AEO is a programme (2007) under the aegis of the World Customs Organization (WCO) SAFE Framework of Standards to secure and facilitate global trade.
It aims to enhance international supply chain security and facilitate the movement of goods.
Under this, an entity engaged in international trade is approved by WCO as compliant with supply chain security standards and granted AEO status.
An entity with an AEO status is considered a ‘secure’ trader and a reliable trading partner.
Benefits of AEO status include expedited clearance times, fewer examinations, improved security and communication between supply chain partners.
AEO is a voluntary programme.
Need for a new AEO program
Limitations of the existing ACP/AOE Scheme
In-line with the Government 's impetus on ease of doing business
Reduced transaction and logistics costs
Faster clearances and reduced paperwork
Provide Indian traders an internallionally accepted certification and benefits
Increase in business opportunities
Four Core principles, Three Pillars and Seventeen Standards of SAFE Framework of Standards
|Four Core principles|
|Advance Electronic Information||Risk Management||Outbound Inspection||Custom Business Partnership|
|Harmonize the advance information requirement on inbound, outbound and transit shipments||Commit to employing a consistent risk management approach to address security threats.||Outbound inspection of high risk consignment being exported, preferably using non-intrusive inspection method and implementing best practices.||Customs to provide benefits to businesses that meet minimal supply chain security standards and best practices.|
|Customs to Custom Pillar [Standards]||Custom-to Business Pillar [Standards]||Customs to Other Government and Inter-Government Agencies Pillar [Standards]|
Standards under Customs to Business Pillar
|Standard No.||Subject||Standard Statement|
|1||Partnership||AEOs involved in the international trade supply chain will engage in a self-assessment process measured against pre-determined security standards and best practices to ensure that their internal policies and procedures provide adequate safeguards against compromise of their supply chains until cargo is released from Customs control at destination|
|2||Security||AEOs will incorporate pre-determined security best practices into their existing business practices.|
|3||Authorization||The Customs administration, together with representatives from the trade community, will design validation processes or quality accreditation procedures that offer incentives to businesses through their status as AEOs.|
|4||Technology||All parties will maintain cargo and container integrity by facilitating the use of modern technology.|
|5||Communication||The Customs administration will regularly update Customs Business partnership programmes to promote minimum security standards and supply chain security best practices|
|6||Facilitation||The Customs administration will work co-operatively with AEOs to maximize security and facilitation of the international trade supply chain originating in or moving through its Customs territory.|
Deferred duty payment scheme
Direct Port deliveries for import and export
Fast tracking of refunds and drawbacks
Fast tracking of adjudications
Request based on-site inspection/ examination
Recognition by partner Government Agencies
Mutual Recognition with other countries
Legal Compliance forms rationalized
Substantial benefits have been provided
Open to all Economic operators, low threshold
Three Tier Scheme as opposed to one earlier
Special conditions of SME/ MSME's to be taken into account
Objective criteria for any down gradation
Proven compliance trusted and rewarded
Anyone handling 25 documents per annum
Should undertake customs related work
Anyone in international supply chain
Only to legal entity and not group company covered
Will not be site/ branch / division specific
Business activities for three financial years (can be waived in deserving cases)
Who can apply for AEO Status?
Any business entity involved in the international supply chain carrying out custom related activities can apply for AEO status under the AEO Programme, including:
The businesses not involved in customs-related activities or work, are not eligible to apply for AEO status. In general, insurance companies, banks, consultants, etc., are ineligible for AEO status.
|Sr. No.||Categories of Business Entity||Benefit Available|
|3.||Logistic Service Providers||
|4.||Custodians or Terminal Operators||
|5.||Customs House Agents (CHA)||
|Documents covered||Category of Exports||Scale of Examination|
|Export consignments shipped to sensitive places viz. Dubai, Sharjah, Singapore, Hong Kong and Colombo||Others|
|1.||Consignments where the amount involved is 5 lakh or less||10%||2%|
|2.||Consignments where the amount of drawback involved is more than 5 lakh||25%||5%|
|3.||Consignments where the FOB value is under EPCG / DEEC is 10 lakh or less||10%||2%|
|4.||Consignments where the FOB value is under EPCG / DEEC is more than 10 lakh||20%||5%|
Direct port delivery in case of import and direct port entry in case of export; Direct Port Delivery of imports for ensuring just-in-time inventory management by manufacturers regarding clearance from the wharf to the warehouse & Direct Port Entry for factory stuffed containers intended for export by AEOs.
Small and medium scale entities would be given special focus. It must be noted that any entity handling upto 25 import and export documents annually can become part of the AEO programme;
Easy and fast disbursal of drawback amount;
Easy and fast disbursal of refunds and adjudications;
Paperless declaration with no supporting documents;
Site inspection or examination possible on request;
Recognition by partner Government agencies and other stake holders.
