Authorised Economic Operators
The (EU) Community Customs Code provides for Authorised Economic Operators. They are traders who are deemed low risk and compliant with customs obligations. As AEOs they may qualify for and may enjoy certain relaxations from standard customs controls.
Persons may be approved as AEOs at all levels in the international supply chain. They may include exporters, freight forwarders, warehouse keepers, customs agents, importers, carriers and manufacturers. They must be engaged in the course of their business, in an activity covered by customs legislation.
An AEO certificate may be given to an operator with
- an appropriate record of compliance with customs requirements,
- satisfactory systems of managing commercial and transport records where applicable which allow customs controls;
- financial solvency requirements;
- appropriate security and safety standards.
Group companies must each apply and obtain their own certificate.
There are three types of AEO certificates. An AEO Customs Simplification certificate entitles the holder to easier admission to customs simplifications procedures; fewer physical and document-based controls; priority treatment, if selected for controls; greater choice in the place where physical controls may be carried out.
An AEO Security and Safety Certificate may be issued to any operator established within the EU who complies with criteria regarding Customs compliance, record-keeping, solvency and maintains security and safety standards. The holder of the certificate is entitled to certain customs privileges. They enjoy reduced documentary control and may choose the place of physical controls and use certain convenient procedures.
The AEO Customs Simplifications / Security and Safety Certificate is issued to economic operators established within the EU who fulfil customs compliance criteria including solvency, appropriate records and who maintain security and safety standards. This combines the benefits of both the above certificates.
AEOs are responsible for goods in their custody and for facilities they operate. The certificate may cover multiple premises under their control.
Benefits of AEO Status
The holder of an AEO certificate is subject to fewer physical and document-based controls than others. An application for approval is made to the Revenue Commissioners.
AEO status allows easier admission to customs simplification approval. It is not necessary to be an AEO operator to obtain customs simplifications, but the status facilitates more ready approval. Many of the conditions will have been examined and certified, by the AEO certificate.
An AEO Safety and Security Certificate or an AEO Customs Simplifications/Security and Safety Certificate qualify for prior notifications. When a summary declaration has been lodged by an AEO, the customs office, may before the arrival or departure of the goods in or out of the EU, notify the AEO when and if a consignment has been selected for physical control.
An AEO importer and exporter is entitled to submit summary declarations with reduced data requirements. AEO carriers and freight forwarders may use the benefit of this simplification for their clients who themselves hold AEO certificates.
The requirements under various customs procedures to give financial security as a condition of authorisation may be waived in respect of AEOs.
Application for AEO Status
An application for an AEO certificate requires proof of compliance with the requisite criteria in relation to logistical management, financial solvency and safety. An independent expert may supply or support the requisite competence and capability.
The application must generally be processed within 120 days. When an accepted application is uploaded to a central EU database, other Member State authorities have 35 days to convey prejudicial information. Separately, the Revenue may consult other Member States’ authorities to evaluate the applicant’s standards under the qualification criteria. There are periods in which other EU states must respond, in the context of the application.
The applicant must generally have a good compliance record. There must be no serious or repeated infringements of Customs rules by the applicant or persons connected, managing or responsible for the applicant, in relation to Customs matters. An application may succeed, notwithstanding minor infringements, provided that there is no deliberate fraud and they are infrequent.
The applicant must generally furnish proof of solvency for the last three years. It must be of good financial standing, sufficient to fulfil its commitments with due regard to the characteristics of the type of business activity. Where it is established for less than three years, it is judged on the basis of records available. The applicant’s taxation compliance status is checked with other Revenue branches.
AEO Systems Requirements
The applicant must have an appropriate accounting and logistical capacity. It must maintain an accounting system which is consistent with Generally Accepted Accounting Principles and which facilitates audit-based customs control. It must allow the customs authority, physical and electronic access to its customs and transport records.
The applicant must have a logistical system which distinguishes between Community and non-Community goods. It must have an administrative organisation which corresponds to the type and size of business and which is suitable for the management of the flow of goods. It must have internal controls capable of detecting illegal or irregular transactions.
It must have satisfactory procedures in place for the handling of licenses and authorisations connected with commercial policy or trade in agriculture products, where applicable. It must have satisfactory procedures in place for archiving the company’s records and information and protecting against loss of information.
AEO Organisational Requirements I
The AEO must ensure that employees are aware of the need to inform customs authorities when compliance issues are discovered. There must be appropriate information technology security measures to protect the IT system from unauthorised intrusion and secure documentation.
There must be an administrative organisation, which corresponds to the type and size of business and which is suitable for the management of the flow of goods. It must have internal controls capable of detecting illegal and irregular transactions.
Buildings used in connection with operations must be constructed so that they can resist unlawful entry and provide protection against unlawful intrusion. Appropriate access control measures must be in place to prevent unauthorised access to shipping areas, loading docks and cargo units.
Procedures must be in place for handling import and export licenses connected to prohibitions and restrictions and to distinguish such goods from other goods. The applicant must implement measures allowing for a clear identification of its partners in order to secure the international supply chain.
AEO Organisational Requirements II
The applicant must conduct insofar as legislation permits, security screening of prospective employees in security sensitive positions and carry out periodic background checks. The applicant must ensure that its staff actively participates in security awareness programmes.
If an applicant has regulated agent status under the air cargo security programme managed by the Department of Transport, safety and security criteria are deemed to be met in relation to the premises for which the status exists.
The Transport Asset Protection Association is an association of security professionals and related business partners, shippers and logistics service providers who have come together to deal with supply chain security threats, that are particular risks in “high tech” industries and high-value consumer product sectors.
Some Irish operators have certification from TAPA. The certificates may demonstrate compliance with safety and security criteria.
Review and Suspension
Where an AEO certificate is issued, it is entered on a central EU database. The qualifying conditions and criteria are re-evaluated when there are major changes to EU legislation, or there are reasonable grounds for believing that the relevant conditions and criteria are no longer met by the authorisation holder.
An AEO authorisation may be suspended
- if it is discovered that the AEO no longer meets the qualifying criteria;
- if there is sufficient reason to believe that an act which gives rise to criminal proceedings linked to an infringement has been perpetrated by a certificate holder. An AEO certificate must be revoked where the position is not rectified within a suspension period.;
- where serious infringements related to Custom rules have been committed, and there is no further right of appeal,
- where the revocation is requested.
A person who is aggrieved by the decision of the Revenue may appeal the decision.
References and Sources
Customs Law of the European Union 4th ed 2012 M Fabio
EC Customs Law (Oxford European Community Law Library) 2nd Edition 2008 Timothy Lyons
Customs Code of the European Union Hardcover (1996) Tom Walsh Damian McCarthy
European Union Customs Code 2015 Tom Walsh
The Union Customs Code Regulation (EU) No 952/2013 of the European Parliament and of the Council.
amended by Regulation 2016/2339
The UCC Delegated Act Commission Delegated Regulation No 2015/2446.
The UCC Implementing Act Commission Implementing Regulation No 2015/2447.
The UCC Transitional Delegated Act wCommission Delegated Regulation No 2016/341.
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