Authorised Economic Operator (AEO) for imports and exports
The term Authorised Economic Operator (AEO) is an internationally recognized quality standard demonstrating the company’s role in the international supply chain is secure and their customs controls and procedures efficient and compliant.
International Associates is able to act as a third party Assessment Company to verify your compliance and ensure that you are ready for the HMRC visit.
Post-Brexit, AEO certification will become even more desirable as an internationally recognized tool to keep goods moving.
Any business in the EU regardless size can apply for AEO status if they’re involved in the international supply chain and carry out customs related activities, including:
- Airline Loaders
- Customs Agents
- Freight Forwarders
- Port Operators
- Warehouse Keepers
There are two types of AEO standards;
1. AEOC (Customs Simplification).
To achieve AEOC status, the company must have:
- Good tax and customs compliance history
- Good commercial and transport record-keeping standards
- Financial solvency
- Professional qualifications or demonstrate practical standards of competence
- Security measures in place
- Human resources requirements for security and safety
2. AEOS (Safety and Security).
AEOS is issued to companies that fulfill the above criteria (except for professional qualifications/practical standards) and can show appropriate security and safety standards to protect the international supply chain. These include:
- Physical integrity and access controls
- Logistical processes and, if applicable, the handling of certain kinds of goods
- Personnel and identification of business partners (supply chain due diligence)
An organisation that holds both is referred to as AEOF.
Companies who hold AEO status benefit from some consignments being fast-tracked through customs controls, and when customs select AEO consignments for examination or inspection, they receive priority over non-AEOs, making the whole shipping process run more smoothly and efficiently.
While holding AEO accreditation isn’t mandatory, most reputable freight forwarders will take the time to achieve AEO status, and for those that have, it’s a sure sign that they take their responsibilities seriously
These are simplifications that customs administrations grant to AEO status businesses:
- Fewer physical and document-based controls.
- Priority treatment of consignments if selected for control, including the ability to choose the location at which HMRC applies the customs controls (eg inspection of the goods)
- Easier admittance to customs simplifications and authorisations.
The AEO accreditation process requires businesses to install ‘best-practice’ processes and procedures. As a result, indirect business benefits from AEO status could include:
- Reduced theft and losses.
- Fewer delayed shipments.
- Improved planning.
- Improved customer loyalty.
- Reduced security and safety incidents.
- Lower inspection costs of suppliers and increased co-operation.
- Reduced costs for the operation of customs special procedures (CSP) under the UCC.
The AEO status enhances the reputation of a business, as it signals the high standards to which it operates. Benefitting from a faster application process for customs simplifications and authorisations, meaning duty reliefs are available sooner and working capital can be better managed. Each of these benefits will help to keep supply chains flowing now and in the post-Brexit environment.
Secure supply chain
An AEO status business which meets the security and safety criteria is considered to be a secure and safe partner in the supply chain. This means that an AEO status business continuously does everything in its power to reduce threats in the international supply chain.This should result in improved relations with business partners, customs administrations and, most importantly, existing and new customers
Under the Union Customs Code (UCC), a waiver for the new financial guarantee requirement for suspended duty is granted to AEO certified businesses. Non-AEO businesses are required to secure financial guarantees, often at a significant cost to the business. With the level of guarantees required potentially set to increase post-Brexit, due to additional duty payable on movements of goods from and to the 27 EU countries, this is potentially a very valuable benefit to importers to, and exporters from, the UK.
The AEO status of a business is also recognized by other countries, where ‘Mutual Recognition Agreements’ have been signed. The UK’s objective is to reach Mutual Recognition with all countries with a similar scheme, including the EU post-Brexit.Mutual Recognition means customs administrations agree to:Recognise accreditations issued under each other’s jurisdiction. Provide reciprocal benefits to AEOs in such jurisdictions.