With the developing technology, the share of countries in international trade has started to gain importance daily. It has become an obligation for the companies active in foreign trade to adapt to changing trends and obligations. International systems that offer important privileges in customs processes have started to become widespread in our country as well. The Authorized Economic Operator (AEO) System (YYS) is one of these. We met with Yucel Karadis, the founder of Consulturk, which offers consultancy and audit services in the fields of customs, foreign trade and incentives, and discussed the advantages and privileges provided by the system to organizations.
Can we get to know you a little?
I started my role as the deputy customs inspector in 2001. After working as an assistant inspector for 3 years, I was appointed as customs inspector in 2003–2004. Between 2009 and 2011, I completed my master’s degree in International Economics at Boston Northeastern University in the US. After returning to Türkiye, I took on the position of Minister’s adviser at the Ministry of Customs and Trade for about 1 year. I also served as the head of department for almost 3.5 years. Also, I was the international coordinator of the Authorized Economic Operator System at the ministry. In December 2016, I resigned and founded my own company, Consulturk. I have worked as a lecturer at various universities and currently teaching courses on international trade and customs at Istanbul Sehir University. I have 6 publications on customs broker training.
Which companies have you offered consulting services to so far?
We offer services to about 65 companies in the market. We have offered services to the leading companies of Türkiye. We manage the necessary processes for giant companies such as Yildiz Holding, Colgate, Palmolive, Anadolu Group, KTM Kimya, Ihlas Holding and Ozdisan Elektronik to obtain AEO certificate. We also offer customs and foreign trade consultancy.
“The Authorized Economic Operator System makes it possible to distinguish the risky companies from the non-risky ones.”
Can we learn a bit about the features of the Economic Operator System please?
The Authorized Economic Operator System makes it possible to distinguish the risky companies from the non-risky ones. With this system, which is globally recognized as the “Authorized Economic Operator (AEO)” system, the non-risky (or reliable) companies are subjected to less control and inspection. The companies that are risky, on the other hand, are subject to several controls and stricter supervision. Thus, an effective audit system is being established and public resources are being designed in a healthier way. As a result, reliable companies benefit from fewer audit and control privileges. On the other hand, the public authorities conduct more effective controls over unreliable (or risky) companies.
When did this system come into force?
In 2005, the World Customs Organization introduced AEO system to the world. Although the Customs Administration brought this system to Türkiye in 2009, the regulation was actually put into force in 2013. In 2015, the AEO system was discontinued in our country with a mistaken belief that it provides too many opportunities for import. However, in the following years, it has become clearer that this was a system that increases “safe” trade, not imports. With the Bali Convention put into force in 2017, AEO was accepted as a globally recognized system. So it has become an international law.
In how many countries is this system in force?
As of today, the Authorized Economic Operator System is available in 91 countries and actually implemented by 74 countries. AEO is actually a privilege granted to companies that have financial competence, fulfill customs obligations, and apply safety and security standards. It’s a system where the customs transit can be completed easier, faster and without any additional inspections. In order to qualify for this system, the companies must have a sound security and financial competence. The traceability of commercial records is also an important factor. The traceability and security of commercial records means that all items can be tracked from order to delivery. The companies willing to qualify for this system should have established mechanisms that prevent intrusion to the system from outside. That’s exactly where we come into play.
What other conditions are being sought after?
ISO 27001 certificate is an ISO certificate that helps organizations keep and manage their and their customers' confidential information secure. This prevents unauthorized external parties from penetrating the system. The public administration makes this system mandatory. Because, the public administration says to those reliable companies that... OK, I’m not auditing you anymore, but you, in turn, will set up such an internal audit mechanism that no external parties will be able to penetrate your system either physically or electronically. And they will never be able to access your business records either. At this point, the ISO 27001 system comes into play. A prerequisite for applying for AEO is to obtain ISO 9001 quality management system and ISO 27001 information security certificates. The companies that fail to achieve these certificates do not have the chance to obtain AEO.
“With the Bali Convention put into force in 2017, AEO was accepted as a globally recognized system.”
“Trust” comes out even more in this system, doesn't it?
Yes. It is also required that the applicant has not seriously or repeatedly violated the customs legislation. Also, the members of the Board of Directors, real persons with more than 10% of the company’s capital, as well as the company employees having a representation authority in customs and foreign trade transactions are important at this point. These people should not have committed any serious crime that threatens public safety, or any serious financial crime.
Who should obtain AEO?
I believe that all the companies that import and export should obtain AEO. Especially the companies that engage in foreign trade intensively should definitely obtain AEO. With AEO, your facility is almost turning into a customs clearance center. Customs checks and inspections on the companies that do not have AEO are much more frequent. The companies that have AEO, on the other hand, benefit from the convenience of the “green line” and have the opportunity to ship their products directly abroad once they receive customs clearance on site. The requirements for AEO certificate are usually “general”. However, when there is a request for customs clearance on site, the company in question must also fulfill some additional conditions accordingly. For example, in order to be able to carry out customs clearance on site for export, the value of that export transaction should be min. $5 million. For on-site customs clearance for import, on the other hand, the company should issue a guarantee of €500K. This system is a facilitating factor not only in a national sense, but also in international regard.
Does the AEO certificate have a validity period?
The validity period of the certificate is infinite, as long as no sanctions like suspending, revoking or canceling the certificate were applied. The certificate becomes valid on the first business day after the date of issue.
Companies and customs brokers also need training in this area, right?
Yes, absolutely. Customs brokers and foreign trade specialists need a lot of training in this field. As the company, one of our fields of expertise is training already.
A prerequisite for applying for AEO is to obtain ISO 9001 quality management system and
ISO 27001 information security certificates.
How should the companies train their employees in this field today, when foreign trade is becoming more and more important every day? What are your activities in this regard?
We have a separate structure called the Consulturk Academy. This academy provides all the necessary trainings in customs and foreign trade. In addition to AEO, we also offer trainings on customs legislation. At the same time, we offer trainings to companies on specific fields of foreign trade, such as the incentives from the Ministry of Economy, investment incentive legislations, internal processing legislations and external processing legislations. We are able to give these trainings at the customer’s place. Or, we can host the employees of the foreign trade departments of the companies in a specific hall within our company. We also offer training packages that the companies can freely choose from. The most important advantage here is that the officers of the companies can benefit from the knowledge of our experienced experts from the sector. As you know, the incentives provided by the Ministry of Economy covers the personnel training expenses too.
There are other important areas where the Ministry of Economy provides incentives, right?
Incentive counseling is also one of our main focuses. The most important document that offers benefits in the field of incentives is Turquality. As you know, this document is actually a “brand support” provided by the Ministry of Economy. We are explaining to the companies the incentives that they can obtain in this regard. We act with them as a partner until they receive the incentives. There are only 163 companies that have managed to obtain Turquality in Türkiye so far.
