TaxTMI 
TaxTMI 
Review of entity based facilitation programmes viz. Accredited Client Programme (ACP) and Authorized Economic Operator (AEO) programme - Revised Guidelines
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....nstrated strong internal control system and willingness to comply with the laws administered by the Central Board of Excise and Customs. The prominent features of the new programme are: i. inclusion of Direct Port Delivery of imports to ensure just-in-time inventory management by manufacturers - clearance from wharf to warehouse ii. inclusion of Direct Port Entry for factory stuffed containers meant for export by AEOs iii. special focus on small and medium scale entities - any entity handling 25 import or export documents annually can become part of this programme iv. provision of deferred payment of duties - delinking duty payment and Customs clearance v. mutual recognition agreements with other Customs Administrations vi. faster disbursal of drawback amount vii. fast tracking of refunds and adjudications viii. extension of facilitation to exports in addition to imports ix. self-certified copies of FTA / PTA origin related or any other certificates required for clearance would be accepted x. request based on-site inspection /examination xi. paperless declarations with no supportin....
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....onomic Operator (AEO) programme, which constitutes one of the three pillars on which SAFE Framework rests. The AEO programme seeks to provide tangible benefits in the form of faster Customs clearances and simplified Customs procedures to those business entities who offer a high degree of security guarantees in respect of their role in the supply chain. The SAFE Framework sets forth the criteria by which businesses in the supply chain can obtain authorized status as a secure partner. Such criteria address issues such as threat assessment, a security plan adapted to the assessed threats, procedural measures to prevent illegitimate goods entering the supply chain, physical security of buildings and premises used as loading or warehousing sites, and security of cargo, means of transport, personnel and information system. 1.1.2 Over the years, AEO has become a flagship programme for WCO Members as it offers an opportunity for Customs to share its responsibilities with the businesses, while at the same time rewarding them with a number of additional benefits. As of March, 2015, 168 out of 180 WCO Members have signed Letters of Intent committing to i....
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....onomic operator, issue the following Authorized Economic Operator Certificates (hereinafter referred to as AEO certificates)to which the applicant may be eligible as per the eligibility conditions and criteria laid down under paragraph 3 of this circular: 1.2.1 (i) (ii) AEO-T1Certificate- This certificate may be granted only to an importer or to an exporter. For the purpose of this certificate, the Importer/Exporter should fulfill the criteria mentioned at para 3.1 below; and All other requirements as stipulated in paragraphs 3.2, 3.3 and 3.4 below shall be considered to have been met if the information and documents submitted by the applicant prove the claims of the applicant to the satisfaction of the AEO Programme Manager. 1.2.2 AEO-T2 Certificate- This certificate may be granted only to an importer or to an exporter (i) (ii) For the purpose of this certificate, the economic operator should fulfill the criteria mentioned at para 3.1 below; and all other requirements as stipulated in paragraphs 3.2, 3.3, 3.4 and 3.5 below shall be considered to have been met if the claims made in this regard in information and documents ....
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....its in terms of this circular in terms of paragraph 1.5 below. They shall remain AEO-T2or AEO-LOcertificate holders till the validity period mentioned in their AEO certificate issued under Circular 28/2012 - Cus dated 16-11-2012. Thereafter, they will have to follow renewal procedure as prescribed in this circular. In the meantime, it shall also be open for them to apply for AEO-T3 certificate, if eligible. 1.4.2 All the existing ACP clients who have been granted ACP status in terms of the erstwhile ACP circulars and who continue to possess such status validly shall be provisionally granted AEO- T1 Certificate by the AEO Programme Manager within 15 days of issue of this circular, and thereafter, they shall become entitled for benefits in terms of this circular in terms of paragraph 1.5 below. They shall remain AEO-T1 certificate holders till the validity period mentioned in their ACP renewal/granting letter. Thereafter, they will have to follow renewal procedure as prescribed in this circular. 1.4.3 All such ACP clients shall have an opportunity to submit applications for grant of AEO Certificates in terms of this circular within 90 days of is....
