The Central Board of Excise & Customs (CBEC) has released a draft scheme of Authorized Economic Operator (AEO) based on the World Customs Organisation's (WCO) SAFE Framework of Standards to secure and facilitate global trade. The SAFE Framework of Standards was adopted by the WCO, an organization of 178 Customs administrations, in 2005 to address growing concern among the Customs administrations about the threats posed to national as well as global security through the misuse of channels of import and export.
Under the AEO programme, a party engaged in the international movement of goods is approved by Customs as compliant with the supply chain security standards, and given benefits, such as simplified Customs procedures and reduced Customs intervention which would speed up the clearances of import and export goods. This programme is being increasingly adopted by various Customs administrations world over with the objective of securing the supply chain with resultant benefits for the trading community.
The draft AEO scheme has been placed on CBEC's website (www.cbec.gov.in) for inviting comments and suggestions from various stakeholders such as trade and industry. This programme encompasses various players in the international supply chain such as importers, exporters, warehouse owners, Custom House Agents, cargo forwarders and carriers. Once granted the AEO status, businesses will have a recognized quality mark which will indicate their secure role in the international supply chain and that their Customs procedures are efficient and compliant. An entity with an AEO status can, therefore, be considered a 'secure' trader and a reliable trading partner. This will particularly benefit small businesses that account for the majority of importers and exporters.
Under the programme, an AEO status holder can enjoy benefits such as favourable consideration in any Customs proceedings and a low risk score resulting in reduced Customs examination and inspection, clearance of cargo before duty payment and periodical duty payment are some of the possible benefits that can accrue in the long term to an importer having AEO status. International experience also shows that that preferential treatment is accorded to exports from countries where AEO programme exist. Hence, the AEO programme is likely to benefit the exporting community as well.
Taking into account the response received from stakeholders, the CBEC shall shortly initiate few pilots before finalising the programme and rolling it for all eligible businesses sometime by middle of 2011
Draft Scheme of Authorized Economic Operator (AEO)
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