to  the  extent  practicable  and 
possible  and  consistent  with  applicable  law  and  policy.  This  treatment  includes,  in 
particular,  taking  favourably  into  account  in  its  risk  assessment,  for  the  purpose  of 
the  conduct  of  inspections  or  controls,  the  respective  membership  status  of  an 
operator  authorised  by  the  other  Customs  Authority  in  order  to  facilitate  EU-U.S. 
trade and encourage the adoption of effective security-related measures.  

Each  Customs  Authority  may  suspend  treatment  consistent  with  Section  III  (1)  to 
members  of  the  other  Customs  Authority’s  Programme  under  this  Decision.  Such 
suspension of treatment by one Customs Authority is to be promptly communicated 
to  the  other  Customs  Authority  providing  any  additional  information  regarding  the 
basis for suspension as appropriate.  

Each  Customs  Authority  promptly  informs  the  other  Customs  Authority  in  case  it 
identifies any irregularity committed by a member authorised by the other Customs 
Authority  to  allow  it  to  take  an  informed  decision  on  the  possible  revocation  or 
suspension of the membership of the operator concerned.   

Section IV. 

Exchange of Information and Communication 

(1) 

The  Customs  Authorities  enhance  communication  in  order  to  implement  this 
Decision effectively. They exchange information and foster communication on their 
Trade Partnership Programmes in particular by: 

(a)  providing  updates  on  operation  and  development  of  their  programmes  in  a 

timely manner; 

(b) 

(c) 

engaging  in  mutually  beneficial  exchanges  of  information  regarding  supply 
chain security; and 

facilitating  effective  inter-agency  communication  between  the  European 
Commission  Directorate-General  for  Taxation  and  Customs  Union  and  U.S. 
Customs  and  Border  Protection  to  enhance  risk  management  practices  with 
respect  to  supply  chain  security  on  the  part  of  the  members  of  the  Trade 
Partnership Programmes. 

Exchanges of information are to be conducted in electronic format and in accordance 
with the CMAA, in particular Article 17 thereof. 

Data  to  be  exchanged  regarding  members  of  the  Trade  Partnership  Programmes, 
where such exchanges are otherwise authorised, include: 

(2) 

(3) 

(a)  name;  

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(b) 

address; 

(c) 

status of membership; 

(d)  validation or authorisation date; 

(e) 

suspensions and revocations; 

(f) 

the  unique  authorization  or  identification  number  (in  a  form  mutually 
determined by the Customs Authorities); and 

(g)  details  that  may  be  mutually  determined  between  the  Customs  Authorities, 

subject, where applicable, to any necessary safeguards.  

(4) 

The  exchange  of  data  is  expected  to  commence  when  the  Customs  Authorities 
implement mutual recognition of membership status as described in paragraph 1 of 
Section III of this Decision.  

Section V. 

Treatment of Data 

(1) 

(2) 

(3) 

Consistent  with  the  CMAA,  in  particular  Article  17,  the  data  obtained  by  the 
receiving Customs Authority under this Decision are to be used and processed for the 
purposes of implementing this Decision.  

The Customs Authorities strive to ensure that the information exchanged is accurate 
and  regularly  updated,  and  that  appropriate  deletion  procedures  are  in  place.  In  the 
event a Customs Authority determines that information provided under this Decision 
should be amended, the Customs Authority providing this information is to promptly 
advise the receiving Customs Authority of such amendments. Once notified of such 
amendments,  the  receiving  Customs  Authority  is  to  promptly  record  such 
amendment.  Information  may  not  be  processed  and  kept  longer  than  necessary  for 
the purpose for which it is transferred.  

In the event information with personal data is exchanged pursuant to Section IV (3) 
a)  to  g),  the  Customs  Authorities  also  take  appropriate  measures  to  ensure  data 
protection, security, confidentiality and integrity. The Customs Authorities ensure in 
particular that: 

– 

– 

– 

security  safeguards  are  in  place  (including  electronic  safeguards)  which 
control, on a need-to-know basis, access to such information obtained from the 
other  Customs  Authority  under  this  Decision  and  that  it  is  used  only  for  the 
purposes of this Decision. 

such  information  obtained  from  the  other  Customs  Authority  under  this 
Decision is protected from unauthorized access, dissemination, and alteration, 
deletion  or  destruction,  except  to  the  extent  appropriate  to  implement  the 
provisions of paragraph 2) above.  

information obtained from the other Customs Authority under this Decision is 
not  transmitted  to  any  other  country  or  international  body  without  the  prior 

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consent of the Customs Authority that has provided this information and only 
in accordance with the conditions specified by the latter.  