Providing deferred payment of duties by delinking customs clearance and duty payment.
Mutual recognition agreements with different customs administrations.
Extending facilitation to exports in addition to imports
Acceptance of self-certified copies of PTA/FTA origin related or any other required certificates for clearance.
The AEO scheme is purely an optional scheme. Applying for AEO status is a business decision de - pending on the role of the business entity in the supply chain and its willingness to acquire the benefit flowing by acquiring AEO status.
Phase 1: Verified on the basis of document submission only
Phase 2: In addition to the document verification, onsite verification is done
Phase 3: For AEO-T2 holders who have enjoyed the status for 2 years only on the basis of document verification & for AEO-T2 holders who have not enjoyed the status continuously or has introduced major changes in business, the applicant is subjected to physical verification
Phase 4: For logistics providers, custodians or terminal operators, custom brokers and warehouse operators there is only one tier.
In addition to document verification, onsite verification is done
|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|
|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|
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 translates into savings in time and cost.
Secure supply chain from point of export to import.
Enhanced border clearance.
Reduction in dwell time and related costs.
Customs advice/assistance if trade faces unexpected issues with Customs of countries.
Safe and Compliant Business: Worldwide recognition as safe, secure and compliant business partners in international trade.
Reciprocal Recognition: India gets trade facilitation by a foreign country with whom India enters into a Mutual Recognition Agreement/Arrangement (MRA). MRA is an international agreement by which two or more countries agree to recognize one another's conformity assessment results (for example certifications or test results).
Streamline Cargo security: It enables Indian Customs to enhance and streamline cargo security through close cooperation with the principal stakeholders of the international supply chain viz. importers, exporters, logistics providers, custodians or terminal operators, custom brokers and warehouse operators.
Promote Ease of Doing Business: A liberalized, simplified and rationalized AEO accreditation process has potential to promote Ease of Doing Business and to emulate global best practices.
Facility of Direct Port Delivery of import Containers and/ or Direct Port Entry of Export Containers.
It also fast tracking of refunds and adjudications.
The Indian AEO Programme is a game-changer. It will not only achieve ‘Make in India’ but also substantially add to the vision and lead India to become a manufacturing and exporting powerhouse.
Starting point for an AEO process is document and standard operating procedures (SOP) with respect to safety and security plans, and process map for movement of goods in international trade.
Reviewing the current level of security standards and other required areas for obtaining AEO status
Preparation of SOPs and establishing the required Standards
Collating the information and documents for filing AEO application
Preparation, filing of application, and providing clarifications from time to time required by AEO Authorities
Independent internal review to check the Security Standards and compliance level with other requirements for AEO and suggesting improvement areas before physical verification by AEO Authorities
Physical verification by AEO Authorities
Following up with AEO Authorities till obtaining the AEO Certificate
Compliance with AEO Status Requirements AEO status is likely to be an integral part of language of global trade and compliance.
Reduced Documentation for MSMEs
|Document Requirement||Company having MSME Certificate (for AEO T1 & T2 only)||Company not having MSME Certificate|
|Import- Export Document||10||25|
|Balance Sheet||Last 2 Financial Years||Last 3 Financial Years|
|Audit Report||Last 2 Financial Years||Last 3 Financial Years|
|Solvency Certificate||Last 2 Financial Years||Last 3 Financial Years|
|Application Form||MSME Annexure 1 & 2 with the reduced documentation.||MSME Annexure 1, 2 and 3 with the reduced documentation.|
Application for an AEO certificate
|Sl. No||Annexure||Subject||Application for grant of|
|Annexure- E.1||General Compliance||Yes||Yes||Yes||Yes|
|Annexure- E.2||Legal Compliance||Yes||Yes||Yes||Yes|
|Annexure- E.3||Managing commercial and (where appropriate) transport records||Yes||Yes||Yes||Yes|
|Annexure- E.4||Financial Solvency||Yes||Yes||Yes||Yes|
|Annexure- E.5||Safety and Security||No||Yes||Yes||Yes|
|6.||Annexure-F||Business Partner Details||Yes||Yes||Yes||Yes|
Under the circular dated 22 July 2016, the MSMEs could not avail AEO Programme due to various conditions. To support the MSMEs against the challenges of the COVID-19 pandemic, the CBIC introduced the ‘Liberalized MSME AEO Package’ for MSMEs in line with the Prime Minister’s Aatmanirbhar Bharat Abhiyan.
The CBIC examined the difficulties faced by the MSMEs (Micro, Small and Medium Enterprises) while applying for ACO certificate and relaxed various compliances and security requirements for MSMEs under the ‘Liberalized MSME AEO Package’, which are as follows:
The condition that the business must have handled a minimum of 25 customs documents in the last financial year was relaxed. The MSMEs handling ten documents (five documents each half-year) are eligible and can apply for an AEO certificate.
