What Is AEO Program And How It Helps You As An Exporter
The Indian government has recently launched various schemes to support the export industry. AEO – Authorized Economic Operator program is one such scheme that has been launched with the motive to grow our country’s import-export business. It is a trade business facilitation scheme for ease of conducting trade in light of international development. A trader who has this trade certificate is able to enjoy a lot of privileges, benefits, relaxation, and immunity on various imports and exports. However, if you are an exporter, you must be aware of the fact that the AEO program certificate is issued for a particular period and it needs to be renewed from time to time.
India has a Three-Tier AEO program. This Three-Tier AEO program consists of T1, T2, and T3. This certification is issued by the Indian Customs Circular No. 33/2016 dated 22nd July 2016 (in suppression of Circulars No. 42/2005 dated 24.11.2005– old ACP scheme and Circulars No. 28/2012-Customs dated 16.11.2012– old AEO program). As of today’s date, the previous ACP scheme and old AEO program have been incorporated into the Three-tier certification for foreign trade business holders.
Who can apply for the Authorized Economic Operator System?
This certificate is available for everyone who is indulged in international trade and business. Anyone having a foreign supply chain that involves customs-related activities in our country can apply for the AEO certificate, be it a small startup or a big brand. Along with importers and exporters, it also includes logistics providers, warehouse owners, customs house agents, and terminal operators. Some others who are qualified to apply for this certification are authorized courier dealers, port operators, and stevedores.
Small-scale and medium-scale businesses can apply for the AEO certification. The minimum requirement for applying is the filling of 25 documents. The documents must be either Shipping bills from the previous financial year or Bills of entry.
The Authorized Economic Operator program, basically known as AEO, applies to both new and existing companies. The only requirement is that applicants must have business activities for a minimum of three financial years foregoing the date of application.
Which businesses are not entitled to the AEO program?
Those businesses which do not have any kind of customs-related work are not eligible to apply for the AEO certification. This includes banks, insurance companies, consultants, and other similar categories of businesses.
AEO is always branch or entity-wise: AEO program is always entity-wise. This means that if a company has 2 or more companies under it, then each of them needs to apply for the AEO certificate separately.
AEO status of Customs Broker Import-Export Business Owner is different: AEO status can be granted to a Customs Broker, but this will not grant similar status to their client importers and exporters. Their clients must apply separately for getting the AEO status.
Type, Applicability, Validity, and Renewal of AEO Certification
|Types of AEO Certificates||Applicability||Validity||Renewal time limit|
|T1 Certificate||Only exporters and importers||Valid for 2 years||Within 30 days|
|T2 Certificate||Only exporters and importers||Valid for 3 years||Within 60 days|
|T3 Certificate||One can apply for the T3 AEO certificate when they have continuously enjoyed the status of the T2 certificate for a minimum of two years coming before the date of application for grant of the AEO-T3 certificate||Valid for 5 years||Within 90 days|
|AEO-LO Certificate||This certificate is available for Logistics Providers, Terminal Operators, Warehouses, and Customs Brokers.||Valid for 5 years||Within 90 days|
Benefits of the AEO program
This program is mainly focused on enhancing the import-export industry of the country. There are a lot of benefits that the businesses entitled to it can gain through this.
- It provides a higher level of facilitation to the ones holding the certificate.
- It enables direct port delivery of imports and export containers.
- It offers reductions on bank guarantees.
- This certificate enables its holders to enjoy the benefit of 24/7 clearance on request at various seaports and airports ensuring the smooth running of international trade.
- It provides the benefit of shorter cargo release times.
- It diminishes the merchant overtime fee.
- This certificate provides quick completion of the Special Valuation Branch.
Benefits of the AEO-LO Certificate
- It enables you to waive bank guarantees.
- It acts as a waiver of the solvency certificate.
- It acts as a waiver of security.
- It diminishes the fee for renewal of the license.
- AEO-LO certificate provides the facilitation of execution of the running bond.
Where to apply for the AEO program and renewal?
In order to get an AEO certificate or renew it, you must send an application to the AEO Programme Manager, Directorate General of Performance Management, Customs, & Central Excise located in the ‘D’ block, I.P Bhawan, I.P Estate, New Delhi – 110002.