Q1. Who is an authorised economic operator (AEO)?

ANS. 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 programme.

Q 2. What is the AEO programme?

ANS. The AEO programme 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 programme 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 programme, the Customs shares its responsibility with the businesses, while at the same time rewarding them with a number of additional benefits

Q 3. What is the aim of the Indian Customs AEO Programme?

ANS. The AEO programme has the fol - lowing objectives: • To provide business entities with an internationally recog - nized certification; • To recognize business entities as “secure and reliable” trad - ing partners; • To incentivize business entities through defined benefits that translate into savings in time and cost; • Secure supply chain from point of export to import; • Ability to demonstrate compli - ance with security standards when contracting to supply overseas importers / exporters; • Enhanced border clearance privileges in Mutual Recogni - tion Agreement (MRA) partner countries; • Minimal security related dis - ruption to flow of cargo; • Reduction in dwell time and re - lated costs; and • Customs advice / assistance if trade faces unexpected issues with Customs of countries with which India has MRAs.

Q 4. What are the benefits of AEO status?

ANS. There are a host of benefits for all three categories of AEOs- T1, T2, T3 and LOs. These are listed in paras 1.5.1 to 1.5.4 for AEO T1, T2, T3 and LO respectively of Circular No. 33/2016-Customs dated 22nd July, 2016. Some of the major benefits are listed below: a) Recognition worldwide as safe, secure and compliant business partners in international trade and get trade facilitation by a foreign Customs administration with whom India enters into a Mutual Recognition Agree - ment/Arrangement; b) Facility of Direct Port Delivery (DPD) of their import Con - tainers and/ or Direct Port Entry (DPE) of their Export Containers; c) Waiver of full or part of the Bank Guarantee require - ments, Waiver of Merchant overtime fees; d) Deferred payment of duties; e) Waiver from transactional PCA. Instead Onsite PCA has been provided, the selection of the same shall be based on risk assessment of AEOs; f) Waiver of solvency certification for Customs Brokers; g) A lower risk score in risk analysis systems when profil - ing; h) Faster disbursal of drawback amount through pro - cess eased out vide Circular 18/2017 Customs dated 29.05.2017; i) Fast tracking of refunds and adjudications;

For more details, please contact us. We provide complete support and guidance including application preparation, SOP, Site Audit / Visit, Grant of AEO T1/T2/T3/LO certification, as the case may be and resolution of the matters as for Custom Act and Rules.