AEO is a trade facilitation scheme for ease of doing business considering international development, holder of this certificate is entitled for privilege, benefits, exemption, and relaxation on account of import and export. This certificate is issued for a particular period after that to be renewed.
This scheme is based on principle of sharing role and responsibility of customs with trade and industry and objective is to delink payment and clearance, to accept paperless declaration, increases efficiency, self-certification, earliest refund, and drawback, request based examination/inspection etc.
Key Takeaways
- AEO Certification is a globally recognized certification that demonstrates a company’s commitment to compliance, security, and efficiency in the supply chain.
- AEO Certification provides a range of benefits, including faster clearance times, reduced inspection rates, and improved supply chain security.
- Companies that hold AEO Certification are considered low-risk traders, which can lead to increased customer confidence and improved business relationships.
Understanding AEO Certification
Definition and Objectives
The Authorized Economic Operator (AEO) scheme is a program developed by the World Customs Organization (WCO) to secure international supply chains and facilitate trade. The AEO program is a voluntary program that offers benefits to participants who meet certain security standards and comply with customs regulations.
The AEO certification is issued to companies that demonstrate a high level of security and compliance in their supply chain operations.
The objectives of the AEO program are to enhance international supply chain security, promote trade compliance, and facilitate legitimate trade.
The AEO program aims to achieve these goals by establishing a supply chain security framework based on risk management principles. The AEO program provides benefits to participants who meet the security and compliance standards established by the program.
Types of AEO
There are three types of AEO for importers and exporters i.e. AEO T-1, AEO T-2 and AEO T-3. The benefits of each AEO is attached herewith for your reference:
Benefits of certificate under AEO scheme (AEO-T1, T2, T3)
| Benefits | AEO-T1 | AEO-T2 | AEO-T3 |
| Shorter cargo release time | ✅ | ✅ | ✅ |
| Direct Port Delivery (DPD) / or Direct Port Entry (DPE | ✅ | ✅ | ✅ |
| ID to authorized personnel | ✅ | ✅ | ✅ |
| Separate space earmarked in Custodian’s premises. | ✅ | ✅ | ✅ |
| Bank Guarantee only to extent | 50% | 25% | 0.00% |
| Investigations | in six to nine months | Six months | Six months |
| Dispute resolution | within six months. | Six | Six |
| e-mail regarding arrival/ departure of the vessel | ✅ | ✅ | ✅ |
| 24/7 clearances on request at all seaports and airports | ✅ | ✅ | ✅ |
| No Merchant Overtime Fee (MOT) charges need to be paid | ✅ | ✅ | ✅ |
| Waiver of seal verification/scrutiny of documents | ❌ | ✅ | ✅ |
| out of charge/let export order without any scrutiny by the officers | ❌ | ✅ | ✅ |
| Front line of treatment for container scanning. | ❌ | ✅ | No selection for scanning |
| Facility of deferred payment of duty | ❌ | ✅ | ✅ |
| Disbursal of drawback amount | – | within 72 hours of EGM submission | faster |
| Assessment and/or Examination on priority | ✅ | ✅ | ✅ |
| Faster completion of Special Valuation Branch (‘SVB’) proceedings | ❌ | Yes, in time bound manner | ✅ |
| Facility to paste MRP stickers in their premises | ❌ | ✅ | ✅ |
| Post clearance audit | ✅ | onsite PCA will be conducted once in three years only, no regular PCA. | On Intelligence information |
| Access to their consolidated import/export data through ICEGATE | ❌ | ✅ | ✅ |
| Facility of submitting paperless declarations with no supporting documents in physical form | ❌ | ✅ | ✅ |
| Client Relationship Manager” (CRM) at AC/DC level at all port | ❌ | ✅ | ✅ |
Benefits of AEO Certification
AEO Certification is a voluntary program that provides several benefits to companies engaged in international trade. In this section, we will discuss the main benefits of AEO Certification.
Customs Simplifications
One of the primary benefits of AEO Certification is that it allows companies to enjoy customs simplifications. This means that AEO-certified companies can benefit from faster customs clearance times, reduced documentation requirements, and simplified procedures. This can result in significant cost savings for companies that engage in international trade.
Security and Safety Enhancements
Another benefit of AEO Certification is that it provides security and safety enhancements. AEO-certified companies are recognized as safe and secure trading partners, which means that they are subject to fewer security checks and inspections. This can help to reduce the risk of cargo theft, smuggling, and other security-related issues.
