What is Authorised Economic Operator: Explained

An Authorised Economic Operator is part of the SAFE Framework of Standards to Secure and Facilitate Global Trade for providing status and certificates to businesses that participate in the global network and meet specific criteria. AEO enrollment and certification are becoming increasingly popular in India. The AEO customs certification has become the gold standard for credibility in global trade over the generations.

Did you know?

An Authorised Economic Operator (AEO) is a business entity involved in the international trade of goods requiring compliance with the customs law provisions. It is approved by or on behalf of the national administration in compliance with the World Customs Organization (WCO).

What Is AEO?

Let us look into what is AEO, the most important point to understand. AEO is a trade facilitation plan for the simplicity of doing trade in view of global expansion. The full form of AEO is Authorised Economic Operator. The bearer of this certification is eligible for exports and imports privileges, perks, exemptions, and relaxation. This certification is valid only for a specific time, and the owner must renew it accordingly. The Foundation of this plan is based on the theory of customs sharing its roles and responsibilities with business and commerce, decoupling payment 

and clearing, accepting paper-free declarations, improving productivity, self-certification, earliest reimbursements and drawbacks and as per the request examination/inspection, among other 

things. The former AEO and the new ACP (Accredited Client Program) are integrated into the following certifications: 

• AEO-T1
• AEO-T2
• AEO-T3
• AEO-LO.     

Who Can Apply for AEO Certification?

One can apply for AEO status by companies active in the worldwide supply chain and doing customs-related operations in India. Regardless of the size of the corporate, the commercial enterprise can request AEO status. Customs House Agents (CHA), Janitors, Port Authorities, and people in importing and exporting business are a few examples of business organisations that might seek AEO status.

The following are the basic requirements that one has to complete in case of applying for AEO certification:

• The candidate must have a physical presence in India.
• The candidate must have run a business 3 years before the submission deadline.
• The candidate should not receive any showing reason notices for theft, forgeries, blatant smuggling, furtive movement of products, or incidents, even after collecting the taxes from the client but did not submit it to the government during the previous 3 fiscal years.

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• The candidate must follow GAAP (Generally Accepted Accounting Principles) or International Financial Reporting Standards.
• The candidate must have a sufficient mechanism to determine the validity of customs documentation.
• The candidate must have been stable financially over the previous 3 fiscal years.
• To maintain the safe and secure environment of his\her business and supply chain, the candidate shall implement adequate internal gearshift and safeguard

How to Apply for AEO Certification?

In India, we follow two options for AEO application and certification:

Online Registration - Applicants interested in applying for AEO T1 can log in to this link https://aeoindia.gov.in/ and upload all necessary documentation to their submission.

Manual Request - If you want to register for one of the other three AEO classifications, you must file a physical appeal to authorities.

There are many benefits of AEO certification, so be very careful while filling out the form; else, you may face rejection.

AEO T1 Registration

There is a development of an online platform by the government of India where candidates can register for the AEO T1 by filling out just 2 forms: Annexure one and Annexure two. To apply for just an AEO T1 certification online, follow these steps:

• Use your computer browser and go to www.aeoindia.gov.in and select "Registration."
• For accessing further into the app's interface, establish a username and password.
• They validate all the information you fill in for registration via the electronic Import-Export Code on the DGFT website. As a result, you have to register at the AEO gateway by using the firm's phone number and email address in the IEC.
• After entering the following information, you shall obtain a four-digit OTP that you must input.
• Upon signing in, you'll notice four categories just on the left part. When you pick the account, you can see the complete information you gave above, such as corporation IEC number, mobile number, region, and email address.

Online Filing of Annexure 1

After completing this, choose the "Application form" portion, split into two parts: Annexure–1 and Annexure–2. You must fill and submit the following documentation in Annexure -1:

• Firstly, input the name of your business.
• Letter of Refusal (only in case of AEO application rejection).

In case you answer yes to the current question, "Was there any rejection of the application?" choose the appropriate option and submit the refusal letter. If you answer no, move on to another process.

1. Fill in the IEC and GST certification information.

• Input the IEC numbers and select the certification to submit.
• Input the GSTN code and then submit the certification.

2. Fill in the Registered/Branch Address.
3. The very next stage is to provide your address information, which includes different information like:

• Kind of address
• Location (street name and number)
• Zip Code
• Submit a sitemap

4. Then you must provide information about your firms, such as if you are a producer, dealer, supplier, or exporter. And also the contact information for the individual with whom the Authorized Economic Operator Coordinator will communicate.
5. The 5th aspect involves the user's name, position, phone number/alternate number, and email address of the primary contact individual.
6. Continue to Sr. No. six on the registration form presently. Enter the firm's registration code, PAN, and relevant papers here.
7. Input the firm's PAN number and attach a photocopy of the same card.
8. Import countries: You must pick the nations from which you will be importing your things and the product's HSN Codes.
9. Export countries: Choose the exporting nation from whom you will export products, and then input the HSN codes of the products you will export.
10. Furthermore, you must fill out the number of papers (shipment invoices plus invoices from the past financial year). In simple terms, you must have at least more than twenty-five imports and exports shipments in the past financial year to be qualifying for AEO Accreditation. It is a fundamental and crucial qualifying criterion.
11. Enter in the periods for the term of the operation.
12. Process Map Details: Publish Import-Export Procedure Maps Specifications. 

Online Filing of Annexure 2

• Next, start filling in Annexure two, you can see space where you must disclose whether there is an instance of breach of immigration and relevant laws, including who is liable for this.
• In case there is an issue of an SCN by immigration or the GST officials, you'll require explaining why. Also, include the violation's specifics and the SCN clause. If there was a determination in the judgment, state it and mention details regarding the trial's start.
• Afterward, you have to submit Audit findings for the previous three fiscal years, you must break down liabilities—the process for managing the license and administering the business records related to exporting/importing. And you must also provide the license in case you are trading in items susceptible to anti-dumping or safeguarding duties.
• After that, you must upload product information.

Provide mechanisms of:

• To ensure that customs declarations are accurate.
• To ensure that you protect your system records from illegal access.
• Backing up and recovering your company data.
• Then, submit your firm's total value and attach the paperwork.
• The next section contains information about any liquidation or economic failure - initiated against your firm.

Also Read: Certificate of Origin – Issuing Authority, Importance, Types and Procedure

You can examine your request in the "Application view" area after submitting it. After you examine and double-check your Request form, you can submit it. 

Who will Evaluate Your Application for AEO?

The AEO Administration will evaluate your form after submitting it and when the AEO Program Manager confirms that the information/documents are genuine and acceptable. Then you will receive the AEO T1 Certification within thirty days of submission.

Conclusion

AEO certificates are more advantageous for importers with greater imports since they provide Duty Exemption advantages. It is critical for all businesses to make use of this to ensure smooth development.

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