Authorised Economic Operator (AEO)
On 31 December 2020, the UK completed is transition from the EU. For companies to successfully continue trading with the 27 Member States obtaining Authorised Economic Operator (AEO) accreditation will be beneficial. The UK/EU Free Trade Agreement confirms that both parties will recognise the others AEO schemes.
Internationally recognised, with more than 70 countries operating AEO or similar initiatives, holding AEO accreditation indicates that a company’s role in the international supply chain is secure and reliable, that customs controls and procedures are efficient and compliant and consequently the company can be considered ‘low risk’ from a customs perspective.
What are the benefits of AEO?
AEO accredited companies will have their goods cleared through Customs' controls quicker than goods for non-AEO accredited companies. They will have easier access to customs procedures such as Inward/Outward Processing Relief and Duty Deferment
Non-AEO accredited companies will still be required to lodge financial guarantees to obtain Customs' authorisations, AEO's will benefit from guarantee waivers. The reductions of financial guarantee levels under AEO when taking advantage of customs procedures such as inward processing relief, are up to 70% for actual customs debts and up to 100% for potential customs debts.
AEO certification also signifies a company has a comprehensive and secure relationship with HMRC.
Who should apply for AEO?
AEO is applicable to anyone involved in the manufacture or distribution of goods globally, including warehouse operators, manufacturers, distributors, transport companies and freight forwarders.
How long does the AEO application process take and what does it cost?
There is no fee for applying to HMRC for AEO accreditation
The application process takes time and the preparation and submission of the application can take between 3 to 6 months, followed by a maximum 120 days for HMRC to assess your submission; this will include visiting applicants’ premises.
SKS provides support to firms throughout application process. Following an initial review, we will be able to advise on the cost of helping you to prepare and submit your application if you decide to progress.
It is not necessary to re-apply for AEO annually but your firm will be reassessed every three years through an on-site visit from HMRC.
What are the criteria for achieving AEO status?
Given the significant benefits offered and the decreased level of Customs examinations for goods being moved by AEO accredited companies the application process is detailed to ensure the integrity of the international supply chain.
Applying for AEO accreditation can be a lengthy process. The criteria for application include the need to provide evidence of tax and customs compliance for three years (less for recently established businesses), a satisfactory system of managing commercial, and where applicable, transport records, allowing for appropriate Customs controls and evidence of financial solvency.
Where can my firm get help with the AEO application?
SKS advise and assist companies involved in international trade to prepare and submit applications to attain AEO status. We have worked with many companies in various industry sectors helping them to successfully obtain AEO accreditation
If you would like to discuss AEO and how it might impact on your business please contact Stewart Smith on 07801 246964 or Steve Simmonite on 07778 494124.
Introduced by the EU in 2008, attaining AEO has become a globally recognised quality mark for UK businesses involved in the international trade. To attain AEO status and be entitled to the benefits that include ease of access in obtaining customs authorisation and obtaining guarantee waivers, businesses must prove to HMRC that they are compliant and trusted participants in the international supply chain.
Application is voluntary and HMRC is responsible for approving UK AEO applicants.
SKS advise and assist companies involved in international trade to prepare and submit applications to attain AEO status. We have worked with many companies in various industry sectors helping them to successfully obtain AEO accreditation.
If you would like to discuss AEO and/or Brexit and how both might impact on your business please contact Stewart Smith on 07801 246964 or Steve Simmonite on 07778 494124.