The condition of business carrying out customs-related activities for the last three financial years was reduced to the last two financial years for MSMEs to obtain AEO status.
The condition of not receiving a show-cause notice during the last three financial years involving forgery, fraud, clandestine removal of excisable goods, etc during the last three financial years was reduced to the last two financial years for MSMEs.
The condition of the business being financially solvent during the last three financial years was relaxed to last two financial years for the MSMEs to avail AEO status.
The various annexures required to be filed for AEO T1 and AEO T2 accreditation, i.e. annexure A, B, C, D, E.1 to E.4 have been supplanted with two annexures, i.e. MSME annexure 1 and 2.
The annexures required to be filed for AEO T2 accreditation, i.e. annexure E.5.1 and E.5.7 for physical verification has been rationalised with one annexure of MSME annexure 3.
The time limit for processing the MSME AEO T1 and T2 applications was reduced to fifteen working days (usually one month) and three months (usually six months), respectively.
The benefit of relaxation in furnishing a bank guarantee for the AEOs for MSME AEO T1 and MSME T2 was further relaxed to 25% from 50% and 10% from 25% required to be furnished by an exporter or importer who is not an AEO certificate holder, respectively
|Annexure-A: Application Form||
|Annexure – B: Security Plan||
|Annexure – C: Process Map||Process map for flow of goods/ documentation/ information from receipt of order to the point of export/delivery/ receipt of the product describing all the activities/ operations and role of the applicant and other business partners (e.g. CHA, Logistics provider etc.)|
|Annexure – D: Site Plan||Site plan with respect to all the sites of the entity describing (External perimeter/ all access point/ Lighting/ Office/ storage/ CCTV/ Container storage/ Parking etc.)|
|Annexure- E.1 General Compliance||
|Annexure-E.2 Legal Compliance||
|Annexure E.3 Managing commercial and (where appropriate) transport records||
|Annexure E.4 Financial Solvency||
|Annexure E.5 Safety and Security||
Due to the incompleteness of the application or certain other shortcomings of the business entity, the application would not be processed until these issues are corrected. Here are the cases wherein this could occur:
Reasons That Prevents Further Processing of the AEO Application
Incomplete filing of information
No responsible person is nominated as a Point of Contact (POC)
The applicant is undergoing bankruptcy
The application is not made by a legal person
Applicant does not fulfill the eligibility criteria
The application for AEO accreditation is not processed in following cases:
a) When application is incomplete. The application may be resubmitted with the complete information
b) Where the application has not been made by a legal person. The same can be resubmitted by the concerned legal entity.
c) Where no responsible person is nominated as the Point of Contact. The application can only be resubmitted when the applicant nominates a responsible person from his/her organization only, who will be the point of contact for the AEO Programme.
d) Where the applicant is subject to bankruptcy proceedings at the time the application is made. The application can be resubmitted when the applicant becomes solvent.
e) Where a previously granted AEO status has been revoked -The application can be submitted only after one year, in case of AEO T-1 & T-2 and after three years in case of AEO T-3 and LO, from the date of revocation.
The AEO application can be rejected in following two cases:
Various Other Factors
To fulfill required criteria for AEO certificate, the applicant will need to ensure that different security protocols are met as per the requirement. The applicant’s security standards are considered fulfilled, if the following conditions are fulfilled.
The applicant should fulfill all the eligibility Criteria for the issuance of AEO certificate.
Benefits associated with AEO Tier T1
Benefits associated with AEO Tier T2
Benefits associated with AEO Tier T3
Sample AEO Certificate
An AEO is a business entity involved in international movement of goods requiring compliance with provisions of the national Customs law and is approved by or on behalf of national administration in compliance with World Customs Organization (WCO) or equivalent supply chain security standards. The security standards are detailed in World Customs Organization Safe framework of standards [WCO SAFE FoS], which is the basis of the Indian AEO programme.
The AEO programme enables Customs administration to identify the safe and compliant business entity in order to provide them a higher degree of assured facilitation. This segmentation approach enables Customs resources to focus on less or non-compliant or risky businesses for control.
Thus, the aim of AEO programme is to secure the international supply chain by granting recognition to reliable operators and encouraging best practices at all levels in the international supply chain. Through this programme, the Customs shares its responsibility with the businesses, while at the same time rewarding them with a number of additional benefits.
The genesis of AEO scheme dates back to September 11, 2001 event in US which made all the governments to realize that the supply chain itself could be used for terror activities and a need was felt to make the supply chain secure. Since the supply chain is controlled by the trade, the Customs administration is partnering the trade in order to secure the supply chain.