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....vii. viii. ix. X. They shall be accorded high level of facilitation in imports and export of their consignments, thereby ensuring shorter cargo release time. Facility of Direct Port Delivery (DPD) of their import Containers and/ or Direct Port Entry (DPE) of their Export Containers would be available to them. However, this facility will be dependent on the volume of their Import/Export trade in terms of number of containers. ID cards to be granted to authorized personnel for hassle free entry to Custom Houses, CFSs and ICDs. Wherever feasible, they will get separate space earmarked in Custodian's premises. In case they are required to furnish a Bank Guarantee, the quantum of the Bank Guarantee would be 50% of that required to be furnished by an importer/ exporter who is not an AEO Certificate Holder. However, this exemption fromBank guarantee wouldnot be applicable in cases where the Competent Authority orders furnishing of Bank Guarantee for provisional release of seized goods. Investigations, if any, in respect of Customs, Central Excise and Service Tax cases would be completed, as far as possible, in six to nine months. ....
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....e subjected to regular transactional PCA instead of that onsite PCA will be conducted once in three years only. They will be given access to their consolidated import/export data through ICEGATE from a date that would be communicated separately. They will be provided the facility of submitting paperless declarations with no supporting documents in physical form. All Custom Houses will appoint a “Client Relationship Manager" (CRM) at the level of Deputy Assistant Commissioner as a single point of interaction with them. The CRM would act as voice of the AEO within Customs in relation to legitimate concerns and issues of AEO and would assist in getting procedural and operational issues resolved by coordinating with different sections within Customs as well as other stakeholders. The refund/Rebate of Customs/Central Excise duty and Service Tax would be granted within 45 days of the submission of complete documents. They will get trade facilitation by a foreign Customs administration with whom India enters into a Mutual Recognition Agreement/Arrangement. 1.5.3 Benefits for AEO-T3: The following benefits would be provided over and abo....
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....atus) of licenses granted under regulation 9 of the CBLR 2013. System Manager to incorporate date of validity of AEO from time to time in the System Directory (c) Waiver from fee for renewal of license under sub regulation (2) of regulation 11 of CBLR, 2013. (a) Faster approval for new warehouses within 7 days of submission of complete documents (b) Waiver of antecedent verification envisaged for grant of license for warehouse under circular 26/2016 Warehouse (c) Waiver of solvency certificate requirement under circular Operators 24/2016 (d) Waiver of security for obtaining extension in warehousing period under circular 21/2016 (e) Waiver of security required for warehousing of sensitive goods under circular 21/2016 1.5.5 With a view to promote an overall voluntary compliance framework, the selection of AEO's for on-site post clearance audit (OSPCA) in respect of AEO-T1, AEO-T2 and AEO-T3 shall be based on risk assessment. Better and higher compliance level demonstrated by the AEO shall be taken into account for determining the frequency of audit. It is also clarified that AEO's undergoing OSPCA shall not be subjected t....
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....ew Delhi-110002. 2.5 The Additional Director General, Directorate General of Performance Management, Customs & Central Excise, ‘D' Block, I.P. Bhawan, I.P. Estate, New Delhi - 110002 will be the AEO Programme Manager and AEO Programme Team will comprise officers from the Directorate General of Performance Management and its regional offices. Section 3 Eligibility conditions and criteria for granting the AEO certificate 3.1 Who can apply for AEO certificate? 3.1.1 Anyone involved in the international supply chain that undertakes Customs related activity in India can apply for AEO status irrespective of size of the business. These may include exporters, importers, logistic providers (e.g. carriers, airlines, freight forwarders, etc.), Custodians or Terminal Operators, Customs House Agents and Warehouse Owners. Others who may qualify include port operators, authorized couriers, stevedores. The list is not exhaustive. 3.1.2 Businesses that are not involved in Customs related work / activities will not be entitled to apply. This means that in general, banks, insurance companies, consultants and the like categories of businesses....
