Services from AEO ACCREDITATION CONSULTANTS

Aim of Indian Customs AEO Programme

To provide business entities with an internationally recognized certification

To recognize business entities as "secure and reliable" trading partners

To incentivize business entities through defined benefits that translate into savings in time and cost

And of course to make our world more secure and safe

Who can apply?

1. Anyone involved in the international supply chain that undertakes Customs related activity in India can apply for AEO status irrespective of the size of the business. These include manufacturers, exporters, importers, logistic service providers, (e.g. carriers, airlines, freight forwarders etc.), Custodians or Terminal Operator (CFS and ICD), Customs House Agents and Bonded Warehouse Owners. Others who may qualify include port operators, authorized couriers, stevedores. This list is not exhaustive.

2. Only such entities that can categorically establish their compliance to the legal and security criterion are eligible to apply.

3. The applicant must be established in India. The applicant should have business activities for at least three financial years preceding the date of application. However in exceptional cases, on the basis of physical verification of internal controls of a newly established business entity, the AEO Programme Manager may consider it for certification.

4. Keeping the small and medium scale enterprises in mind it has been decided the AEO programme is made open to all Importers/Exporters whose threshold of import or export declarations is 25 documents i.e. either Bills of Entry or Shipping Bills during the last financial year. The other economic operators should have handled at least 25 documents i.e. Bills of Entry or Shipping bills during the last financial year.

5. Legal Compliance: No show cause notice issued to applicant during last three financial years involving fraud, forgery, outright smuggling, clandestine removal of excisable goods OR cases where Service Tax has been collected from customers but not deposited to the Government. However if issued detail shall be furnished. Show Cause Notice issued involves only technical issues like classification, valuation etc., they are entitled to get benefit of AEO.

No case wherein prosecution has been launched/completed against the applicant or its senior management.

Ratio of disputed duty during the last three financial years to the total duty paid during the said period is not more than ten percent.

Ratio of disputed drawback during the last three financial years to the total drawback claimed during the said period is not more than ten percent.

6. Managing commercial and (where appropriate) transport records: The applicant should have a satisfactory

§ System of managing commercial, transport records,

§ Procedures for verifying the accuracy of Customs declarations,

§ Aware of the need to inform the Customs authorities whenever compliance difficulties are discovered.

§ Administrative set up which corresponds to the type and size of business

7. Financial solvency: The applicants must be financially solvent during the three financial years preceding the date of application and submit an undertaking regarding its solvency and a Solvency Certificate issued by the independent Chartered Accountants or Statutory Auditor of the applicant. The Net worth and Net current assets for the last 03 years should be positive.

Validity and Renewal of AEO

AEO status

Applicability

Validity

Time limit for submission of application for renewal before lapse of validity

AEO-T1

Granted only to an importer or to an exporter without physical verification of places/premises.

3 Year

30 days

AEO-T2

Granted only to an Importer or Exporter after physical verification of premises/places.

3 Year

60 days

AEO-T3

Granted to (i) an Importer or Exporter who continuously enjoyed the status of AEO-T2 for a period of two years preceding the date of application or (ii) The Importer/Exporter holding AEO-T2 certificate, and its other business partners namely Importers or Exporters, Logistics service providers, Custodians/ Terminal operators, Customs Brokers and Warehouse operators are holders of AEO-T2 or AEO-LO certificate or any other equivalent AEO certificate granted by a foreign Customs.

5Year

90 days

AEO-LO

Granted to economic operators other than importers and exporters, (e.g. Logistics Providers, Custodians or Terminal Operators, Customs Brokers, Warehouse Operators) after physical verification of premises/ places.

5 Year

90 days

Benefits of certificate under AEO scheme for all (AEO-T1, T2 & T3)

Benefits

AEO-T1

AEO-T2

AEO-T3

Shorter cargo release time

Yes

Yes

Yes

Direct Port Delivery (DPD) / or Direct Port Entry (DPE

Yes

Yes

Yes

ID to authorized personnel

Yes

Yes

Yes

Separate space earmarked in Custodian's premises.

Yes

Yes

Yes

Bank Guarantee only to extent

50%

25%

0.00%

Investigations

in six to nine months

Six month

Six month

Dispute resolution

Within six months.

six

six

e-mail regarding arrival/departure of the vessel

Yes

Yes

Yes

24/7 clearances on request at all sea ports and airports

Yes

Yes

Yes

No Merchant Overtime Fee (MOT) charges need to be paid

Yes

Yes

Yes

Waiver of seal verification/scrutiny of documents.

No

Yes

Yes

out of charge/let export order without any scrutiny by the officers

No

Yes

Yes

Front line of treatment for container scanning.

No

Yes

No selection for scanning

Facility of deferred payment of duty

No

Yes

Yes

Disbursal of drawback amount

within 72 hours of EGM submission

faster

Assessment and/or Examination on priority

Yes

Yes

Yes

Faster completion of Special Valuation Branch ('SVB') proceedings

No

Yes, in time bound manner

Yes

Facility to paste MRP stickers in their premises

No

Yes

Yes

Post clearance audit

Yes

Onsite PCA will be conducted once in three years only, no regular PCA.

On Intelligence information

Access to their consolidated import/ export data through ICEGATE

No

Yes

Yes

Facility of submitting paperless declarations with no supporting documents in physical form

No

Yes

Yes

Client Relationship Manager" (CRM) at AC/DC level at all port

No

Yes

Yes

Benefits for AEO-LO certificate

Logistic Service Providers

     i.      Waiver of bank Guarantee.

   ii.      Facility of Execution of running bond.

iii.      Exemption from permission in case of transit of goods.

iv.      In case of international transshipped cargo (Foreign to Foreign), for the pre-sorted containers wherein Cargo does not require segregation, ramp to ramp or tail to tail transfer of cargo can be effected without Customs escorts.

Customs Brokers

     i.      Waiver of Bank Guarantee

   ii.      Extended validity (till validity of AEO status) of licenses

iii.      System Manager to incorporate date of validity of AEO from time to time in the System Directory

iv.      Waiver from fee for renewal of license.

Warehouse Operators

     i.      Faster approval for new warehouses within 7 days of submission of complete documents

   ii.      Waiver of antecedent verification envisaged for grant of license for warehouse under circular 26/2016

iii.      Waiver of solvency certificate requirement under circular 24/2016

iv.      Waiver of security for obtaining extension in warehousing period under circular 21/2016

   v.      Waiver of security required for warehousing of sensitive goods under circular 21/2016

Custodians or Terminal Operators

     i.      Waiver of bank Guarantee

   ii.      Extension of approval for custodians under regulation 10(2) of the 'Handling of cargo in Customs Area Regulation 2009 'for period of 10 years.

What Is Deferred Duty Payment under Customs (Delinking duty payment and Customs clearance)

In terms of customs Notification No. 135/2016-Customs, Importers certified under Authorized Economic Operator programme as AEO (Tier-Two) and AEO (Tier-Three) are entitled for payment of duty under deferred payment scheme, means option of deferred payment is extended only to AEO-T2 and AEO-T3 certificate holder.

Date of bill of entry

Duty shall be paid

1st day to 15th day of any month.

By the 16th day of that month

16th day till the last day of any month except march

By the 1st day of the following month.

16th day till the 31st day of March

By the 31st March.

Notification No. 134/2016-Customs (N.T.) dated 2nd November, 2016 read with Circular No. 52/2016.

The eligible importer who intends to make deferred payment shall indicate the same using flag "D" in the Payment Method column of Bill of Entry filed.

For Queries, please write to us @ : aeoconsultants@aeoac.com