AEO
AEO CONSULTANCY
Ampride Legal (Advocates & Consultants) also provides Consultancy services for accreditation of AEO (Authorized Economic Operators) certificate issued by Indian Customs to the industry involving the International supply chain that undertakes Customs related activity e.g. Exporters, Importers, Customs House Agents, Custodians or Terminal Operators, Logistics Service Providers (Carriers/Forwarders) & Warehouse Operators related activities
WHAT IS AEO?
The abbreviation AEO stands for “Authorized Economic Operator.” It is a status granted to an economic operator as a concept that is based on the partnership between customs and business compliance with customs legislation.
The AEO programme enables Customs administration to identify & safe the 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 business for control. Thus the aim of AEO programme is to secure the international supply chain by granting recognition to reliable operators & 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.
AUTHORISED ECONOMIC OPERATOR SCHEME (AEO)
If you want to experience faster and hassle-free international trade, getting an AEO Certification i.e (Authorized Economic Operator Certification) can be of immense help to you. AEO benefits include several import/export privileges and it can also help your business to gain a reputable position in its niche. A growing number of businesses in India are seeking to get their business AEO-Certified as it is being seen as the international standard for doing legitimate trade.
What Exactly Is an AEO Certification?
AEO is a programme under the aegis of the World Customs Organization (WCO) SAFE Framework of Standards to secure and facilitate Global Trade. The programme aims to enhance international supply chain security and facilitate movement of legitimate goods. To maintain legitimacy and transparency in international trade, the World Customs Organization introduced the Authorized Economic Operator (AEO) Certification that is in alignment with its SAFE Framework of Standards.
In India, AEO Certification was implemented in 2011. There are three tiers of AEO Certification for Exporters & Importers in India: AEO T1, AEO T2, and AEO T3. Along with this, there’s also an AEO LO Certification that is given to logistics providers, warehouse operators, etc.
What Are the Benefits of AEO Certification in India? Getting your business AEO Certified can help you experience an unprecedented level of trade freedom. It grants you several import/export benefits; the benefits get greater as you go up the certification tiers.
AEO Registration
Elevate Your Trade Operations
For businesses engaged in importing and exporting, we provide Authorized Economic Operator (AEO) Registration services. This exclusive designation comes in various tiers, each offering distinct benefits:
AEO T1: Verification based on document submission.
AEO T2: Building on T1 compliance, this level includes document verification and on-site verification.
AEO T3: Designed for AEO T2 holders with a 2-year track record, this tier involves document verification and physical verification for those introducing major business changes.
AEO LO: We also specialize in AEO-LO (Authorized Economic Operator – Logistics) registration. This category encompasses logistics service providers, including Customs Brokers, Freight Forwarders, Terminal Operators, Container Freight Station and warehouse operators. AEO-LO registration entails a thorough evaluation, combining document and on-site verification.
The AEO Certification enables Customs administration to identify the safe and compliant business entity to provide them a higher degree of assured facilitation. This segmentation method enables Customs resources to focus on less non-compliant or risky businesses for control. Thus, the AEO certification intends to secure the international supply chain by permitting recognition to trustworthy 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 numerous additional benefits listed below:
Recognized 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 Agreement/Arrangement.
The Facility of Direct Port Delivery (DPD) of their import Containers and/ or Direct Port Entry (DPE) of their Export Containers.
Remission of complete or partial the Bank agreement requirements,
Waiver of Merchant overtime fees.
Deferred payment of duties.
Waiver from transactional PCA.
Faster disbursement of duty drawback amount through procedure eased out vide Circular 18/2017 Customs dated 29.05.2017
Promoting timely refunds and settlements
Self-certified copies of FTA / PTA origin related or any other certificates required for clearance would be acknowledged
Recognition by Partner Government Agencies and other stakeholders as part of the AEO Registration.
