The AEO concept is one of the main building blocks within the WCO SAFE Framework of Standards (SAFE). The latter is part of the future international Customs model set out to support secure trade. SAFE sets out a range of standards to guide international Customs Administrations towards a harmonised approach based on Customs to Customs cooperation and Customs to Business partnership.
It is recognised internationally as a mark of quality. Authorised Export Operator status effectively demonstrates that your role within the international supply chain is secure, and that your customs controls and procedures are efficient and compliant.
N.B. Although the AEO concept is international, the majority of these FAQs are designed for EU entities. To have more country specific information, please check the relevant Country Profile.
AEO acts increasingly as a quality standard with many larger organisations insisting on this as an integral part of any trading partners. As part of the application process, government officials will stringently assess, amongst other things, the company’s finances, site security, shipping procedures, compliance with customs requirements and fulfilment of the relevant legal and safety regulations. Companies who already have IPP and ISO are half way to attaining this highly secure accreditation.
Even though there can be no denying that achieving AEO status is a time consuming and often daunting exercise, the commercial benefits can be immense and include:
Priority clearance for AEO certificated businesses will, by default, mean that non-certificated organisations will be dealt with as a secondary concern. When time is of the essence, such delays in delivery will inevitably prove ever more costly.
As the number of businesses with AEO status steadily increases, so will the pressure on other companies to also comply. Priority clearance for AEO certificated businesses will, by default, mean that non-certificated organisations will be dealt with as a secondary concern. When time is of the essence, such delays in delivery will inevitably prove ever more costly.
There may be other commercial benefits in having AEO status or in carrying out the work necessary to document procedures and improve the security of your supply chain to obtain AEO status. These may include reduced incidences of theft or losses in transit, improved security and communication with your partners in the supply chain and improved customer confidence.
It is also designed to provide businesses with an internationally recognised quality mark proving their role in the international supply chain is secure and their customs controls and procedures are efficient and compliant. Increasingly, businesses from outside the EU are refusing to deal with companies that haven’t acquired the AEO standard.
AEO is governed by European Community law. The basic law is set out in Council Regulation (EEC) No 2913/92 (the Customs Code) as amended by Regulation (EC) No 648/2005 of the European Parliament and of the Council and Commission Regulation (EEC) No 2454/93 (the Implementing Provisions) as amended by Commission Regulation (EEC) No 1875/2006.
Whilst not mandatory, the EU is none the less actively encouraging the majority of organisations who export outside of the EU to sign up to this worldwide initiative, which has been designed to ensure that international supply chains are secure and controlled from the point of origin through to the final delivery destination. Indeed, increasingly many larger organisations are insisting on this as an integral part of any trading partners.
Registration is open to all businesses in the EU that are involved in the international trade of goods with non-EU countries, including logistics operators, carriers, freight forwarders, customs agents, importers, exporters and manufacturers.
To qualify a business must be established in the European Union (EU), be actively involved in customs operations and international trade and have an Economic Operator Registration and Identification (EORI) number, which is most exporters.
The criteria for granting AEO status are contained in Article 5(a)(2) of Commission Regulation 2913/92.
These include but are not restricted to:
Anyone involved in the international supply chain (those involved only in Intra EU supplies are excluded) that carries out customs related activities in the EU can apply for AEO status irrespective of the size of your business. This includes:
Carriers A person or business that transports goods or is in charge of or responsible for the operation of the means of transport.
Customs agents A representative acting on behalf of the above either as a direct representative or indirect representative.
Exporters A person or business on whose behalf the export declaration is made and who are the owner of the goods or have similar right of disposal over them at the time the declaration is accepted.
Freight forwarders Organising the transport of goods on behalf of the above.
Importers A person or business that imports goods and are declared as the importer of record when the import declaration is accepted.
Manufacturers A person or business ensuring a safe and secure manufacturing process for their products and supply of those products to their clients.
Warehousekeepers A person or business authorised to operate a Customs Warehouse.
Customs Simplifications (AEOC)
Issued to any business that fulfils the criteria of customs compliance, appropriate record keeping standards and financials solvency. Providing:
Security and Safety (AEOS)
Issued to any business that fulfils the criteria of customs compliance, appropriate record keeping standards, financial solvency, and maintains appropriate security and safety standards. Providing:
Customs Simplifications/Security and Safety (AEOF)
Although AEOF is currently stated as available officially as a combined certificate, this is actually described by the Commission as a “legal myth”. In fact, a business can’t apply specifically for an “AEOF” certificate under the UCC, both AEOC and AEOS will need to be applied for separately in future. Holders of the combined AEO certificate (AEOF) receive the benefits of both AEO types.
Within the Single Market and the Customs Union, companies holding Authorised Economic Operator (AEO) certification have already had a clear advantage when exporting, especially to the United States and the world's largest economies, through Mutual Recognition Agreements.
Post-Brexit, AEO certification will become even more desirable as an internationally recognised tool to keep cargo moving. The EU and UK are expected to recognise each other's AEO schemes in a Post-Brexit environment.
Although the initiative has been in place for several years, the UK lags firmly behind other EU countries, with 799 approved AEO registrations compared to Germany with 6,428, the Netherlands with 1,547 and France who have 1,668 approved registrations (figures correct as at 8th May 2019).
The reasons behind this vast disparity in AOE numbers may be attributable to the respective sizes of the logistics sector in Germany and Netherlands in relation to the UK. However, there is a growing concern that UK businesses that trade internationally may lose traction if the scheme gains widespread popularity and they are not part of that development.