Authorized Economic Operator

Authorized Economic Operator (AEO) Certificate

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Authorized Economic Operator (AEO) Certificate

Circular no. 33/2016-Customs dated 22nd July, 2016 has merged two facilitation scheme namely ACP (Accredited Client Programme) and AEO (Authorized Economic Operator) into a combined three-tier AEO programme. Under the new AEO programme, the importer and exporter are being issued a certificate based on three-tier certification i.e. AEO-T1, AEO-T2 and AEO-T3, however, economic operator other than importer and exporters are given only one tier certification i.e. AEO-LO. In this article, we look at the various aspects of the Authorized Economic Operator (AEO) Certificate in detail.

Benefits Of AEO-T1 Certificate

The AEO-T1 certificate is granted only to the importer or the exporter on the fulfilment of the required criteria. Following are the list of benefits available to the importer or the exporter if an AEO-T1 certificate has been granted to them –

  • The main benefit accrued with the AEO-T1 certificate is surety of shorter cargo release time. The consignment of the importer or exporter having AEO-T1 certificate would receive the high level of facilitation in imports and exports.
  • There would be a grant of separate space, wherever possible, earmarked in the Custodian’s premises.
  • Facility of direct port delivery (i.e. DPD) would be available in case of import containers based on the volume of their import trade in terms of the number of containers.
  • Facility of direct port entry (i.e. DPE) would be available in case of export containers based on the volume of their export trade in terms of the number of containers.
  • ID cards would be allotted to the authorized personnel of AEO-T1 holder in order to facilitate hassle-free entry to Customs House, CFS and ICD.
  • The person holding AEO-T1 certificate would have the facility to provide 50% less bank guarantee as compared to others. However, it must be noted that the facility of less bank guarantee would not be available in case the competent authority has ordered furnishing of bank guarantee in case of provisional release of seized goods.
  • Facility of fast completion, within a period of 6 to 9 months, of investigation relating to indirect tax cases would be available. Further even in case of dispute resolution cases would be taken up fast preferably within 6 months.
  • The AEO-T1 holder will not be subjected to regular transactional PCA (i.e. post-clearance audit). Onsite PCA would be conducted once in two years only.
  • Facility of 24/7 clearance at all the seaports and airports can be made available. Further, the holder of the AEO-T1 certificate is not required to pay Merchant Overtime Fee.
  • Arrival and/or departure of the vessel carrying the consignment of AEO-T1 holder would be informed through an e-mail.

Benefits Of AEO-T2 Certificate

The AEO-T2 certificate is granted only to the importer or the exporter on the fulfilment of required criteria. Following are the list of benefits available to the importer or the exporter if the AEO-T2 certificate has been granted to them –

  • The holder of the AEO-T2 certificate would be given a higher level of facilitation in the import and export of their consignments.
  • At the time of seal, verification/scrutiny of documents by the customs officers would be waived. Further, consignment would be given out of charge or let export order without any scrutiny.
  • In case the container of AEO-T2 certificate holder is selected for scanning, the same would be scanned by giving front-line priority treatment.
  • The Bill of entry or shipping bill if selected by the officer the same would be processed on the priority basis.
  • AEO-T2 certificate holder will have the facility of self-sealing of export goods without the requirement to seek case to case permission from the authority.
  • The person holding AEO-T2 certificate would have the facility to provide only 25% of bank guarantee as compared to others. However, it must be noted that the facility of less bank guarantee would not be available in case the competent authority has ordered furnishing of bank guarantee in case of provisional release of seized goods.
  • They have a facility that they can paste the MRP stickers at their premises.
  • The AEO-T2 holder will not be subjected to regular transactional PCA (i.e. post-clearance audit). Onsite PCA would be conducted once in three years only.
  • They have the facility of submitting a paperless declaration and there is no requirement of any supporting documents in physical form.
  • The refund/rebate relating to indirect taxes of the AEO-T2 certificate holder would be granted within a period of 45 days.
  • They have the opportunity of trade facilitation by a foreign customs administration with whom India enters into a Mutual Recognition Agreement.
  • A Client Relationship Manager would be appointed by all the customs houses and they would act as a voice of AEO-T2 holder within the customs in relation to legitimate concerns and issues of AEO.

Benefits Of AEO-T3 Certificate

The AEO-T3 certificate is granted only to the importer or the exporter on the fulfilment of required criteria. Following are the list of benefits available to the importer or the exporter if an AEO-T3 certificate has been granted to them –

  • The holder of an AEO-T3 certificate would be the given higher level of facilitation in import and export of their consignments, even more than AEO-T2 holder.
  • AEO-T3 certificate holder will have the facility that their containers will not be selected for scanning except on the basis of specific intelligence. In case the container is selected for scanning, the topmost priority would be given for the same.
  • Assessing/examination by the Customs officer would be done on the self-certified copy of documents and there will not be need of original documents.
  • The person holding AEO-T3 certificate are not required to submit any bank guarantee. However, it must be noted that the facility of no bank guarantee would not be available in case the competent authority has ordered furnishing of bank guarantee in case of provisional release of seized goods.
  • The refund/rebate relating to indirect taxes of the AEO-T3 certificate holder would be granted within a period of 30 days.
  • On request, they will be provided on-site inspection/examination.

Benefits Of AEO-LO Certificate

The AEO-LO certificate is granted to all the economic operator other than the importer and the exporter on the fulfilment of required criteria. Following are the list of benefits available to the different economic operator if AEO-LO certificate has been granted to them –

Benefits available to Logistic Service Provider

  1. Facility of waiver of bank guarantee in case of trans-shipment of goods under Goods Imported (Conditions of trans-shipment) Regulations, 1995;
  2. Facility of exemption from the permission on case to case basis in case of transi of goods;
  3. Facility of execution of running bond.

Benefits available to Custodians or Terminal Operators

  1. Facility of wavier of bank guarantee under Handling of the cargo in Customs Area Regulations, 2009;
  2. Facility of extension for the period of 10 years for approval of custodians under regulation 10 (2) of the Handling of cargo in Customs Area Regulations, 2009.

Benefits available to Customs Brokers

  1. Facility of waiver of bank guarantee to be furnished under regulation 8 of the CBLR, 2013;
  2. Facility of extension of validity of licenses, till the validity of AEO status, granted under regulation 9 of the CBLR, 2013;
  3. Facility of waiver from the fee for renewal of license required under regulation 11 (2) of CBLR, 2013.

Benefits available to Warehouse Operators

  1. Facility for faster approval of new warehouse within a period of 7 days;
  2. Facility of waiver of antecedent verification envisaged for grant of license for warehouse;
  3. Facility of waiver of solvency certificate;
  4. Facility of waiver of security for obtaining an extension in the warehousing period;
  5. Facility of waiver of security required for warehousing of sensitive goods.

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