The US started CT-PAT (Customs Trade – Partnership against terrorism) programme. Later WCO adopted SAFE Framework of Standards in 2005 in order to secure and facilitate the trade. The SAFE framework has three pillars comprising of Customs to Customs partnership, Customs to Business partnership and Customs to other Govt. stake holders. AEO programme is the core part of Pillar-II i.e. - Customs to Business partnership.
The SAFE FoS sets forth criteria by which businesses in supply chain can obtain authorized status as a secure partner. The criteria are incorporated in CBEC Circular No. 28/2012 dated 16.11.2012.
Thereafter a Revised AEO Program was launched vide Circular No. 33/2016-Customs dated 22.07.2016 as amended by Circular No. 03/2018 dated 17.02.2018, 26/2018 dated10.08.2018 and Circular No. 51/2018 dated 07.12.2018.
The AEO Programme was introduced as pilot project in 2011 vide Circular No. 37/2011- Customs dated 23rd August, 2011. The same was amended and the revised final AEO programme was introduced vide Circular No. 28/2012 dated 16.11.2012. With international developments such as Trade Facilitation Agreement (TFA) on securing and facilitating the International Trade and focus of Government of India on Ease of Doing Business, a comprehensive, unified trade facilitation initiative was launched by merging the existing Accredited Client Programme (ACP) and the ongoing AEO scheme of 2012 in the form of revised AEO Programme vide Circular No. 33/2016-Customs dated 22nd July, 2016. The ACP scheme was abolished by rescinding the Circular No. 42/2005-Customs dated 24.11.2005. Further simplification for financial solvency and decentralisation of AEO application processing was done vide Circular No. 03/2018 dated. 17.01.2018. The application process for AEO-T1 accreditation was further simplified to two Annexures form only by Circular No. 26/2018 dated 10.08.2018 from five Annexure form as was stipulated in Circular No. 33/2016 dated 22.07.2016. Web based On-line application filing and processing for AEOT1 status started from December 2018 vide Circular 51/2018 dated 07.12.2018.
The AEO programme has the following objectives:
No. The AEO scheme is purely an optional scheme. Applying for AEO status is a business decision depending on the role of the business entity in the supply chain and its willingness to acquire the benefit flowing by acquiring AEO status.
There is a three-tier programme for importers and exporters i.e. AEO-T1, AEO-T2 and AEO-T3 in the increasing degree of benefits accorded and compliance requirements. Furthermore, there is single Tier AEO Programme for Logistics Providers, Custodians or Terminal Operators, Customs Brokers and Warehouse Operators who are granted AEO-LO certificate.
The validity of AEO certificate is three years for AEO-T1 and AEO-T2, and five years for AEO-T3 and AEOLO.
Yes, it is valid at all Customs stations in India. In other words, an AEO status holder shall get the AEO benefits at all Customs ports/ airports/ Land Customs stations.
There are a host of benefits for all three categories of AEOs- T1, T2, T3 and LOs. These are listed in paras 1.5.1 to 1.5.4 for AEO T1, T2,T3 and LO respectively of Circular No. 33/2016-Customs dated 22nd July, 2016. Some of the major benefits are listed below:
Yes, all AEO T1/T2/T3 status holders are entitled for DPD/ DPE facility.However, they have to apply for the Direct Port Delivery permission to the concerned Chief Commissioner and also register themselves with the port authority for DPD facility.
No. The CBIC Circular No. 38/2016 dated 22.08.2016, list out the situations where amount of Bank Guarantee is reduced to 50%, 25% and Nil. Further it is not applicable for cases where competent authority orders furnishing of bank guarantee for provisional release of seized goods.
It is a mechanism for delinking duty payment from Customs clearance. It is based on the principle ‘Clear First-Pay later’. Deferred Payment of Import Duty Rules, 2016 vide notification no 134/2016-Customs (NT) and 135/2016-Customs (NT) both dated 02nd Nov 2016 have been notified and the same have come into effect from 16.11.2016. The AEO-T2 and AEO-T3 certified importers can avail the benefit of these Rules.
As per Rule 4 of the Deferred Payment of Import Duty Rules, 2016 an eligible importer who intends to avail the benefit of deferred payment has to intimate his intent to the jurisdictional Principal Commissioner of Customs or the Commissioner of Customs and get registered on the ICEGATE website www.icegate.gov.in.
As per Notification No. 134/2016 Customs (NT) dated 02.11.2016 as amended by Notification No. 28/2017 –Cus(NT) dated 31.03.2017,the Deferred Payment of Import Duty time lines are as below:
|Date of return of BE for payment of Duty||Date of deferred payment of duty|
|Date of return of BE for payment of Duty B/E from 1-15th day of any month||16th of the month|
|B/E from 16th-last day of month except March||1st day of the following month|
|B/E from 16-31 March||31st March|
NOTE: The duty under deferred payment scheme has to be paid electronically.
