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What is Authorized Economic Operator (AEO) Programme: How to register and obtain AEO certificate?
The Authorized Economic Operator (AEO) Programme aims to identify safe and reliable business operators globally. In this blog, learn more about its benefits and the certification process.
To secure revenue collection and promote safe trade across the world, the World Customs Organization (WCO) adopted the SAFE Framework of Standards to Secure and Facilitate Global Trade (SAFE FoS) in June 2005. Under this, the WCO’s flagship Customs-Business partnership programme – the Authorized Economic Operators (AEO) Programme was introduced two years later1.
There are three critical pillars of SAFE –
• Customs to Customs Partnership
• Customs to Business Partnership
• Customers to other Government Stakeholders
The AEO program is one of the core parts of the second pillar. In India, the AEO program is implemented by the Central Board of Excise and Customs (CBEC) based on the security standards established by the WCO SAFE FoS.
There are three critical pillars of SAFE –
• Customs to Customs Partnership
• Customs to Business Partnership
• Customers to other Government Stakeholders
The AEO program is one of the core parts of the second pillar. In India, the AEO program is implemented by the Central Board of Excise and Customs (CBEC) based on the security standards established by the WCO SAFE FoS.
What is the Authorized Economic Operator Programme?
The Authorized Economic Operator Programme aims to secure the global supply chain by identifying safe and reliable business operators and establishing best practices throughout the process. With the establishment of this program, the Customs department shares its responsibility with these identified businesses, while also rewarding them with a number of additional benefits2.
Who is an AEO?
An AEO is a party involved in international movement of goods approved by or on behalf of a national Customs administration, complying with the WCO. This could include exporters, importers, suppliers, customs agents, manufacturers, carriers, ports, terminal operators, warehouses, distributors and freight forwarders.
What is an AEO certificate?
The Government of India developed a three-tier AEO Customs program where importers and exporters are presented with an AEO tier certificate based on their performance. These certificates can be obtained by organizations established in India and involved in international trade like importers, exporters, warehouse operators, cargo agents, carriers, port operators and Custom House Agents (CHAs).
These certificates are issued to the organization as a whole and are applicable irrespective of their location. For this, applicants have to provide their SOP (standard operating procedures) and additional details as required by the department.
These certificates are issued to the organization as a whole and are applicable irrespective of their location. For this, applicants have to provide their SOP (standard operating procedures) and additional details as required by the department.
What are the types of AEO certificates?
Three certification types are issued under the Customs AEO program:
1. AEO-T1 – Certificate is issued based on submitted document verification
2. AEO-T2 – Certificate is issued based on document and onsite verification
3. AEO-T3 – Certificate is only available to those who have had AEO-T2 status for at least two years based on document verification.
1. AEO-T1 – Certificate is issued based on submitted document verification
2. AEO-T2 – Certificate is issued based on document and onsite verification
3. AEO-T3 – Certificate is only available to those who have had AEO-T2 status for at least two years based on document verification.
What is the eligibility for AEO program?
Below are some of the requirements to be a part of the AEO programme3:
• Applicants must be based in India.
• They should have conducted business activities for a minimum of three financial years preceding the date of application.
• Applicants should not have received any show-cause notice relating to forgery, fraud, smuggling, and clandestine goods removals or where goods have been collected but not deposited with the government.
• They should have appropriate internal controls and measures for ensuring business’s safety and security and for smooth management of supply chain.
• Applications should be financially solvent during the last three financial years preceding the application date.
• Applicants must be based in India.
• They should have conducted business activities for a minimum of three financial years preceding the date of application.
• Applicants should not have received any show-cause notice relating to forgery, fraud, smuggling, and clandestine goods removals or where goods have been collected but not deposited with the government.
• They should have appropriate internal controls and measures for ensuring business’s safety and security and for smooth management of supply chain.
• Applications should be financially solvent during the last three financial years preceding the application date.
What are the benefits of AEO programme?
• AEO-T1 status holders benefit from 24/7 cargo clearance, earmarked space for custodians’ premises, exemption from payment of merchant overtime fee and facility of Direct Port Delivery (DPD) for import and export purposes.
• As for T2 and T3 AEO custom certificate holders, they get additional benefits like timely grant of refund/rebate of indirect taxes facility for deferred customs duty payment, exemption from submission of bank guarantee and the ability to paste MRP stickers in their premises.
• As for T2 and T3 AEO custom certificate holders, they get additional benefits like timely grant of refund/rebate of indirect taxes facility for deferred customs duty payment, exemption from submission of bank guarantee and the ability to paste MRP stickers in their premises.
What are the documents required for AEO Programme registration?
Some of the mandatory documents required are4:
• 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
• 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
What is the AEO Programme registration process?
Following is the process to register with AEO Programme6:
1. Visit the AEO India website and click on registration.
2. Provide the necessary information and register on the website. This is verified basis your IEC on the DGFT portal, so you must use the same contact details.