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....gramme Manager shall take due account of the specific characteristics of economic operators, in particular of MSMEs, while applying the eligibility conditions and criteria prescribed under paras 3.3 (relating to management of commercial and transport records), and those under paras 3.5 (relating to safety and security) for granting the above AEO Certificates. The AEO Programme Manager shall take into account such factors as the size of the MSMEs, the legal status (e.g. proprietorship, partnership etc), the structure, the key business partners and also the specific economic activity of the economic operator while applying these eligibility conditions and criteria specified under paras 3.3 and 3.5. In particular, the AEO Programme Manager shall take into account the possible difficulties for MSMEs in meeting with these eligibility conditions and criteria under paras 3.3 and 3.5 with a view to make the above AEO certificates more available to MSMEs. The criteria of turnover indicated in MSME Act would be taken into consideration for categorization of entities into Micro, Small and Medium Enterprises. 3.1.10 DG(Systems), CBEC will progressively in....
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....l: i. ii. iii. iv. V. vi. Maintain an accounting system consistent with Generally Accepted Accounting Principles (GAAP)/International Financial Reporting Standards (IFRS) which facilitates audit-based Customs control; Have an administrative set up which corresponds to the type and size of business and which is suitable for the management of the flow of goods, and have internal controls capable of detecting illegal or irregular transactions; Wherever applicable, have satisfactory procedures in place for the handling of licenses and authorizations connected to export/import; Have satisfactory procedures in place for archiving of the company's records and information, and also for protection against the loss of information; Ensure that employees are made aware of the need to inform the Customs authorities whenever compliance difficulties are discovered and establish suitable contacts to inform the Customs authorities of such occurrences; Have satisfactory procedures for verifying the accuracy of Customs declarations. vii. Have appropriate information technology security measures to protect the applicant's computer sy....
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....mation. Procedure should be in place to ensure that information received from business partners is reported accurately and timely as well as declared in the time limit regulated by Customs. Procedure should be in place to ensure that: a. Import/Export cargo are reconciled against the information on the bill of lading. b. The weights, labels, marks and piece count of the import/export cargo are accurately indicated. c. Import/export cargo are verified against purchase/delivery orders. d. Drivers delivering or receiving cargo are positively identified before cargo is received or released. e. All shortages, overages, and other significant discrepancies or anomalies must be resolved and/or investigated appropriately. 3.5.3 Premises Security: In order to ensure security of the international supply chain, the applicant must ensure that the buildings to be used in connection with the operations to be covered by the certificate are constructed of materials which resist unlawful entry and provide protection against unlawful intrusion. In addition, the applicant must ensure that appropriate access control measures are in place to prevent una....
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....ocure and use PAS / ISO 17712 seals for air consignments/courier consignments any international seal compatible with standards of PAS/ISO 17712 shall be iv. V. vi. vii. viii. ix. used. However in case of maritime containerized cargo only PAS / ISO 17712 seals shall be used. The integrity of container seals should be checked by the authorized person by following the procedure prescribed in the security policy manual. Only authorized personnel should distribute container seals and safeguard their appropriate and legitimate use. When appropriate to the type of cargo container used, a seven-point inspection process is recommended: Front wall, Left side, Right side, Floor, Ceiling/Roof, Inside/outside doors, Outside/undercarriage. Appropriate procedures should be laid down on measures to be taken when an unauthorized access or tampering is discovered. Goods should be uniformly marked or stored in designated areas and procedures should exist to weigh / tally them and compare them against transport documents, purchase/sales orders and Customs papers. Internal control procedures should exist when discrepancies and/or irregul....
