The Central Board of Indirect Taxes & Customs (CBIC) has recently introduced the online filing of Authorised Economic Operators (AEO) applications. This innovative web application was developed, primarily, to facilitate digital monitoring of physically filed AEO applications in real time, aiming to expedite timely intervention.
Understanding the AEO Programme
AEO is a scheme that was launched in 2007 under the World Customs Organization’s (WCO) SAFE Framework of Standards to secure and facilitate global trade. The main objectives of the AEO are to improve international supply chain security and facilitate the flow of goods. Under this program, entities involved in international commerce are approved by the WCO as being compliant with supply chain security standards, earning them the AEO status. Entities granted the AEO status are considered ‘secure’ traders and reliable trading partners.
Benefits of AEO Status
Achieving AEO status provides entities with a range of benefits, including faster clearance times, fewer examinations, improved safety, and enhanced communication between supply chain partners. Participation in the AEO programme is voluntary.
Indian AEO Programme: An Overview
Introduced as a pilot project in 2011, the Indian AEO programme uses the security standards set out in the WCO SAFE Framework as its foundation. The programme offers a three-tier AEO status for exporters and importers, namely, AEO T1, AEO T2, AEO T3, with AEO T3 providing the highest level of accreditation.
Objectives of the Indian AEO Programme
The Indian AEO Programme seeks to provide business entities with an internationally recognized certification and recognition as “secure and reliable” trading partners. It also aims to incentivize businesses through offering benefits that save time and cost, secure the supply chain from export to import point, enhance border clearance, and reduce dwell time and related costs.
Benefits of Participating in the Indian AEO Programme
Participating entities gain global recognition as safe, secure, and compliant partners in international trade. Moreover, India obtains trade facilitation from any foreign country with which it has a Mutual Recognition Agreement/Arrangement (MRA). The programme also enables Indian Customs to improve and streamline cargo security by working closely with key players in the international supply chain. Furthermore, it promotes ease of doing business and emulates global best practices.
About World Customs Organisation
The World Customs Organization (WCO) is an independent intergovernmental body established in 1952 to enhance the effectiveness and efficiency of Customs administrations. Currently, it represents 183 customs administrations across the globe that collectively process approximately 98% of world trade.
Understanding the SAFE Framework
Adopted by the WCO Council in June 2005, the Framework of Standards to Secure and Facilitate Global Trade (SAFE Framework) acts as a deterrent to international terrorism, secures revenue collections, and promotes trade facilitation worldwide. The SAFE Framework prescribes baseline standards that have been tested and are effectively implemented globally.