International Recognition
AEO Certification is recognized internationally, which means that AEO-certified companies can benefit from increased recognition and credibility in the global marketplace. This can help to enhance a company’s reputation and can make it easier to do business with foreign partners.
In summary, AEO Certification provides several benefits to companies engaged in international trade, including customs simplifications, security and safety enhancements, and international recognition. These benefits can help to reduce costs, improve efficiency, and enhance a company’s reputation in the global marketplace.
Documentation and Compliance
An applicant for AEO-T1, AEO- T2, AEO-T3 and AEO-LO, should submit the application. The application form contains ten annexures. However, an applicant is required to fill-in and submit only those annexures which may be applicable to it, as mentioned below :
| Sr. No.: | Annexure | Subject | Application for grant of | |||
| AEO- T1 | AEO- T2 | AEO- T3 | AEO- LO | |||
| 1 | Annexure-A | Application Form | ✅ | ✅ | ✅ | ✅ |
| 2 | Annexure-B | Security Plan | ✅ | ✅ | ✅ | |
| 3 | Annexure-C | Process Map | ✅ | ✅ | ✅ | ✅ |
| 4 | Annexure-D | Site Plan | ✅ | ✅ | ✅ | ✅ |
| Annexure-E | Self-Assessment Form | |||||
| 5 | Annexure- E.1 | General Compliance | ✅ | ✅ | ✅ | ✅ |
| 6 | Annexure- E.2 | Legal Compliance | ✅ | ✅ | ✅ | ✅ |
| 7 | Annexure- E.3 | Managing commercial and (where appropriate) transport records | ✅ | ✅ | ✅ | ✅ |
| 8 | Annexure- E.4 | Financial Solvency | ✅ | ✅ | ✅ | ✅ |
| 9 | Annexure- E.5 | Safety and Security | ❌ | ✅ | ✅ | ✅ |
| 10 | Annexure-F | Business Partner Details | ❌ | ❌ | ✅ | ❌ |
The AEO Certification Process with Curated Exim
To obtain an AEO Certification, an exporter/importer is required to follow the prescribed procedures and documentation. Considering the fair amount of complexity involved in the matter, we are offering advisory and compliance services with holistic knowledge base and hands-on experience as detailed below:
- Finalisation with Finance / Logistic Team for specifics in resource planning
- Discussion with Finance / Logistics team to finalize on application Annexure A;
- Finalization of floor plan in accordance with the scheme;
- Determining the equipment, inventory / logistics software and manpower requirements after discussion with Finance / Logistics Team;
- Co-ordination with independent external agency to obtain Fire safety certification and similar such certificates; and
- Collation of all documents proposed to be submitted for application of license.
Filing of Application & obtaining licenses
- Review & finalization of application along with pertinent necessary documents;
- Preparation and submission of the Annexures A to E;
- Follow-up and representation with Customs Dept. for obtaining the license; and
- Providing assistance officer during visit by Officer of Customs Dept.
Selecting a Service Provider
When selecting a service provider for AEO certification, companies should consider several factors. Firstly, the service provider should have experience in the AEO certification process. They should be familiar with the requirements and procedures for obtaining AEO certification and be able to guide the company through the process.
Additionally, companies should consider the reputation of the service provider. They should look for a service provider with a proven track record of successfully helping companies obtain AEO certification. Companies can ask for references from the service provider and check online reviews to assess their reputation.
Finally, companies should consider the cost of the services provided by the service provider. They should look for a service provider that offers competitive pricing and transparent pricing policies.
Services Offered
Curated Exim offers a range of AEO Certification services to help companies obtain AEO certification. These services may include:
AEO readiness assessment:
This involves an assessment of the company’s readiness for AEO certification. The service provider will identify any gaps in the company’s processes and procedures and provide guidance on how to address these gaps.
AEO application preparation:
This involves preparing the company’s AEO application. The service provider will help the company complete the application and ensure that all necessary documentation is included.
AEO certification training:
This involves providing training to the company’s employees on the requirements for AEO certification. The service provider will ensure that the employees understand the AEO requirements and can implement the necessary processes and procedures.
AEO certification maintenance:
This involves helping the company maintain its AEO certification. The service provider will provide guidance on how to maintain compliance with the AEO requirements and ensure that the company’s AEO certification is renewed when necessary.
Companies seeking AEO certification in Mumbai or Bangalore to boost their international import and export trading can reach us today
