For Yemen's Trusted Traders AEO Offers a Light in the Harbor

Monday, January 27, 2020
Luay Khuda Bakhsh, Senior Manager of the Hayel Saeed Anam Group, speaks at the AEO launch.
YESS

"The launching of the AEO pilot marks the beginning of the stage of reconstruction and institutional development in Yemen, after years of destruction and war."
— Mr. Salim Bin Buraik, Minister of Finance, Yemen

Before the Al Alam Industrial Company became a designated Authorized Economic Operator (AEO) “trusted trader,” it took several days for the Yemen Customs Authority to clear the firm’s imports of woven polypropylene bags. Now the process takes less than a day, saving the business considerable time and money, and giving it a competitive edge over companies that do not have official trusted trader status.

“We are proud to stand out, in this highly ravaged country, as a corporation that adheres to the highest standards of transparency and compliance with Customs regulations,” says Luay Khuda Bakhsh, Member of the Senior Leadership Team of Hayel Saeed Anam (HSA) Group, which includes the Al-Alam Industrial Company. HSA is a multinational corporation that manages companies from different economic sectors, and was early to recognize the benefits of the AEO program. “We encourage all our companies to complete the procedures required to acquire the privileges granted by this program,” notes Mr. Khuda Bakhsh.

The Port of Aden is one of the economic pillars of Yemen. It is one of the largest natural ports in the world and is strategically located at the southern entrance of the Red Sea shipping lane that carries 10 percent of the world’s maritime transport traffic. Trade has flowed through Aden for more than 3,000 years, but fell to a trickle with the outbreak of war in 2015, contributing greatly to the ongoing devastation of the economy and daily lives of the Yemeni people.

To increase the flow of goods through Aden and ensure the shipping of critical humanitarian supplies into the country, USAID’s Yemen Economic Stabilization and Success (YESS) program is sparking new advances aimed at addressing trade bottlenecks and barriers. As a case in point, the YESS team worked extensively with the Yemen Customs Authority to introduce a pilot program in Aden in July 2019 using the AEO designation requirements, which greatly facilitate trade operations and efficiencies.

AEO is an internationally recognized pre-approval process for companies involved in the international movement of goods. It acts as an easy pass through Customs for trusted traders who can demonstrate solid compliance histories with Customs requirements and meet a wide range of security and management conditions. In Yemen, the eligibility criteria also require that a company have had a minimum of five years in business and at least 150 import declarations (or $500,000 worth of imports) annually during the last three years. Further requirements include three years with both a clean record of compliance with Customs laws and proof of financial solvency.

As of January 2020, two firms have qualified as AEO trusted traders: Al-Alam Industrial Co. and Bin Awadh Al-Naqeeb Trading Corporation, which specializes in the import of rice, cooking oil, biscuits, canned tuna, and other foodstuffs. Three additional entities have submitted applications that are currently under review, including Yemen Company for Flour Mills and Silos, which produces flour and bran and is another member of the HSA Group; AbdulWahed M. Noman & Sons Estb. Ltd., an agent of Canon products; and the UN World Food Program, which supplies general food assistance to more than 12 million people in Yemen. Other firms have expressed interest in or are in the process of preparing their applications for AEO designation.

YESS has facilitated targeted trainings and the development of awareness-building materials on the AEO program with both the Yemen Customs Authority and private-sector stakeholders from large trading companies. The YESS team brought public and private sector partners to the table to agree on a modality for AEO, based on the World Trade Organization’s Trade Facilitation Agreement. It also helped Yemen Customs to finalize the regulations, forms, and procedures for granting the AEO status.

The World Customs Organization (WCO) included Yemen in its 2019 AEO Compendium, an annual publication that tracks developments related to AEO and Customs compliance programs. The WCO is widely recognized as a major driver of strong Customs-business partnerships.

The introduction of the AEO program greatly facilitates trade and enhances Yemen’s participation in the global supply chain. It accelerates clearance times and reduces the number of documents and inspections for trusted traders. But, equally importantly, AEO status brings a new way of doing business between private companies and the Customs authorities, who come to represent partners instead of opponents.

AEO serves to build an alliance between Customs authorities and the private sector – conferring priority treatment and greater facilities to certified companies for importing and exporting goods. With AEO certification, companies benefit from such conditions as simplifications in transit and Customs clearance procedures, priority treatment of consignments selected for inspection, and the option of a centralized clearance self-assessment. Certified firms also have easier admittance to special procedures, such as temporary storage and Customs warehousing.

Ultimately, the benefits of AEO span beyond the facilitation of trade in and out of the country. The public-private collaboration created through AEO designation is helping to re-establish a sense of trust in government systems, and their ability to promote a more positive environment for business, trade and growth.

“At a time when institutions were falling apart, and many had succumbed to the bitter reality that everyone had been suffering, the AEO program was such a sip of honey,” says Luay Khuda Bakhsh from the Hayel Saeed Anam Group. “It has brought a glimmer of light that gives the private sector hope for the future of this country.”

USAID’s Yemen Economic Stabilization and Success (YESS) program supports self-reliance and resilience by facilitating trade, increasing employment, supporting sustainable livelihoods, and stabilizing crucial macroeconomic policy issues. The program is part of the USAID Middle East Economic Growth Best Practices Project, which provides the Middle East Bureau, Missions, and Operating Units with tools to support economic growth and reform across the Middle East and North Africa.

Last updated: May 26, 2020

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