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....ecruiting new staff to verify that they are not previously convicted of security-related, Customs or other criminal offences. ii. 111. iv. V. Periodic background checks must be conducted on employees working in security sensitive positions. Employee identification procedures should require all employees to carry proper identification that uniquely identifies the employee and organization. Procedures to identify, record and deal with unauthorized or unidentified persons, such as photo identification and sign-in registers for visitors etc. must be ensured at all points of entry. Procedures must be in place to expeditiously remove identification and access to premises and information for employees whose employment is terminated. 3.5.7 Business Partner Security In order to secure the international supply chain, the applicant must have implemented measures to ensure a clear identification of his business partners. With this view, following criteria should be fulfilled by the applicant: i. ii. iii. The applicant must have written and verifiable process, including the capability of financial soundness and compliance with....
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.... and made available for verification by the AEO Programme Team and the Customs. Section 4 Procedure for issuing AEO certificates 4.1 Acknowledgement of application Each application will be acknowledged and recorded in an AEO Programme database. 4.2 4.2.1 Return of application: If application is incomplete or deficient, the applicant will be suitably informed within 30 days of the receipt. 4.2.2 In following cases, the application will not be processed until the deficiencies, as indicated, are rectified: i. Which is incomplete – This may be resubmitted with the complete information. ii. Where the application has not been made by a legal person by the concerned legal entity. - This can only be resubmitted 111. iv. V. ― Where no responsible person is nominated as the Point of Contact This can only be resubmitted when the applicant nominates a responsible person who will be the point of contact for the AEO Programme. Where the applicant is subject to bankruptcy proceedings at the time the application is made - This may be resubmitted when the applicant becomes solvent. Where a previousl....
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.... premises for verification of the information and documents provided. Such visit shall be made on a convenient date after consulting the applicant. 4.4.5.2 If within 45 days of the date of intimation issued in terms of paragraph 4.4.5, the applicant has not been contacted by the AEO Programme Team, then the applicant should contact the AEO Programme Manager immediately. 4.4.5.3 During the course of such verification, the applicant for AEO-T2 or AEO-LO status should be prepared to answer questions or provide additional information on all aspect of the application to the visiting AEO Programme Team. 4.4.5.4 Examination of the criteria laid down under Section 3 above shall be carried out for all the premises which are relevant to the customs related activities of the applicant for AEO-T2 or AEO- LO status. The examination as well as its results shall be documented by the AEO Programme team. 4.4.5.5 In case several premises of the applicant are run in a similar way by standard systems of record keeping and security etc. there will be no need for the AEO Programme Team to visit all of them. However, if the business of the applicant covers a rang....
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.... to adapt procedures to remedy the deficiency. If applicant is unable to make the required changes within the specified time limits, the AEO Programme Manager will issue a decision to reject applicant's AEO application, explaining the reasons for rejection. 4.4.7 In exceptional cases, the physical verification may be stopped by consensus between the applicant for grant of AEO-T2 or AEO-LO status and the AEO Programme Manager in order for the applicant to provide additional information or to permit minor problems to be addressed. The period of stoppage will normally not be longer than six months and applicant will be informed in writing of the date when the AEO verification will recommence and the revised date by which applicant can expect a decision on his application. 4.4.8 In case an application for grant of AEO-T3 status is submitted by a holder of AEO-T2 status, who has been continuously enjoying the AEO-T2 status for a period of two years or more, the applicant shall be issued the AEO-T3 certificate within 30 days of submission of the application. However, in case of any significant changes in the business or the processes since the previ....
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....ification Provisions 5.1 Validity of AEO Certificate The validity of AEO certificate shall be two years for AEO-T1, three years for AEO-T2, and five years for AEO-T3 and AEO-LO. 5.2 Renewal of AEO certificate 5.2.1 The AEOs, if they so desire to continue their AEO status and avail the benefits, must submit their application as stipulated under Section 2 of this circular, before lapse of their validity as per the following:- AEO status Time limit for submission of application for renewal before lapse of validity AEO-T1 30 days AEO-T2 60 days AEO-T3 90 days 90 days AEO-LO 5.2.2 While submitting the application for renewal, the applicant must clearly highlight the changes from the last application. 5.2.3 AEO Programme Manager will consider the renewal applications by following the procedure adopted while granting the fresh AEO status. 5.3 5.3.1 Maintenance of AEO Status: After obtaining AEO status, the AEO status holder should maintain their eligibility by adhering to the appropriate standards. 5.3.2 The holder of a Certificate of AEO Status is required to notify any significant change in busi....