– 

– 

any such information may be used within the Contracting Parties to the CMAA 
to  protect  public  security  interests  and  supply  chain  security  relevant  to  this 
Decision,  and  for  customs,  import/export  safety  and  trade  facilitation  and 
enforcement,  provided  it  is  subject  to safeguards  equivalent  or  comparable  to 
those set forth in this section. 

such  information  obtained  from  the  other  Customs  Authority  under  this 
Decision  is  stored  at  all  times  in  secure  electronic  and/or  paper  storage 
systems.  Logs  or  documentation  are  kept  on  all  access,  as  well  as  processing 
and use of such information obtained from the other Customs Authority. 

With respect to any personal data which may be exchanged pursuant to Section IV 
(3) a) to g), a programme member may request access to and/or amendment of such 
data relating to him or her that are processed by a Customs Authority. Each Customs 
Authority  is  to  advise  its  programme  members  to  make  requests  for  access  and/or 
amendment in the first instance via their own Trade Partnership Programme. Where 
appropriate, and in accordance with its domestic legislation, the Customs Authority 
is  to  correct  any  such  inaccurate  or  incomplete  data.  Each  Customs  Authority  also 
informs  programme  members  of  the  options  for  seeking  administrative  and/or 
judicial redress.  

At the request of the supplying Customs Authority, the receiving Customs Authority 
is to update, correct, block, or delete information received under this Decision that is 
inaccurate  or  incomplete  or  if  its  collection  or  further  processing  contravenes  this 
Decision or the CMAA. Each Customs Authority is to notify the other if it becomes 
aware that material information it has transmitted to the other Customs Authority or 
received  from  the  other  Customs  Authority  under  this  Decision  is  inaccurate  or 
unreliable or is subject to significant doubt. Where a Customs Authority determines 
that  information  it  has  received  from  the  other  Customs  Authority  under  this 
Decision  is  inaccurate,  it  is  to  take  all  measures  it  deems  appropriate  to  safeguard 
against erroneous reliance on such information, including supplementation, deletion, 
or correction of such information. 

Compliance with provisions in this Section by each Customs Authority is subject to 
the independent oversight and review by their respective relevant authority (for the 
U.S. side, the Department of Homeland Security’s Chief Privacy Officer; for the EU, 
the European Data Protection Supervisor and the EU Member States data protection 
authorities).  These  authorities  have  effective  powers  of  oversight,  investigation, 
intervention and review, and have power to refer violations of law for prosecution or 
disciplinary action, where appropriate. They ensure that complaints relating to non-
compliance are received, investigated, responded to, and appropriately redressed.  

Section VI. 

Review 

(4) 

(5) 

(6) 

The  JCCC  reviews  the  implementation  of  this  Decision  regularly.  The  review  includes,  in 
particular: 

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(a) 

(b) 

(c) 

joint  validations  to  identify  strengths  and  weaknesses  in  implementing 
this Decision: 

exchanges  of  views  on  data  to  be  shared  and  treatment  of  operators, 
consistent with this Decision; and  

exchanges  of  views  on  security  provisions  such  as  procedures  to  be 
followed during and after a serious security incident or when conditions 
merit suspension of mutual recognition.  

Section VII. 

General Acknowledgements 

(1)  This  Decision  aims  to  implement  provisions  of  the  CMAA  and  of  the 
Agreement  between  the  European  Community  and  the  United  States  of 
America on intensifying and broadening the CMAA to include cooperation on 
container security and related matters of 28 April 2004. 

(2)  This  Decision  is  to  be  implemented  consistent  with  the  respective  applicable 
laws, regulations, and international agreements to which the EU or the U.S. is a 
party. 

(3)  This Decision does not create or confer any rights, privileges, or benefits upon 

any third party, person, or entity, private or public.  

(4)  Each  Customs  Authority  is  to  be  responsible  for  its  own  costs  resulting  from 

the implementation of this Decision.  

Section VIII. 

Commencement, Suspension and Discontinuation 

(1)  The cooperation under this Decision commences upon signature by the JCCC 

Chairpersons. 

(2) 

Implementation  of  Mutual  Recognition  between  the  U.S.  and  EU  takes  place 
consistent  with  Section  III,  paragraph  1.  Either  Customs  Authority  may 
suspend or discontinue cooperation under this Decision at any time, but should 
provide at least thirty (30) days written notice thereof. Such notice is provided 
to  or  by  U.S.  Customs  and  Border  Protection  and  the  European  Commission 
Directorate-General for Taxation and Customs Union, respectively.  

Signed at …., ….. 

For the EU-US Joint Customs Cooperation Committee 

_________________  ________________ 
. 

(The two chairpersons) 

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