Yes, the facilitation benefits will be available in countries with whom India has signed Mutual Recognition Agreement (MRA). Indian Customs has signed Mutual Recognition Agreement (MRA) with South Korea, Taiwan and Hong Kong Customs to enable trade to get benefits on reciprocal basis.
Mutual Recognition Arrangements/Agreements (MRA) are bilateral understandings between two Customs Administrations which allow one business partnership program to recognize the AEO validations of the other country’s program and extend reciprocal benefits to each other’s AEO. The benefits are generally in nature of enhanced system-based facilitation & reduced interdiction, lower risk score for Indian exporter’s consignments at foreign port.
No. The AEO LO status will only be valid and applicable for the applicant and not for his importers or exporters. They need to apply separately for AEO status.
The application should be sent to the office of the jurisdictional Chief Commissioner of Customs with copy to AEO Programme Manager, Directorate of International Customs or in case of any doubt, to the AEO Programme Manager, Directorate of International Customs, 10th Floor, Tower II, Jeevan Bharti Building, Connaught Place, New Delhi – 110001.
The jurisdictional Chief Commissioner of Customs is the one from where the Importer/Exporter/Logistic operator is doing majority of business in international supply chain. An on-line website (Domain name: aeoindia.gov.in) has been created for filing and processing of AEO-T1 application. The applicant can login to the website and file the AEO- T1 application.
As of now, the following Chief Commissioner of Customs offices has been designated for processing of AEO application:
The Principal Commissioner, Directorate of International Customs, having office at 10th floor, Tower-2, Jeevan Bharati Building, Connaught Place, New Delhi-01 is the AEO Programme Manager for Indian AEO programme. For AEO-T1 accreditation, the Zonal AEO Programme Manager is treated as AEO Programme Manager for all purposes.
The AEO Cell under the jurisdictional Chief Commissioner of Customs, headed by nodal officer of the rank of Additional /Joint Commissioner is responsible for processing AEO applications as per provisions contained in Circular No. 33/2016-Customs as amended by Circular Nos. 03/2018-Customs, 26/2018 and 51/2018 -Customs. The nodal officer of the jurisdictional Chief Commissioner forwards the processed application of AEO-T2/T3 and AEO-LO with recommendation to programme manager of Indian AEO Programme having office at Delhi for taking final decision on AEO accreditation.
The process of AEO-T1 accreditation has been further simplified and decentralised by Circular No. 26/2018 dt.10.08.2018. Officers in the Rank of Principal Commissioner/Commissioner have been appointed as the Zonal AEO Programme Manager in each Zone headed by Principal Chief Commissioner or Chief Commissioner of Customs and are responsible for final acceptance or rejection of the AEO application.
Thus, the AEO-T1 application is processed by AEO Cell and eligibility thereto is decided at Zonal level only. The decision is conveyed to Directorate of International Customs for generation of AEO Certificate. Such approved applications are sent online by the zones to DIC Delhi for generation of digitally signed certificate.
Yes, the application can be filed again if grounds on which the application was rejected are no longer valid and the applicant is otherwise eligible for AEO status.
An applicant for AEO-T1 status is to file application online (Domain name: aeoindia.gov.in) in prescribed proforma along with a Declaration as indicated in Annexure A- 1, Annexure A-2 to CBEC Circular No. 26/2018 dated 10.08.2018. After introduction of web- based module for filing online applications vide Circular 51/2018 dated 07.12.2018, it is mandatory to file online application only.
An applicant for grant of any of the remaining three AEO statuses, namely AEO-T2, AEO-T3 and AEO-LO, should submit the application in the proforma specified in Table below. The application form as specified in the Circular No. 33/2016-Customs contains ten annexures. However, an applicant is required to fill in and submit only those annexures which may be applicable to it, as mentioned below:
|S.No.||Annexure||Subject||AEO T2||AEO T3||AEO LO|
|7||AnnexureE3||Managing commercial and (where appropriate) transport records||Yes||Yes||Yes|
|9||AnnexureE5||Safety & Security||Yes||Yes||Yes|
|10||Annexure-F||Business Partner Detail||No||Yes||Yes|
An existing AEO certificate holder can apply for higher AEO status. There is no time limit for filing higher status application except in case of AEO-T3. In case of AEO-T3, either the entity should have had AEO-T2 status continuously for two years or when all its business partners in international supply chain have acquired either AEO-T2 or AEO-LO status.
No. The applicant has to nominate the contact person/ authorized representative from company’s own administration only (Para 2.3 of Circular No. 33/2016-Customs).
