Authorized Economic Operator scheme - CBEC's Customs Manual 2025 - Customs

16. Authorized Economic Operator scheme: 16.1 The earlier Accredited Clients Programme (ACP)/Authorized Economic Operator (AEO) scheme granted assured facilitation to importers who have demonstrated capacity and willingness to comply with the laws administered by the Customs. The earlier existing ACP and AEO programmes were merged into the new AEO programme vide Circular No. 33/2016-Customs dated 22-7-2016. For the economic operators other than importers and the exporters, the new programme offers only one tier of certification (i.e. AEO-LO) whereas for the importers and the exporters, there are three tiers of certification (i.e. AEOT1, AEO-T2 and AEO- T3). 16.2 AEO is a voluntary compliance programme under the aegis of the World Customs Organization (WCO) SAFE Framework of Standards to secure and facilitate Global Trade. The programme aims to enhance international supply chain security and facilitate movement of legitimate goods. Under this programme an entity engaged in international trade is approved by Customs as compliant with supply chain security standards and granted AEO status certain benefits. India s AEO Programme is in sync with the commitments made under Article 7.7 of WTO FTA. 16.3 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. The legal framework for AEO program provides a three tier AEO Status for Exporters and Importers. The three tiers are AEO-T1, AEO T2, AEO T3, where AEO T3 is the highest level of accreditation. All three tiers provide for varying benefits and incrementally increasing level of facilitation to the status holder. There is one more category of AEO LO that covers all other entities in the supply chain other than the importers and exporters covering the stakeholders such as Custom Brokers, Freight Forwarders, Shipping Lines, Airlines, Warehouse owners, CFS owners, Custodians etc. However, the entities that are not directly engaged in the international movement of goods such as banks, financial entities etc. are excluded from the purview of this programme. 16.4 Considering the likely volume of cargo imported by the Authorized Economic Operator, Custom Houses are advised to create separately earmarked facility/counters for providing Customs clearance service to them. Commissioners of Customs are also required to work with the Custodians for earmarking separate storage space, handling facility and expeditious clearance procedures for these clients. 16.5 The RMD maintains the list of AEOs centrally in the RMS and also monitors their levels of compliance, in co-ordination with the DRI/Commissioners of Customs. Where compliance levels fall, the importer is at first informed for self-improvement and in case of persistent non-compliance, the importer may be deregistered under the AEO. 16.6 The new combined three tier AEO programme enhance the scope of these programmes so as to provide further benefits to the entities who have demonstrated strong internal control system and willingness to comply with the laws administered by the Central Board of Indirect Taxes and Customs. Benefits besides lowered risk ratings on RMS includes simplified Customs procedure, declarations, etc. besides faster Customs clearance of consignments of/for AEO status holders The features and details of the revised programme are available in CBIC Circular No. 33/2016- Customs dated 22.07.2016. 16.7 Mutual Recognition Arrangement/Agreement (MRA) Mutual Recognition Agreement (MRA) is a broad concept embodied within WCO SAFE Framework of Standards, whereby two countries arrive at an agreement or arrangement to mutually recognize AEO authorizations, that has been properly granted by one Customs administration. MRA provides a platform for AEO programmes to provide additional benefits to their members through international recognition with partner countries. Under WCO SAFE Framework of Standards, Customs Administrations are encouraged to develop partnerships with businesses and between each other to secure and facilitate international trade. [Refer Circulars No.33/2016-Customs dated 22.07.2016, No.03/2018-Customs dated 17.01.2018 and No.26/2018-Customs dated 10.08.2018. For more details, please refer Chapter 35.]