Benefits of AEO

Changes to importing and exporting legislation introduced on 1 May 2016 placed greater emphasis on Authorised Economic Operator (AEO) status for businesses operating within international supply chains. AEO certification provides recognised benefits that can streamline customs processes, improve supply chain security, and build trust with customs authorities and trade partners.

If your business is looking to gain AEO status or better understand its advantages, The Customs People can guide you through the application process and provide tailored advice to meet compliance requirements. Contact us by calling  0161 826 8926, or fill out an online enquiry form to learn how we can support your business in achieving AEO certification and maximise its benefits.

What are the benefits of AEO certification?

There are many AEO benefits associated with obtaining this status, which have been outlined below.

Practical benefits of AEO certification

Obtaining AEO certification has practical implications for streamlining customs operations. Businesses with this status enjoy expedited customs procedures, enhancing their efficiency in international trade. For instance:

• Customs simplifications are quicker to obtain.
• Fewer physical and document checks are conducted at borders, saving time.
• AEO consignments receive priority if selected for customs controls.
• Businesses can request that inspections take place at alternative locations, adding flexibility to customs operations.

These practical AEO customs benefits reduce the administrative burden and improve the overall efficiency of customs interactions

Business benefits of AEO certification

AEO certification enhances a company’s reputation as a trusted operator within international trade. It provides the opportunity to be recognised as a “preferred supplier,” opening the door to a broader network of vetted suppliers, transporters, and customers.

Advantages include:

• Smoother logistics when transporting goods across borders.
• Reduced risks and more reliable checks when dealing with third-party suppliers or transporters.
• Potential eligibility for reduced insurance premiums due to the certification’s security and safety standards.
• Streamlined import/export systems that improve record keeping and transaction processing.

For businesses operating in international trade, these AEO certificate benefits contribute to a more structured and predictable supply chain.

Global benefits of AEO certification

AEO certification is recognised beyond the European Union, making it valuable for companies engaging in global commerce. The framework extends to more than 70 countries, each offering similar programmes that facilitate smoother customs operations. Businesses can access mutual recognition agreements that validate their status internationally, fostering trade partnerships and expanding market reach.

Global AEO customs benefits include:

• Entry into new markets with a reliable “approved supplier” framework.
• Simplified customs legislation procedures when trading across borders.
• Enhanced collaboration with customs authorities in international markets.

These global advantages offer businesses an opportunity to compete more effectively in the interconnected landscape of international trade.

Financial benefits of AEO certification

The financial advantages of AEO certification lie in the efficiencies it brings to customs operations. By reducing delays and offering preferential treatment, businesses can minimise costs and improve profitability. Moreover, the certification supports robust documented procedures and effective record keeping, which are essential for financial transparency and compliance.

Specific financial advantages include:

• Improved logistics, which increase operational profits.
• Enhanced reliability when working with third parties, reducing risks associated with delays or non-compliance.
• A faster application process for customs reliefs, contributing to time and cost savings.
• Preferential treatment from other businesses and national customs administrations, fostering stronger business relationships.

The Customs People are experts in guiding businesses through the AEO application process, helping you establish compliance with customs legislation, improve record-keeping practices and unlock the full potential of AEO status. Contact us today to learn how we can support your business in achieving these benefits and strengthening your position in the international supply chain.

What are the requirements for achieving AEO status?

To achieve AEO status, businesses must meet a range of criteria designed to demonstrate their reliability in customs operations. Applicants must show compliance with customs legislation and maintain robust procedures, including accurate record-keeping and documented systems that support customs compliance. Evidence of a permanent business establishment and status as a legal entity is required, along with details of professional qualifications or expertise relevant to customs activities.

Customs authorities also assess financial solvency, supply chain security, and safety standards. Businesses must demonstrate a consistent track record of customs compliance and the ability to manage risk effectively within their operations.

We can assist your business in preparing for the AEO application process by assessing your current practices, addressing any gaps, and ensuring you meet the required criteria. Contact us to discuss how we can help you achieve AEO certification and make the most of its benefits for your international trade operations.

How does AEO status affect UCC obligations?

Businesses operating under the Union Customs Code (UCC) must adhere to more rigorous requirements, especially when utilising ‘Special Procedures’ such as inward processing, outward processing, temporary admission, and customs warehousing. These procedures, designed to allow businesses to defer or reduce customs duty and VAT payments under specific conditions, now come with heightened obligations.

To mitigate risks associated with duty suspensions or deferrals, the UCC mandates that businesses lodge a financial guarantee. This guarantee must cover one month’s potential liability for customs duties and import VAT, acting as a security measure for customs authorities.

However, this financial guarantee may not be required if the business has achieved AEO certification or can demonstrate compliance with the criteria for becoming an Operator. Certification provides evidence of the business’s reliability, adherence to security and safety standards, and strong record-keeping practices.

HMRC will reassess existing authorisations for businesses operating ‘Special Procedures’, including those with indefinite arrangements like customs warehousing. These reassessments are conducted to verify whether the business continues to meet the requirements under the UCC, ensuring compliance with the latest customs legislation and administrative procedures. Businesses failing to meet these requirements risk suspension or revocation of their authorisations, alongside increased operational costs due to the imposition of the financial guarantee.

Our tailored guidance simplifies UCC compliance and AEO certification, helping your business maintain smooth customs operations. Speak to our specialists to understand how we can support your customs processes effectively.