Any business entity that is part of the international supply chain; involved in the cross- border movement of goods and required to fulfill obligations under the Customs law in India, only can apply for AEO status. These may include exporters, importers, logistic providers (e.g. carriers, airlines, freight forwarders, etc.), Custodians or Terminal Operators, Customs House Agents and Warehouse Owners, Port operators, authorized couriers, Stevedores etc. The list is not exhaustive.
The eligibility conditions and criteria for granting AEO Status has been listed in the Section 3 of the AEO Circular No. 33/2016 –Customs dated 22nd July, 2016 as amended by Circular No. 3/2018-Customs dated 17th January, 2018. An entity should fulfill the following criteria:
No. There is no provision to grant AEO status to specific site, division or branch of legal entity of the applicant.
As per the Indian AEO requirements, the applicant should have business activities for at least three financial years preceding the financial year of 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 can consider it for certification.
No, such economic operator should apply separately for any of the three tier AEO programme of importer/exporter (AEO T1/T2/T3) or single tier AEO LO status.
Yes, the AEO programme includes MSMEs and the eligibility conditions and criteria for granting AEO status are same regardless of size. The only requirement is that the entity should have handled at least 25 Customs documents in preceding Financial Year.
The Legal requirement for applying for AEO status, as prescribed in para 3.2 and annexure E.2, to Circular No. 33/2016-Customs dated 22.7.2016.
The documents /evidence include Certificate of Incorporation, ImportExport Code (IEC), balance sheets for three-years etc.
In cases where the statute exempts the applicant from statutory audit, the applicant can submit balance sheet certified by both the proprietor/partner/MD and any chartered accountant (CA) stating the profit /loss and net worth for the purpose of AEO application.
The documents/ evidence required as a proof about the business of a company having its own accounts include cancelled cheque, account statement, audited balance sheets.
It means that the applicant must have tools in the form of Customized software or manual checks to identify risks and detect error in Customs documents (B/L, invoice and Packing list), for selfassessment of goods imported i.e., proper check of classification, valuation etc and after clearance of goods from Custom control, they must have the process to reconcile the goods with duty paid invoice and packing list. Further they may have documented processes/SOPs/escalation matrix for communicating the error noticed to Customs on real time basis and maintain record of such errors for viewing of their employees so that such mistakes do not recur.
The ratio is calculated by dividing duty amount involved in SCN issued under the Customs Act divided by total duty paid & drawback claimed during the last three financial years. For example, the amount involved in SCN/disputed demand (includes demand of duty and denial of drawback) is 500/- and total duty paid is 20,000/-, drawback claimed is 5,000/-, the ratio shall be 500/(20000+5000)*100 = 2%.
Yes. In case the ratio is above 10%, the AEO programme envisages examination of the nature of cases of duty demand. The decision for issue or continuance of AEO status is at the discretion of AEO programme manager based on examination of the Show Cause Notices issued.
The AEO applicant should:
Any accounting system consistent with Generally Accepted Accounting Principles (GAAP) / International Financial Reporting Standards (IFRS) which facilitates audit-based Customs control can be adopted. The audited balance sheet by Auditor contains remark about the Accounting system adopted by applicant.
Generally, the audited financial statement/balance sheet contains comments as to whether administrative set up corresponds to size of business. Other requirements for internal controls are satisfactory organizational setup to handle goods and documents related to same in the international supply chain.
The applicant must have documented processes/ Standard Operating Procedures (SOPs) for storage and archiving of records and information. The SOP may contain the process of storing with the responsibility of concerned person, period of storing / archiving, process of taking suitable measures like back up for protection against loss of information. If the applicant has outsourced the storage and archiving of records, then the above requirements should be covered in the agreement with the agency storing the records and such agreements should be presented along with the application.
The applicant may submit their practice /processes of educating/ training their employees on Customs compliances. The process must include procedure to convey compliance difficulties, if any, to the designated Customs officer. The applicant may designate a person in their organization for above purpose.
No, there is no format in AEO Circular No. 33/2016-Customs. The only requirement is that the certificate should be for last three financial years (Each year) based on books of accounts and financial statements, tax returns etc.
The applicant for AEO T-2, T-3 and AEO-LO are required to submit Security plan and documents/evidence in support of fulfillment of requirements for safety and security listed in Annexure E.5.1 to E.5.7.
The safety and security criteria are listed in Para 3.5 and Annexure E.5.1 to E.5.7 of Circular No.33/2016. It has seven components.