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....importer or an AEO exporter, if any show cause notice has been issued alleging infringement of Customs/Central Excise/Service Tax law, other than those covered under para 3.2.1, AEO Programme Manager may downgrade the status of an AEO-T3 to AEO-T2 or AEO-T1, or downgrade the status of an AEO-T2 to AEO-T1, or suspend the status of the AEO, as deemed appropriate. The decision shall be taken after due diligence and on careful evaluation of the material evidence and arguments against the AEO of the case. The AEO Programme Manager may consult the jurisdictional Commissionerate before arriving at the final decision in this regard. The decision to downgrade the AEO status shall be purely an administrative decision. Restoration of suspended/ downgraded AEO Status: 5.6.1 Where AEO status had been suspended on account of detection of any non-compliance with the conditions or criteria for the Certificate of AEO Status, and if the AEO holder takes the necessary remedial measures to the satisfaction of the AEO Programme Manager within 60 days of suspension, the AEO Programme Manager may restore the AEO status from a date to be notified by him. 5.6.2 Whe....
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....pply for the AEO certificate for a period of one year from the date of revocation. 5.7.4 In case the AEO status is revoked, the AEO-T3and AEO-LO status holder will not be entitled to reapply for the AEO certificate for a period of three years from the date of revocation. ****** APPLICATION FORM FOR GRANT OF AEO STATUS (contains ten annexures A, B, C, D, E.1 to E.5 and F) (Please fill-up the annexures as may be applicable to the applicant) 1. 2. 3. 4. Annexure - A (applicable for grant of AEO-T1, AEO-T2, AEO-T3 and AEO-LO) Name of Company / Economic Operator: Category of business entity: (i.e. importer / exporter / Logistic Service Provider/ Custodian or Terminal Operator/ Customs Broker/ Warehouse Operator) Whether already ACP/AEO certified? (If yes, annex copy of certificate and furnish following:) a. Identification number/code: b. Issued on: c. Valid upto: Address: (If there are more than one site/location, a separate list should be attached for all sites/locations) Contact person:* 5(a). 5(b). Designation: 5(c). Phone number: 5(d). Mobile No.: 5(e). Fax No.: 5(f). Email ad....
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.... • Training and skill upgradation. • Compliance with other Government security related requirements, if any. ******************************************************************************** ************* Annexure-C (applicable for grant of AEO-T1, AEO-T2, AEO-T3 and AEO-LO) PROCESS MAP Process map should illustrate the flow of goods and documentation/ information from receipt of order to the point of export/delivery/receipt of the product. It should describe all the activities/ operations and role of the applicant and that of other business partners who are involved in the import-export supply chain in any manner. ****** ************* ********** ******** Annexure D (applicable for grant of AEO-T1, AEO-T2, AEO-T3 and AEO-LO) SITE PLAN The site plan should cover the whole area managed by the company, clearly illustrating the following (if present): • • • • The external perimeter of the area, including features such as boundary roads, railway lines, streams/rivers, neighboring properties. All access points to the site (e.g. vehicle, rail and pedestrian entran....
