Authorized Economic Operator (AEO)

AEO - Tier 1, Tier 2, Tier 3

Overview

AEO is a voluntary compliance programme under the aegis of the World Customs Organization (WCO) SAFE Framework of Standards to secure and facilitate Global Trade. The programme aims to enhance international supply chain security and facilitate movement of legitimate goods. The programme uses a ‘trust but verify’ approach with the trade community.

To apply to the programme, a prospective AEO certificate holder submits basic company information and a security profile as per the annexure in the circular.

The AEO team checks on the company in terms of its general compliance, legal compliance, management of commercial and transport records, financial solvency and safety, and evaluates safety and security with respect to procedural security, premises security, cargo security, conveyance security, personnel security, business partner security, IT security and security training and threat awareness. The AEO team conducts an onsite visit of domestic facilities to confirm the security practices are in place and operational in case of higher certification levels. Efficient and compliant businesses are certified into the programme.


Process

There are multiple tiers of certification in the new AEO Programme. For importers and exporters there are three tiers providing varying levels of benefits:

  • AEO T1 – verified on the basis of document submission only. At present, it is fully web-based.

  • AEO T2 – in addition to document verification, onsite verification is done.

  • AEO T3 – in addition to document verification, onsite verification is done and accreditation of all business partners is required.

  • AEO LO (for logistics providers, custodians or terminal operators, Customs brokers and warehouse operators there is only one tier) - in addition to document verification, onsite verification is done.


General Benefits

  1. Eligible for 24 x 7 cargo clearance at all sea ports and air ports.

  2. Inclusion of Direct Port Delivery of imports to ensure just-in-time inventory management by manufacturers – clearance from wharf to warehouse for AEO T1, T2 and T3.

  3. Inclusion of Direct Port Entry for factory stuffed containers meant for export by AEOs for AEO T1, T2 AND T3.

  4. Provision of Deferred Payment of duties – delinking duty payment and Customs clearance for AEO T2 and AEO T3.

  5. Benefits of Mutual Recognition Agreements with other Customs Administrations for AEO T2 and AEO T3.

  6. Fast tracking of adjudications and refunds including IGST refunds and disbursal of drawback.

  7. Priority in processing and clearance of goods.

  8. Tier-based bank guarantee waivers.

  9. Designated Client Relationship Managers at each port to facilitate AEO certificate holders.

  10. Self-declaration of Standard Input-Output Norms (SION) AEO exporters in cases where SION is not notified.


Benefits associated with AEO T1:

  1. High facilitation

  2. DPD / DPE

  3. 25% Bank Guarantee

  4. Expedited investigation-dispute resolution

  5. On request 24 x 7 at all sea-ports and airports

  6. OSPCA once a year

  7. ID cards / Space in warehouse

  8. Email on arrival / departure


Benefits associated with AEO T2:

  1. All facilities of Tier I PLUS

  2. Higher facilitation

  3. Deferred duty payment

  4. MRA benefits in other countries

  5. Waiver of seal verification

  6. Priority in scanning / assessment

  7. 10% Bank Guarantee

  8. On-site inspection/stickers

  9. Refund / rebate in 45 days

  10. Faster drawback

  11. Client Relation Manager

  12. OSPCA in 2 years


Benefits associated with AEO T3:

  1. All facilities of Tier II PLUS

  2. Highest facilitation

  3. Scanning only on intelligence

  4. Reliance on self-certified copies

  5. No Bank Guarantee

  6. Risk based intervention by other departments

  7. Refund / rebate in 30 days

  8. OSPCA in 3 years


Eligibility

Anyone involved in the international supply chain that undertakes Customs related activity in India can apply for AEO status irrespective of size of the business. These may include Exporters, Importers, Logistic Providers (Eg. Carriers, Airlines, Freight Forwarders etc.), Custodians or Terminal Operators, Customs House Agents and Warehouse Owners, Others who may qualify include Port Operators, Authorized Couriers, Stevedores.

AEO-Eligibility Criteria for an entity:

  • Handled 10 documents (Shipping Bill & Bills of Entry) in last financial year, subject to handling at least 5 documents in each half year period of the preceding financial year.

  • Should Undertake Customs Related Work.

  • Be a part of international supply chain.

  • AEO can only be given to legal entity and not Group Company.

  • Have had business activity for two financial years (can be waived in deserving cases).

AEO - Logistic Operator (LO)

Introduction

AEO-LO Certificate - This certificate may be granted to categories of economic operators other than importers and exporters, namely Logistics Providers, Custodians or Terminal Operators, Customs Brokers and Warehouse Operators.

If the claims made in this regard in information and documents submitted by the applicant have been physically verified by the AEO Programme Team by visiting the concerned places / premises of the applicant, on the dates decided by mutual consent by the team and the applicant, and found to be true to the satisfaction of the AEO Programme Manager.

Benefits

  1. Logistic Service Providers:

  • Waiver of bank Guarantee in case of trans-shipment of goods under Goods imported (Condition of Trans-shipment) Regulations, 1995.

  • Facility of Execution of running bond.

  • Exemption from permission on case to case basis in case of transit of goods.

In case of international transhipped cargo (Foreign to Foreign), for the pre-sorted containers wherein Cargo does not require segregation, ramp to ramp or tail to tail transfer of cargo can be affected without Customs escorts.

  1. Custodians or Terminal Operators:

  • Waiver of bank Guarantee under Handling of cargo in Customs Area Regulations 2009.

  • Extension of approval for custodians under regulation 10(2) of the 'Handling of cargo in Customs Area Regulation 2009 for period of 10 years.

  1. Customs Brokers:

  • Waiver of Bank Guarantee to be furnished under regulation 8 of the CBLR, 2013.

  • Extended validity (till validity of AEO status) of licenses granted under regulation 9 of the CBLR 2013. System Manager to incorporate date of validity of AEO from time to time in the System Directory.

  • Waiver from fee for renewal of license under sub regulation (2) of regulation 11 of CBLR, 2013.

  1. Warehouse Operators:

  • Faster approval for new warehouses within 7 days of submission of complete documents.

  • Waiver of antecedent verification envisaged for grant of license for warehouse under circular 26/2016.

  • Waiver of solvency certificate requirement under circular 24/2016.

  • Waiver of security for obtaining extension in warehousing period under circular 21/2016.

  • Waiver of security required for warehousing of sensitive goods under circular 21/2016.