AEO is a 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.
Under this programme, an entity engaged in international trade is approved by Customs as compliant with supply chain security standards and granted AEO status & certain benefits.
India’s AEO Programme is in sync with the commitments made under Article 7.7 of WTO TFA.
The Indian AEO Programme is implemented vide CBIC Circular 33/2016 – Customs dated 22.07.2016, as amended & Circular 26/2018- Cus dated 10.08.2018, which provides the statutory framework for the AEO programme.
The circular provides for a three tier AEO Status for Exporters and Importers. The three tiers are AEO T1, AEO T2, AEO T3, where AEO T3 is the highest level of accreditation.
All three tiers provide for varying and incrementally increasing level of facilitation to the status holder.
There is one more category of AEO- LO that covers all other entities in the supply chain other than the importers and exporters.
The Circular 33/2016 – Customs was amended by the Circular 03/2018 – Customs dated 17.01.2018. Amendment Circular 03/2018 – Customs has further liberalized, simplified and rationalized the AEO accreditation process so as to promote Ease of Doing Business and to emulate global best practices.
Recently, the AEO T1 processing was rationalized via new circular 26/2018 – cus. The present circular has cut down on the Annexure required for AEO T1 certification from earlier 7 to the present 2. The present circular has not just rationalized the AEO T1 processing by taking away redundancy in earlier processing but it has also made more thorough certain key compliance requirements. For that, the new circular has relied upon the latest SAFE framework 2018 edition and best practices from domestic AEO Programme of different customs administrations.
Apart from the above changes, the new circular has completely decentralised the processing of AEO T1. In the present the setup, the AEO T1 file can be approved at the Customs Zonal level. This has completely eliminated the time that was wasted in transit of application from zonal offices to DIC (AEO HQ).
In effect, the present AEO processing has not just been simplified but is also comprehensively aligned to security requirements as provided in the latest SAFE Framework.
Indian Customs has collaborated with several foreign customs administrations to align with their Authorized Economic Operator Programmes, which effectively allows Indian Customs to internationalize the core principles of the program and provide benefits to Indian trade at the international level. Indian Customs has signed two Mutual Recognition Agreements with the Customs Administrations of South Korea and Hong Kong. Couple of MRAs are in final stages of conclusion, they include MRA(s) with United States of America and Taiwan. Apart from this, India is constantly looking for partners abroad to enhance its MRA partners so as to contribute positively to the global trade. To that effect, Indian Customs is already in process of discussions with UAE, Uganda and Philippines, to finalize the draft Joint Action Plan (JAP). JAP acts the broad framework of timeline and actions that needs to be completed in phased manner to conclude an MRA. Indian Customs has already conveyed the draft JAP to these three Customs Administration for their comments. Lastly, Indian Customs has also taken up a proactive approach to MRA and hence sent ‘Expression of Interest’ to major South East Asian Country with which India has gradually increasing trade relations.
To read more about the scheme including process of applying, read our publication: AEO Programme
