Authorised Economic Operator (AEO) Programme

About Authorised Economic Operator (AEO) Programme

• An AEO is a business entity involved in the international movement of goods requiring compliance with provisions of the national customs law.
• It is approved by or on behalf of the national administration in compliance with the World Customs Organization (WCO).
• The WCO in June, 2005, with a view to secure the international supply chain, adopted the SAFE Framework of Standards (WCO SAFE FoS).
• AEO is one of the three pillars on which the SAFE FoS is formed.
• AEO helps to build a closer partnership between the customs department and the trade industry.
• WCO SAFE FoS is the basis of the Indian AEO programme.
• What is the AEO programme?
  • It was introduced in India by the Central Board of Indirect Taxes and Customs (CBIC)in 2011.
  • It is a voluntary programme administered by the CBIC.
  • It seeks to provide benefits in the form of simplified customs procedures and faster customs clearances to those business entities that offer a high degree of security guarantees regarding their role in the supply chain. 
  • Thus, an entity with an AEO status can be considered a reliable trading partner and a secure trader. 
  • This segmentation approach enables customs resources to focus on less-non-compliant or risky businesses for control.
• Benefits:
  • Direct port delivery in the case of import and direct port entry in case of export;
  • Small and medium scaleentities would be given special focus. It must be noted that any entity handling up to 25 import and export documents annually can become part of the AEO programme;
  • Easy and fast disbursal of the drawback amount;
  • Easy and fast disbursal of refunds and adjudications;
  • Paperless declaration with no supporting documents;
  • Site inspection or examination possible on request;
  • Recognition by partner Government agencies and other stake holders.
• Who can apply for AEO Status?
  • Business entities who are involved in the international supply chain that undertakes customs-related activity in India can apply for AEO status.
  • The business entity can apply for AEO status irrespective of its size.
  • Some of the examples of business entities that can apply for AEO status are importers, exporters, Custom House Agent (CHA), Custodiansor Terminal Operators, etc.

Key Facts about World Customs Organization (WCO)

• WCO, established in 1952, is an independent intergovernmental body whose mission is to enhance the effectiveness and efficiency of customs administrations.
• It is the only intergovernmental organization exclusively focused on customs matters.
• Today, the WCO represents 186 customs administrations across the globe that collectively process approximately 98% of world trade.
• Its work includes the development of global standards, the simplification and harmonization of customs procedures, trade supply chain security, the facilitation of international trade, the enhancement of customs enforcement and compliance activities, anti-counterfeiting and piracy initiatives, public-private partnerships, integrity promotion, and sustainable global customs capacity building programmes.
• It also maintains the international Harmonized System goods nomenclature, and administers the technical aspects of the WTO Agreements on Customs Valuation and Rules of Origin.

Q1: What is the World Trade Organization (WTO)?

WTO is an international organization that promotes and regulates global trade among nations. The WTO was established on January 1, 1995 by replacing the General Agreement on Tariffs and Trade (GATT). It has 164 member countries, representing over 98% of global trade. It is headquartered in Geneva, Switzerland, and operates on a consensus-based decision-making process.

Source: Centre accords AEO status to gem and jewellery sector