AEO

AEO is an internationally recognised ‘kite mark’ awarded by Customs that a business is deemed by Customs to be a ‘safe’ operator with regards to imports & exports.

It has been set up to try and promote the enhancement of identified & ‘safe’ International Supply Chains in order that Customs worldwide can more effectively tackle terrorism, fraud & counterfeiting

Despite much negative comment, it is here to stay and a fact of life for International Traders

Once fully live [mid 2013], any business involved in the International Supply Chain (be it importers , exporters, freight forwarders or logistics providers) will be directly affected by AEO.

This is because EU/UK Customs will target consignments differently and have already stated that AEO authorised businesses will be more favourably treated against non-AEO holding businesses.

Whilst voluntary, post mid 2013 It will be a case of the haves versus the have nots.

It is important that any business operating within the international supply chain especially large scale importers / exporters should seriously consider the impact of AEO status now

As the AEO authorisation process takes 6 – 9 months, there is an opportunity now to apply for AEO authorisation whilst it is not business critical – by applying now businesses can manage the authorisation process on their terms rather than await the time when it is business critical and when it will be more difficult to obtain.

This is because HMRC’s resources will in time become stretched as more businesses apply for AEO the nearer mid – 2013 becomes and of course if applied for once AEO is bedded in it will still take 6 – 9 months to obtain. Planning is therefore the key.

CONTACT US FOR DETAILS ON HOW WE CAN HELP YOU AND ADD VALUE IN THE AUTHORISATION PROCESS

There is a whole raft of benefits for being AEO authorised and conversely downsides if not authorised. These include the following:

1. HMRC use a Lower Risk Score for AEO holders to determine frequency of physical & documentary checks

2. Any consignments which are selected for checking will be fast tracked over non-AEO holder consignments

3. Reduces potential demurrage charges / possibility of hold ups which are anticipated to rise in the next few years for non-AEO holders

4. AEO status is recognised EU wide

5. Industry ‘kite mark’ akin to ISO standard

6. Could be commercially useful in obtaining new customers / appointing suppliers – especially when dealing with the USA & Far East as shows potential clients or suppliers that business operates to an internationally recognised standard

7. Commercially useful for freight forwarders / logistics providers as clients who may seek to become AEO authorised will need to ensure that their business partners operate to AEO level – if already AEO authorised yourself, gives confidence to clients / new clients as shows operate to a high and recognised standard

8. Reduces risk of theft, pilferage & tampering of consignments

9. Less data will be required on summary declarations

10. Speeds up process of authorisation where Customs Simplified procedures sought

11.Will fast track any Customs Reliefs sought

12. Less controls by HMRC as ‘approved status’

Downsde for not being authorised include:

1. Increased and unplanned consignment delay if a consignment selected for checking – unplanned disruptions could occur,

2. This could affect operational efficiencies

3. This could incur unnecessary costs for the business especially if late delivery charges apply

4. Profits could be affected negatively

5. Increased and more intense HMRC involvement in the business if HMRC want to verify as this will invariably be to AEO standards

6. Possible less ability to compete commercially – customers make go to AEO authorised businesses as an alternative

7. Missing the opportunity to enjoy the benefits listed above

8. Converse effect to the benefits listed above could apply

9. Business would be subject to uncertainties in import and export business

10. Additional costs operationally due to unnecessary time being spent on issues which could be avoided if AEO authorisation held