AEO is a trade facilitation scheme for ease of doing business considering international development, holder of this certificate is entitled for privilege, benefits, exemption and relaxation on account of import and export. This certificate is issued for a period after that to be renewed.
Overview of AEO Certification:
The Authorized Economic Operator (AEO) program, initiated by Indian Customs, aims to facilitate trade and strengthen the security of the global supply chain. It aligns with the World Customs Organization (WCO) SAFE Framework of Standards and offers businesses involved in international trade, such as importers and exporters, various benefits including expedited customs processing. In exchange, businesses must meet stringent compliance, safety and security requirements. The program provides a three-tier certification system for exporters and importers, comprising AEO T1, AEO T2 and AEO T3 with AEO T3 being the highest level of accreditation. Each tier offers increasing levels of facilitation to status holders.
Key Features and Benefits of AEO Certification:
- Simplified Customs Procedures: AEO-certified businesses enjoy reduced customs checks and fewer document verifications, resulting in faster clearance times at ports.
- Priority Processing: AEO members receive priority in customs procedures including import and export cargo clearance. This is especially valuable during peak periods or for high-value shipments.
- Cost Reduction: Streamlined customs processes help minimize costs associated with port and airport delays including potential demurrage charges.
- Mutual Recognition Agreements(MRA): The AEO program allows for mutual recognition between Indian Customs and customs authorities of other countries, enabling quicker clearance abroad for AEO-certified companies.
- Risk Mitigation: Businesses certified under the program undergo thorough supply chain assessments, reducing the likelihood of customs-related penalties and delays.
- Dedicated Support: AEO members have access to a dedicated help desk within Indian Customs for swift resolution of issues.
Categories of AEO Certification:
The program offers different levels of certification based on the entity's role in the supply chain and it’s compliance history:
- AEO-T1: For businesses meeting basic compliance standards and seeking entry-level certification.
- AEO-T2: Provides additional benefits with stricter customs and security requirements.
- AEO-T3: The highest certification, offering maximum benefits to businesses with a long history of compliance.
Eligibility:
Businesses engaged in the international supply chain including importers, exporters, logistics providers and warehouse operators are eligible to apply for AEO status. Applicants must demonstrate a solid record of regulatory compliance, strong internal controls and adherence to security standards across their supply chain operations.
The AEO program is designed to create a secure, efficient and compliant environment for international trade, enabling businesses to save time and reduce costs while ensuring customs enforcement and supply chain security.
Fees:
For a customized and attractive quotation, please contact with your product details to Rekha Atri (+91 98118 03136) or Manju Laur (+91 9711994042).
Frequently Asked Questions
An AEO is a business entity involved in international movement of goods requiring compliance with provisions of the national Customs law and is approved by or on behalf of national administration in compliance with World Customs Organization (WCO) or equivalent supply chain security standards. The security standards are detailed in World Customs Organisation Safe framework of standards [WCO SAFE FoS], which is the basis of the Indian AEO program.
The AEO program enables Customs administration to identify the safe and compliant business entity in order to provide them a higher degree of assured facilitation. This segmentation approach enables Customs resources to focus on less or non-compliant or risky businesses for control. Thus, the aim of AEO program is to secure the international supply chain by granting recognition to reliable operators and encouraging best practices at all levels in the international supply chain. Through this program, the Customs shares its responsibility with the businesses, while at the same time rewarding them with a number of additional benefits.
The genesis of AEO scheme dates back to September 11, 2001 event in US which made all the governments to realise that the supply chain itself could be used for terror activities and a need was felt to make the supply chain secure. Since the supply chain is controlled by the trade, the Customs administration is partnering the trade in order to secure the supply chain. The US started CT-PAT (Customs Trade – Partnership against terrorism) program. Later WCO adopted SAFE Framework of Standards in 2005 in order to secure and facilitate the trade. The SAFE framework has three pillars comprising of Customs to Customs partnership, Customs to Business partnership and Customs to other Govt. stake holders. AEO program is the core part of Pillar-II i.e. - Customs to Business partnership.
The SAFE FoS sets forth criteria by which businesses in supply chain can obtain authorised status as a secure partner. The criteria are incorporated in CBEC Circular No. 28/2012 dated 16.11.2012. Thereafter, a Revised AEO Program was launched vide Circular No. 33/2016-Customs dated 22.07.2016 as amended by Circular No. 03/2018 dated 17.02.2018, 26/2018 dated 10.08.2018 and Circular No. 51/2018 dated 07.12.2018.
The AEO Program was introduced as pilot project in 2011 vide Circular No. 37/2011- Customs dated 23rd August, 2011. The same was amended and the revised final AEO program was introduced vide Circular No. 28/2012 dated 16.11.2012. With international developments such as Trade Facilitation Agreement (TFA) on securing and facilitating the International Trade and focus of Government of India on Ease of Doing Business, a comprehensive, unified trade facilitation initiative was launched by merging the existing Accredited Client Program (ACP) and the ongoing AEO scheme of 2012 in the form of revised AEO Program vide Circular No. 33/2016-Customs dated 22nd July, 2016. The ACP scheme was abolished by rescinding the Circular No. 42/2005-Customs dated 24.11.2005. Further, simplification for financial solvency and decentralisation of AEO application processing was done vide Circular No. 03/2018 dated. 17.01.2018. The application process for AEO-T1 accreditation was further simplified to two Annexures only by Circular No. 26/2018 dated 10.08.2018 from five Annexures as was stipulated in Circular No. 33/2016 dated 22.07.2016. Web based On-line application filing and processing for AEO-T1 status started from December 2018 vide Circular 51/2018 dated 07.12.2018.
Yes. All AEO T1/T2/T3 status holders are entitled for DPD/ DPE facility. However, they have to apply for the Direct Port Delivery permission to the concerned Chief Commissioner and also register themselves with the port authority for DPD facility.
No. The AEO scheme is purely an optional scheme. Applying for AEO status is a business decision depending on the role of the business entity in the supply chain and it’s willingness to acquire the benefit flowing by acquiring AEO status.
There is a three-tier program for importers and exporters i.e. AEO-T1, AEO-T2 and AEO-T3 in the increasing degree of benefits accorded and compliance requirements. Furthermore, there is single Tier AEO Program for Logistics Providers, Custodians or Terminal Operators, Customs Brokers and Warehouse Operators who are granted AEO-LO certificate.
The validity of AEO certificate is three years for AEO-T1 and AEO-T2, and five years for AEO-T3 and AEO-LO.
Yes. It is valid at all Customs stations in India. In other words, an AEO status holder shall get the AEO benefits at all Customs ports/ airports/ Land Customs stations.
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