3. Add the OTP you received.
4. Once you have registered, use your credentials to log in.
5. Click on the respective AEO tier form and fill out the application and annexures, along with the required documents.
6. Submit your application. In the Update Verification section, you can check the status of your AEO application.
1. Visit the AEO India website and click on registration.
2. Provide the necessary information and register on the website. This is verified basis your IEC on the DGFT portal, so you must use the same contact details.
3. Add the OTP you received.
4. Once you have registered, use your credentials to log in.
5. Click on the respective AEO tier form and fill out the application and annexures, along with the required documents.
6. Submit your application. In the Update Verification section, you can check the status of your AEO application.
Similar to the AEO programme, the Government of India and worldwide organizations have introduced many export incentive schemes and processes to make international trade simpler for exporters. With e-commerce exports gaining awareness and popularity, Indian exporters are now able to sell internationally and expand their businesses without setting up physical stores or warehouses abroad.
Amazon Global Selling: Your #ExportsKaPassport
As an e-commerce exports program, Amazon Global Selling enables Indian sellers and MSMEs to take their products from India to international marketplaces across 200+ countries and territories. From simple registration to attractive listing and hassle-free shipping, Amazon Global Selling offers international tools and solutions, enabling sellers to reach over 300 million customers.
More blogs on export schemes
Frequently Asked Questions
What is the validity of an AEO certificate?
The validity of each AEO certificate is:
• AEO-T1 – 2 years
• AEO-T2 – 3 years
• AEO-T3 – 5 years
• AEO-LO – 5 years
• AEO-T1 – 2 years
• AEO-T2 – 3 years
• AEO-T3 – 5 years
• AEO-LO – 5 years
Who is not eligible for AEO certification?
Customs AEO certificates are available only for businesses – MSMEs and SMEs involved in international trade and not for individuals. Any business that doesn’t import or export goods or is not related to the export procedure and documentation will not be eligible for an AEO certification.
What’s the difference between an AEO and an export house certification?
Star Export House scheme is available for those excelling in international trade that has contributed to the Indian Government by bringing in valuable foreign exchange. AEO certifications are divided into four categories, whereas export house certification has five different types. The validity of AEO-T1 and AEO-T2 is for three years, whereas export house certification extends for five years irrespective of the level.
What is the time limit for the renewal of an AEO certificate?
The renewal application of AEO-T1 must be submitted at least a month before the validity expires. As for AEO-T2, it must be at least 60 days and for AEO-T3 and AEO-LO must be before at least 90 days of lapse of validity respectively.
Can an AEO certificate be issued to a group of companies?
AEO certificate is issued entity-wise. Businesses are required to apply for each branch separately.
Published on July 29, 2022.
Sources:
1. http://www.wcoomd.org/en/topics/facilitation/instrument-and-tools/frameworks-of-standards/safe_package.aspx#:~:text=In%20June%202005%20the%20WCO,to%20promote%20trade%20facilitation%20worldwide.
2. https://www.cbic.gov.in/resources//htdocs-cbec/FAQs-(AEO)-1903.pdf;jsessionid=A51B8A2862F3336D7D272FA00D224087
3. https://www.cbic.gov.in/resources/htdocs-cbec/AEO-fact-sheet-2.pdf
4. https://www.indiafilings.com/learn/benefits-of-authorized-economic-operator-aeo-certificate/
5. https://www.cbic.gov.in/htdocs-cbec/FAQs-(AEO)-1903.pdf
6. http://www.wcoomd.org/-/media/wco/public/global/pdf/topics/facilitation/instruments-and-tools/tools/safe-package/aeo-implementation-guidance.pdf?la=en
7. https://afleo.com/learn/aeo-certification-process/
8. https://www.aeoindia.gov.in/
Sources:
1. http://www.wcoomd.org/en/topics/facilitation/instrument-and-tools/frameworks-of-standards/safe_package.aspx#:~:text=In%20June%202005%20the%20WCO,to%20promote%20trade%20facilitation%20worldwide.
2. https://www.cbic.gov.in/resources//htdocs-cbec/FAQs-(AEO)-1903.pdf;jsessionid=A51B8A2862F3336D7D272FA00D224087
3. https://www.cbic.gov.in/resources/htdocs-cbec/AEO-fact-sheet-2.pdf
4. https://www.indiafilings.com/learn/benefits-of-authorized-economic-operator-aeo-certificate/
5. https://www.cbic.gov.in/htdocs-cbec/FAQs-(AEO)-1903.pdf
6. http://www.wcoomd.org/-/media/wco/public/global/pdf/topics/facilitation/instruments-and-tools/tools/safe-package/aeo-implementation-guidance.pdf?la=en
7. https://afleo.com/learn/aeo-certification-process/
8. https://www.aeoindia.gov.in/
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