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....ng the last financial year. A summary sheet may be provided. Whether the applicant has ever been convicted of a criminal offence? If so complete details of the same should be submitted. Note: 1. The Self-Assessment can be carried out by the applicant themselves or through a third party having expertise. 2. If some points are not applicable, these should be mentioned in the ‘Remarks' column with reason thereof. *********: ************** *********** ********* Annexure-E.2 Legal Compliance (applicable for grant of AEO-T1, AEO-T2, AEO-T3 and AEO-LO) E.2 Compliance Yes No Remarks (a) Whether there is any cases of infringement of Customs Laws by any of the following persons over the three financial years preceding the submission of the application: (b) (á) (d) (e) (i) the applicant; (ii) the person in charge of the applicant company or exercising control over its management; (iii) the person responsible in the applicant company for customs matters. If yes, please indicate the details of the cases. Further, submit details related to volume of the customs related ....
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....any's records and information, and also for protection against the loss of information? Whether there is a system to ensure that employees are made aware of the need to inform the Customs authorities whenever compliance difficulties are discovered and establish suitable contacts to inform the Customs authorities of such occurrences? (f) Whether there is a satisfactory procedure for verifying the accuracy of Customs declarations? Whether there is an appropriate information technology security measures to protect the applicant's computer system from unauthorized intrusion and to secure the applicant's documentation? Yes No Remarks Note: The applicant should enclose appropriate documentary evidences in support of above claims. ************* ************* ******* *****: ************* Annexure E.4 Financial Solvency (applicable for grant of AEO-T1, AEO-T2, AEO-T3 and AEO-LO) E.4 (a) Compliance Whether the applicant has been financially solvent during the three financial years preceding the date of application? (Solvency would generally be defined as good financial standing that is su....
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....ustoms? Whether procedure are in place to ensure that: a. Import / Export cargo are reconciled against the information on the bill of lading? b. The weights, labels, marks and piece count of the import/export cargo are accurately indicated? c. Import/export cargo are verified against purchase/delivery orders? d. Drivers delivering or receiving cargo are positively identified before cargo is received or released? Whether all shortages, overages, and other significant discrepancies or anomalies are resolved and/or investigated appropriately? Yes No Remarks Premises Security: E.5.2 (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (1) (m) (n) (0) Whether building is fully secured against unlawful entry? Whether all external and internal gates, fences and windows are fully secured with locking devices or alternative access monitoring or control measures? Whether the issuance of locks and keys is controlled by management or authorised personnel only? Whether adequate internal and external lighting have been provided especially for entrances and exits, cargo handling and stor....
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.... doors, Outside/undercarriage.) Whether it is possible to deliver goods to an Unsupervised area? Whether appropriate procedures have been laid down on measures to be taken when an unauthorized access or tampering is discovered. Whether goods are uniformly marked or stored in designated areas only? Whether appropriate procedures exist to weigh / tally the goods and compare them against transport documents, purchase/sales orders and Customs papers? Whether internal control procedures exist to deal with situations when any discrepancies and/or irregularities are discovered? E.5.4 Conveyance Security (a) (b) (c) (d) (e) Whether, to the extent possible, all conveyances used for the transportation of cargo within the supply chain are capable of being effectively secured? Whether, to the extent possible, all operators of conveyances used for transport of cargo are trained to maintain the security of the conveyance and the cargo at all times while in its custody? Whether all operators are required to report actual or suspicious incident to designated security department staff of the applicant compan....
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....e contracts as well as the capability of detection and correction of safety defects, for selection of business partners? For AEO business partners, whether the applicant has obtained the copies of their AEO certificate? For non-AEO business partners, whether the applicant has obtained written confirmation from them that they meet AEO equivalent security No Remarks Yes No Remarks (d) (e) criteria? The applicant may obtain one of the following written documents from such business partners for demonstrating their compliance with security criteria? (i) Contractual document (ii) A completed self-assessment security questionnaire from the applicant. (iii) A written statement from the business partner demonstrating their compliance with AEO security criteria. (iv) Senior business partner officer attesting to compliance. (iv) Documents from the business partners demonstrating their compliance with and equivalent and accredited security program administered by a foreign Customs authority. Whether a system exists to encourage other concerned business entities/trading partners to assess and enhance....