In addition to submission of documents and fulfillment of requirements prescribed for AEO T-2 applicant, the applicant for AEO T-3 has to submit details prescribed in Annexure F of Circular No. 33/ 2016 dated 22.07.2016. In Annexure F, the applicant has to give details of all his business partner(s) in International Supply chain which includes their accreditation under Indian AEO Programme. The declaration is to be given in format of Annexure “F”. The AEO T3 applicants who are not AEO T-2 certificate holders for last two preceding financial years must have all business partners (CB, Freight forwarder, liner etc) AEO T-2 or AEO-LO certificate holder.
The following documents are required to be submitted along with the application:
Yes. However, if the company’s written and verifiable policies, processes, procedures, access control and other security policies, training and skill upgradation and compliance with government are same for all locations, the applicant can submit security plan of any one premise which is valid for all its premises used in International Supply Chain.
The process map should illustrate the flow of goods, documentation/ information from receipt of order to export/ delivery/ receipt of goods. The same has to be separate for each activity such as exports, imports,providing service for logistics operators etc. Hence, Annexure-C shall be for each individual activity of the applicant. The Process-Map must include role of applicant and its business partners in the supply chain.
Yes, the site plan as prescribed in Annexure D of Circular should be for all locations/sites.
The following documents are require for general compliance
The application for AEO accreditation is not processed in following cases:
The AEO application can be rejected in following two cases:
In case of AEO T-1 application, if the eligibility conditions and criteria for grant of certificate, as mentioned in Section 3 of Circular No. 33/2016-Customs, are found to have been met to the satisfaction of AEO programme manager, the AEO T-1 certificate shall be granted within 30 days of submission of information/documents.
The mode of application for AEO T-1 and its processing has been made online since December 2018. In case of AEO T-2 and LO application, on submission of all required information/documents, the applicant is informed about the receipt of the same within 30 days. The application is assigned to AEO team within 15 days to carry out physical verification in consultation with applicant. The AEO programme team visits the premises of applicant within 90 days. The applicant can contact programme manager if visit is not planned within 45 days. The AEO programme team prepares the report and makes recommendation within 60 days of completion of visit. The AEO programme manager informs about AEO T-2/LO status to applicant within 30 days of the recommendation of AEO team. Thus, the total time taken from submission of application till the issuance of the certificate, work out to maximum 180 days. In case of AEO T-3 application by an AEO T-2 status holder, the application is assigned to AEO programme team within 15 days. The timelines for further activities are same as in above para for AEO T-2 and LO certifications.
For AEO T-2 and AEO LO certification, examination of the criteria laid down under Section 3 of AEO Circular shall be carried out for all the premises which are relevant to the Customs related activities of the applicant for AEO-T2 or AEO-LO status. In case, more than one premises of applicant are run in similar way by standard systems of record keeping and security etc., the AEO programme team can choose to visit any one of such similarly run premises as per the provision contained in Para 126.96.36.199 of AEO Circular. In such situation, the applicant has to make declaration to this effect in the form of Undertaking. However, if the applicant has a range of activities or different premises are run using different methods of operation, the AEO Programme team has to visit those premises.
The purpose of Physical verification by AEO team is to check whether the claims made in application regarding requirement and fulfillment of criteria as listed in Section 3 of AEO Circular exists or are in place.
The AEO programme team may cover following areas during visit:
The above list is not exhaustive. The team can decide to cover more areas during visit as per the requirements.
Yes, in exceptional cases the verification process can be stopped with mutual consent. The applicant is given time to submit additional documents and rectify the minor issues. The applicant has to inform AEO team regarding rectification within 6 months so that the verification process recommences. The applicant in such cases will get decision on application by the revised date to be informed by the AEO team
The AEO status holder should report Customs related errors and its compliance to the CRM as well as AEO cell of the jurisdictional Chief Commissioner.
The AEO status is renewed against application for the same made before lapse of their validity as stated below:
|AEO status||Time limit for submission of application for renewal before lapse of validity|
The applicant must highlight the changes made from the last application in their renewal application. The AEO Programme Manager will consider the renewal applications by following the procedure adopted while granting the fresh AEO status.
The AEO status holder must notify AEO cell or the client relationship manager of the jurisdictional chief commissioner in following cases of changes:
The AEO status holder must notify the changes as soon as it is known or at least within fourteen days of the change taking place.
The AEO status holder needs to re-apply for the AEO certification in the name of new legal entity. For instance, if a legal entity changes from proprietorship to LLP or Private Limited Company, then it has to file a fresh application.
Yes. The AEO team is mandated to review the AEO status periodically to ensure that the AEO client continues to adhere to the condition of AEO accreditation.
The frequency of review of AEO status are same for AEO T-1 and AEO T-2 i.e., once in three years. The same is five years for AEO T-3 /LO status. However, the Directorate of International Customs, entrusted to implement and monitor AEO Programme in India, can initiate review at any point of time, if there is reason to believe that the conditions of AEO Programme or standard of AEO status have been compromised.
