The Certificate of Authorized Economic Operator (AEO) is equivalent to a Green Channel Pass for International Customs Clearance. India became member to AEO in 2011.
So far, Indian Customs has achieved AEO mutual recognition with 8 foreign economies and 59 foreign countries/regions, enabling India’s AEOs to enjoy the benefits granted by the countries/regions which signed AEO Mutual Recognition Arrangements/Agreements (MRAs) with India, including lower inspection rate, simplified examination of documents and designated Customs Coordinators to solve specific problems in the process of customs clearance.
Increased attractiveness
As the AEO programme is rather new and still being perfected. But companies are already getting benefits. For example, some have reduced transaction operating times and saved trading costs. The overall time for import clearance has decreased to 66 hours for DPD Facilitated (Advance) Vs. DPD Non-Facilitated (Normal) from 220 Hrs.
Who may be accredited?
AEOs may include…. manufacturers, Importers,
Exporters, Custom Brokers, Carriers, Consolidators, Port, Airport, Warehouse,
Terminal operators, Freight forwarder etc.
What is need of AEO?
The increasing threat of international terrorism and organized cross-border crime requires the enhancement of existing border and frontier controls. Responding to such global security concerns, the World Customs Organization had adopted the SAFE Framework of Standards (SAFE FoS) in 2005 to Secure and Facilitate Global Trade. AEO is such a unique instrument ushered in modern supply chain security standards and heralded the beginning of a new approach to the end-to-end management of goods moving across borders while recognizing the significance of a closer partnership between Customs and business.
Authorized Economic Operator (AEO) programme is widely acknowledged as a key driver for a solid Customs-Business Partnership; secure, transparent and predictable trading environment etc. Even though the AEO concept was originally driven by security, it has grown to address risks and compliance in other areas as well, such as revenue assurance. For example: A Customs officer has to tackle emerging risks at borders, including narcotic traffic, fake medicines and counterfeits that threaten the health and safety of citizens, and environmental crime. It is imperative to fight against organized crime and terrorist threats. In such regards, AEO helps Customs and the trade to find the right balance between security and trade facilitation, and ensure that, in times of stringent situations, limited resources are focused on high-risk cargo.
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