AEO Scheme is a program under the guidance of the World Customs Organization (WCO), SAFE Framework of Standards to secure and facilitate trade globally. An AEO is a business entity involved in the international movement of goods requiring compliance with provisions of the national Customs law and is approved by or on behalf of the national administration in compliance with World Customs Organization (WCO) or equivalent supply chain security standards. The security standards are detailed in the World Customs Organization Safe framework of standards [WCO SAFE FoS], which is the basis of the Indian AEO certification. There are 3 tiers of certification in the new AEO certification program. For business in importing & exporting there are three tiers providing varying levels of benefits:
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:
A Starting point for an AEO certification process is the document and standard operating procedures (SOP) for safety and security plans, and process map for movement of goods in international trade. ASC can help in documenting the process of international trade in the form of SOPs as the first step toward an organizational effort to formalize an AEO certification.
ASC follows end to end approach for obtaining AEO Status right from the planning and readiness assessment stage till getting the final approval of AEO status in the following ways:
No. the AEO scheme is an optional scheme. However, acquiring AEO status helps avail multiple benefits to the AEO status entity.
For AEO-T1 and AEO-T2 entities, the validity of AEO certification is 3 years whereas, for AEO-T3 and AEO-LO entities, the validity period is 5 years. However, from 1st August 2019, CBIC has done away with the renewal requirements of AEO certification for T1 entities. From 1st August 2021, all the entities certified on or after 1st April, 2019 shall get auto-renewed without any end date by the system.
As per Rule 4 of Deferred Payment of Import Duty Rules, 2016, for availing of the deferred payment of duty facility, an eligible importer shall intimate its intent to the jurisdictional Principal Commissioner of Customs and get itself registered on the ICEGATE. This shall also be applicable for AEO.
Facilitation benefits can be availed of by Indian AEOs in countries with which India has signed Mutual Recognition Agreement (MRA).
Yes. AEO T1 / T2 / T3 entities are entitled for DPD / DPE facilities by applying for DPD permission to the concerned Chief Commissioner and registering themselves with the port authorities for the DPD facility.
Mutual Recognition Agreements / Arrangements (MRA) are bilateral agreements entered between two or more Customs Administrations. MRAs facilitate one business partnership program to recognise the AEO validations of other countries’ programs. It allows extending reciprocal benefits to each other’s AEOs.