Authorised Economic Operator (AEO)
Any legal entity involved in activities covered by customs legislation and forming part of the international supply chain can apply for AEO status. If you are involved in any part of the international supply chain you can apply for AEO status, regardless of the size of your business, but AEO status will not necessarily be cost-effective for all businesses.
The 3 types of AEO available are:
- Customs Simplifications;
- Security and Safety; or
- Combined Types 1 and 2.
Type 1 (Customs Simplifications) is specifically an EU addition and holders will not benefit from the current and anticipated international agreements. Most applicants in most countries are choosing Type 3 from the outset. The Customs Simplifications AEO certificate is issued to any business that meets the specified criteria in the areas of customs compliance, record-keeping standards and financial solvency.
Type 2 (Security and Safety AEO) is issued to any business that meets all of the above criteria and also maintains appropriate security and safety standards.
Type 3 (Combined AEO) is available to any business which meets all the relevant criteria for both types of certificate and which wants to receive the benefits of both types of AEO.
AEO status will also provide for international mutual recognition, within the context of international customs agreements such the EC-US cooperation agreement on container security and the WCO SAFE framework. Holders of AEO authorisations Types 2 and 3 can now apply for mutual recognition under the equivalent US programme, C-TPAT. US operators under C-TPAT can also apply for mutual recognition under EU AEO. This extends the benefits of safety and security authorisations.
The benefits of AEO authorisation are:
- Helps the customs authorities in identifying which consignments may be given less attention (Risk profiling, Fast-Track);
- AEOs may also benefit from fewer physical and document-based controls and will get priority treatment if selected for control. They will be able to request a specific place for any such control;
- Quicker authorisation process for certain customs procedures;
It is likely that authorisation for some customs procedures and simplifications will be contingent on successful application for Type 1 or 3 AEO status.
- In addition companies holding AEO authorisation may use the AEO kite mark, which may be of benefit as a marketing aid. In some cases, overseas governments, agencies, banks and Chambers of Commerce may advise their clients to seek an AEO authorised company as their first choice when seeking a new trading partner in the EU.
4 Eyes Ltd can assist clients in deciding whether AEO will be of benefit to them. We will also support you in gathering the necessary information and designing/implementing appropriate procedural and record-keeping enhancements. We can help with the submission of applications and with discussions with HMRC before and during the application process.