In 2009 the European Union introduced the status of Authorized Economic Operator (AEO). The EU followed an initiative of the World Customs Organization (WCO) to ensure more security and freedom in international trade. The Framework of Standard to Secure and Facilitate Global Trade (SAFE) was introduced to a worldwide framework for a modern and effective risk management of custom’s authorities. One of the aims was to create a concept of Trusted Traders on an international level.
An AEO has to fulfill certain criteria in order to get certified such as…
– customs and tax compliance in the past.
– appropriate record-keeping including transport records.
– financial solvency.
– where relevant, security and safety standards up to grade.
The status of AEO provides advantages in regards to simplified customs procedures. For instance an AEO should be the subject of custom controls less frequently. In reality international trading companies having reached the AEO standard did not experience any perks or relief at all. Most argued that internal effort and expenditure were disproportionate to any benefits.
So, why become an AEO?
The Custom’s world in Europe will change in 2016. The Union Customs Code (UCC) will replace the Community Customs Code (CCC). Major changes will relate to the status as AEO. Various simplifying procedures in regard to import and export will only be granted to AEO. There shall be a reduction of finical guarantees and duty/tax relief schemes. However, the system of self-assessment and centralized clearance will not be implemented before 2021.
There is also another good reason to become an AEO if you are an exporter. There are world-wide efforts to implement the status as Trusted Trader. In Europe there is the AEO and in the USA the certification as a member of the US-Customs-Trade Partnership Against Terrorism (C-TPAT). Other countries are also following similar legal concepts. There is a strong tendency of mutual recognition of certifications and statuses between countries. The EU already has respective agreements of mutual recognition with Switzerland, Norway, Japan and the USA and other countries are sure to follow. It is expected that importers especially from the USA will require their business partners in Europe to be an AEO. European exporters without the AEO status may even damage existing business contacts.
Logistics providers such as transport companies, warehouses and custom agents should also be aspiring to AEO standards and in the future this might also be required by customers as they might have problems in their own accreditation process if their service providers are not AEO.