Authorized Economic Operator Programme (AEOP)

INTRODUCTION

• CBEC vide Circular No. 33 dated 22.07.2016 decided to merge two facilitation schemes (1) Accredited Clients Programmer (ACP); (2) Authorized Economic Operator (AEO)
• Now it is a combined three-tier AEO programmer
• To benefit and facilitate trade i.e., import and export
• Faster customs clearance and simplified procedures
• To bestow a secure status to the entity involved (internationally recognized)
• Simplified compliance regime
• In view of the midterm review of Foreign Trade Policy in 2018, additional benefits Extended to AEO’s
• CBIC vide Circular No. 3 / 2018 – Customs dated January 17, 2018, has made requisite modifications in Circular No. 33 of 2016
• Decided to maximize the reach of the programmer for trade facilitation and ease of doing business
• AEO application processing decentralized
• CBIC vide Circular No. 26 / 2018 - Customs dated August 10, 2018, has simplified and rationalized the process of AEO-T1 Application(s)

BENEFITS UNDER Authorized Economic Operator Programme (AEOP)

• Direct Port Delivery of Import /export Containers depending on the volume of trade
• Higher Level of Facilitation, faster customs clearance and simplified customs procedures
• Priority scanning for containers
• The facility of deferred payment of duty
• Faster disbursal of drawback amount
• Faster processing of bill of entries
• Faster completion of Special Valuation Branch proceedings in case of related party imports
• Less amount for Bank Guarantee (50% or 25% as against the usual value)
• Facility to paste MRP stickers in own premises
• Onsite PCA instead of regular PCA
• ICEGATE Access for consolidated data of import and export
• Paperless declarations with no supporting documents in physical form
• Nominated Client Relationship Manager as a single window of interaction
• Faster processing of refund/rebate of duty (minimum of 45 days of submission of documents)

TYPES OF CERTIFICATION AND VALIDITY

• AEO-Tier-1 Certificate (three years)
• AEO-Tier 2 Certificate (three years)
• AEO-Tier 3 Certificate (five years)
• AEO-LO [only for economic operators i.e., logistics, customs agents/custodians or terminal operators/warehouse operators] (valid for five years)

 

The category of AEO Certificate is linked to the benefits attached to such certificate

ELIGIBILITY CRITERIA

• Applicant must be involved in the international supply chain
• Should undertake customs related activity in India i.e., import or export
• Must be an incorporated entity with a valid certificate of registration
• Must provide evidence regarding :
  • Places and warehouses where it handles goods
  • Supply chain information
  • Existence for not less than the past 3 years with own accounts
  • Not less than 25 transactions in a financial year (leniency for MSMEs)
  • Possession of ICEGATE Login to avail benefits under the AEOP

PROCEDURE

• Eligible applicant to comply with the following requirements of AEOP:
  • Legal
  • Managerial, Commercial and Transport
  • Financial Solvency
  • Safety and
  • Security
• Application to be in the prescribed form with :
  • security plan
  • process map
  • site plan
  • self-assessment form
• Information and documents of the applicant to be scrutinized and assessed for grant of AEO certificate
• Physical verification by competent authority to ensure compliances
• Some important indicators to be checked during an inspection:
  • Information on customs matters
  • Remedial action taken on previous customs errors
  • Accounting/logistics systems
  • Internal controls and procedures
  • Flow of cargo
  • Use of custom house agents
  • security of IT and documents
  • logistics process and
  • Storage of goods.
• Report prepared within 60 days of completion of inspection/verification
• Report may contain a recommendation to the AEO Programs Manager
• Applicant informed status of AEO certificate within 30 days of recommendation
• In case AEO certificate granted, it is activated within a week
• AEO certificate is valid for a period of 3 years (for AEO-T1 & AEO-T2 Certificate)
• AEO-T3 – the validity is for five years
• Renewal within 60 days of expiry
• Renewal subject to fulfilment of the requirements/compliances

CONDITIONS & COMPLIANCES

Legal Compliances

• No SCN issued to the applicant during last three financial years involving :
  • fraud
  • forgery
  • outright smuggling
  • clandestine removal of excisable goods or
  • Service Tax collected but not deposited to the Government
• No case where the prosecution has been launched or contemplated against the applicant or its senior management

Managerial, Transport Records and Financial Solvency

• Maintaining accounting system consistent with Generally Accepted Accounting Principles (GAAP) / International Financial Reporting Standards (IFRS) which facilitates audit-based Customs control
• Having an administrative set up which corresponds to the type and size of business and which is suitable for the management of the flow of goods
• Have internal controls capable of detecting illegal or irregular transactions;

Managerial, Transport Records and Financial Solvency

• Satisfactory procedures for the handling of import/export licenses and authorizations
• Satisfactory procedures for archiving the company’s records and information
• Adequate protection against loss of information
• Employees trained to inform Customs whenever compliance difficulties are discovered
• Establish suitable contacts to inform the Customs authorities of such occurrences
• Satisfactory procedures for verifying the accuracy of Customs declarations
• Appropriate IT security measures to protect the applicant’s computer system from unauthorized intrusion and to secure the applicant’s documentation
• Applicant must be financially solvent during the last three financial years