The Authorized Economic Operator (AEO) Scheme is a trade facilitation scheme for ease of doing business in light of 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 particular period
after that it is to be renewed.
There are 3 tiers of certification in the new AEO Certification program.
For businesses in importing & exporting there are three tiers providing varying levels of benefits:
- AEO T1 – It is verified based on document submission only
- AEO T2 – Along with T1 Compliance, document verification, and onsite verification is also done
- AEO T3 – For AEO T2 owner who has enjoyed the position for 2 years only based on document verification & for AEO (Authorized Economic Operator) T2 holders who have not enjoyed the status or have introduced major business changes, the applicant is subjected to physical verification.
- AEO LO – There is document verification and onsite verification which is done considered for logistics providers, custodians or terminal operators, customs brokers, & warehouse operators there
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.
Any business entity involved in the international supply chain carrying out custom related activities can apply for AEO status under the AEO Programme, including:
- Exporters and importers.
- Logistic providers such as airlines, carriers, freight forwarders, etc.
- Custodians or terminal operators.
- Customs house agents.
- Warehouse operators.
- Port operators, authorized couriers, stevedores, etc.
The businesses not involved in customs-related activities or work are not eligible to apply for AEO status. In general, insurance companies, banks, consultants, etc., are ineligible for AEO status.
Eligibility:
- The business entity must be established in India.
- The business must be involved in customs-related activities.
- The business must have handled a minimum of 25 customs documents, i.e. either shipping bills or bills of entry in the last financial year.
- The business must be carrying out customs-related activity for at least the last three financial years.
- The business should not be issued with a show-cause notice during the last three financial years involving forgery, fraud, clandestine removal of excisable goods, outright smuggling, or cases where the service tax is collected but not deposited with the government.
- The business must be financially solvent during the last three financial years preceding the date of application for AEO status.
- The business must have appropriate internal measures and controls to ensure the security and safety of the business and its supply chain.
- The business must have a system of managing commercial and transport records.