The AEO Programme Manager may suspend the Certificate of AEO Status in the following cases:
Withdrawal/ Suspension/ Restoration
The above decision is taken after due examination of the SCN, in consultation with the jurisdictional Commissioner.
No, there is no provision for appeal under the AEO scheme. However, there is provision of restoration of suspended/downgraded AEO status.
The requirements in various situations are as under:
The Certificate of AEO Status will be revoked in following circumstances:
The AEO-T1 and T2 status holders can re-apply only after a period of one year from the date of revocation. The AEO-T3 and LO status holders can re-apply only after a period of three years from the date of revocation.
The Customs Administration is bound to extend all the benefits and facilitation measures to AEO status holders listed in the AEO Circular. There is provision for appointment of Client Relationship Manager (CRM) at the level of AC/DC as a single point of interaction with AEO Status holder at the office of each Chief Commissioner of Customs. The appointment of CRM is notified by way of public notice by all jurisdictional Customs station. The CRM is entrusted with the responsibility to attend to the legitimate concerns and issues of AEO clients. The details of CRMs are also provided online at CBIC website.
All Jurisdictional Client Relationship Manager (CRM) are responsible for:
No, AEO applications and subsequent audits by customs are free of charge. However, some companies choose to use consultants to guide them through the process as preparation can be time consuming.
The AEO team, headed by nodal officer in respective Chief Commissioner of Customs, acts as help desk for all queries related to filing of AEO applications. The contact details of nodal officers and CRM are available on the CBIC website. For any query regarding online filing of AEO T-1 application, a separate help desk with following details has been created: Ph-011-23310013. E-mail: firstname.lastname@example.org.
Yes. An on-line website (domain name: aeoindia.gov.in) has been created for filing and processing of AEO application. The on-line facilities for filing of AEO-T1 application was launched vide CBIC Circular No. 51/2018 Custom dated 07.12.2018. The filing and processing of remaining three type of AEO accreditation namely AEO T2, AEO T3 and AEO LO is manual as of now.
CBIC Circular No. 51/2018 Custom dated 07.12.2018 detailing the process of the on-line filing of AEO T1 application is available at website www.cbic.gov.in. The field formations have issued Public Notices about the web based on-line application for AEO T1 status. For illustration, Jawaharlal Nehru Custom House Mumbai has issued Public Notice No. 158/2018 dated 21.12.2018 explaining the process of filing AEO T-1 application in detail with screen shots of relevant web page of the On-line AEO website. The above Public Notice is available at JNCH Mumbai website http://www.jawa - harCustoms.gov.in/ under the Public Notice tab.
The applicant has to first register themselves at the AEO website www.aeoindia.gov.in by furnishing the information asked for in the Registration window and to create user id and password for logging into the website to file AEO T1 application. The Registration particulars are verified vis-à-vis the details from applicant’s IEC by the Customs officer before processing the AEO T1 application on-line. If the registration particulars filed are not verifiable, the on-line application is not processed. Hence it is important to file correct detail, as per IEC, during Registration.
The applicants are advised to select Customs Zone which is being used by them for import or export activity. In case they are using more than one Customs Zone, then the Zone in which the number of Import/Export activity is higher may be selected.
The mobile number and/or e-mail address should be the one which is registered with DGFT and matches with the IEC certificate. In case the present mobile number and e-mail address of the applicant has changed, the same should also be updated in the DGFT issued IEC Certificate.
The online AEO application has two Annexure with information/ declarations to be filed numbered serially. The upload option along with help sign (information button) to guide applicant about the document to be uploaded has been created against some query points of the two Annexure. The applicant has to upload documents/ evidences against all such query points/serial number to make the application complete for processing.
Applicant has to upload site plan of registered office and branch addresses mentioned in The IEC certificate issued by the DGFT. Google maps of locations should not be uploaded as site plan.
Applicant has to upload the concerned page containing Net Worth and Net Current asset from the audited balance sheet of last three Financial Years. The uploaded page should bear the verification/authentication of statutory auditor or the Chartered Accountant.
The applicant can re-submit the application online after rectification of deficiency pointed out by the AEO team and uploading of documents listed in the deficiency. Such application shall again come to the Nodal Officer AEO of the concerned Zone for processing.
Yes. For any query regarding online filing of AEO T1 application, a separate help desk with following details has been created: Ph-011- 23310013. E-mail: diccbec.dor@ gov.in. Further, the applicant can contact Nodal Officer AEO or the Client Relationship manager of the concerned office of Zonal Chief Commissioner of Customs. The details of above are available at the CBIC website www.cbic.gov.in or the website of the concerned Zone. For example, the detail of CRM of Mumbai Zone-II is available at website www.jawa - harcustoms.gov.in