- High facilitation
- DPD/DPE
- BG 50%
- Expedited investigation-dispute resolution
- On request 24 x 7 at all sea-ports and airports
- OSPCA once a year
- ID cards/Space in warehouse
- Email on arrival/departure
- All facilities of Tier 1 Plus
- Higher facilitation
- Deferred duty payment
- MRA benefits in other countries
- Waiver of seal verification
- Priority in scanning/assessment
- 25% BG
- On-site inspection/stickers
- Refund/rebate in 45 days
- Faster drawback
- Client Relation Manager
- All facilities of Tier II PLUS
- Highest facilitation
- Scanning only on intelligence
- Reliance on self-certified copies
- No Bank Guarantee
- Risk based intervention by other departments
- Refund/rebate in 30 days
- OSPCA in 3 years
Benefits for AEO-LO
| 1 | Logistic Service Providers | (a) Waiver of bank Guarantee in case of trans-shipment of goods under Goods imported (Condition of Trans-shipment) Regulations, 1995. (b) Facility of Execution of running bond. (c) Exemption from permission on case to case basis in case of transit of goods. In case of international transshipped cargo (Foreign to Foreign), for the pre-sorted containers wherein Cargo does not require segregation, ramp to ramp or tail to tail transfer of cargo can be effected without Customs escorts. |
|---|---|---|
| 2 | Custodians or Terminal Operators | (a) Waiver of bank Guarantee under Handling of cargo in Customs Area Regulations 2009. (b)Extension of approval for custodians under regulation 10(2) of the ‘Handling of cargo in Customs Area Regulation 2009 ‘for period of 10 years. |
| 3 | Customs Brokers | (a) Waiver of Bank Guarantee to be furnished under regulation 8 of the CBLR, 2013. (b) Extended validity (till validity of AEO status) 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. |
| 4 | Warehouse Operators | (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 (c) Waiver of solvency certificate requirement under circular 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 |
AEO Registration -Eligibility Criteria for an entity.
Eligibility Criteria for AEO Certificate –
Business entities who are involved in the international supply chain that undertakes Customs related activity in India can apply for AEO status. The business entity can apply for AEO status irrespective of its size of the business.
Some of the examples of the business entities that can apply for AEO status are importers, exporters, Custom House Agent (CHA), Custodians or Terminal Operators, etc.
Basic requirements which are mandatory to be fulfilled in order to apply for AEO status are listed below –
Applicant must be established in India.
Applicant should have business activities for at least three financial years preceding the date of application.
The applicant should not have received any show cause notice during the last 3 financial years involving fraud, forgery, outright smuggling, and clandestine removal of goods or cases where tax has been collected from the customer but not deposited with the government.
The applicant should have maintained an accounting system consistent with GAAP (Generally Accepted Accounting Principles) or IFRS (International Financial Reporting Standards).
The applicant should have the satisfactory procedure for verifying the accuracy of Customs documents.
The applicant should be financially solvent during the last three financial years preceding the date of application.
The applicant should have appropriate internal controls and measures to ensure the safety and security of his business and the supply chain.
The building of the applicant must be secure against unlawful entry. Entry for only authorized persons, vehicles and goods must be permitted inside the building of the applicant. In order to keep proper access and safety, the number of entry gates should be minimized.
Validity of AEO Certificate –
AEO-T1 – years (Validity of this certificate is subject to the provisions of the CBIC Circular No. 18/2021 date 31.07.2021
AEO-T2 – 3 years
AEO-T3 – 5 years
AEO-LO – 5 years
Renewal of AEO Certificate –
In order to renew the AEO certificate, an application needs to be submitted before the lapse of validity as detailed below –
AEO-T1 – application must be submitted at lease before 30 days of lapse of validity.
AEO-T2 – application must be submitted at lease before 60 days of lapse of validity.
AEO-T3 – application must be submitted at lease before 90 days of lapse of validity.
AEO-LO – application must be submitted at lease before 90 days of lapse of validity.
Revocation Of AEO Certificate / Status –
Following are the possible situations under which AEO certificate can be revoked –
In case the certificate of AEO status is already suspended and the AEO holder fails to take the appropriate steps within a period of 60 days for withdrawal of suspension;
In case there is a reason to believe that the AEO holder is liable to prosecution and / or is liable to arrest as per provisions of the Customs Act, 1962;
In case a show cause notice being issued to AEO holder involving fraud, forgery, clandestine removal of goods or AEO holder is involved in the case where tax has been collected but the same is not deposited with the Government; and
In case AEO holder himself requests the authority to revoke the certificate.
Documents required
Some of the mandatory documents required are 4 :
- PAN
- IEC
- GST certificate
- MSME certificate
- Previous three years’ audit report
- List of import/export items with respective HSN codes
- Certificate of incorporation
- Standard Operating Procedures (SOP) for safety and security plans of the businesss
