AEO Program Implemented in European Community

January 11, 2008

Effective January 1, 2008, the European Community (EC) formally implemented its Authorized Economic Operator (AEO) program.  AEOs are economic operators who, by virtue of satisfying certain criteria, are considerd to be reliable in their customs related operations throughout the EC and are therefore entitled to certain benefits.  It has been reported that the introduction of AEO status is the EC's response to the need to secure international supply chains, to the introduction of U.S. Customs-Trade Partnership Against Terrorism (C-TPAT) program and to the development of the Framework of Standards to Secure and Facilitate Global Trade (SAFE Framework) in the World Customs Organization (WCO).

Anyone established in the EC (this includes natural persons (persons normally resident in the EC) and legal persons (any person that has a registered office, central headquarters, or permanent business establishment in the EC)) involved in the international supply chain, and who carries out customs related activities in the EC is eligible to apply for AEO status irrespective of the size of their business.  This includes manufacturers, exporters, freight forwarders, warehouse keepers, customs agents, carriers, and importers.

During the initial two year transitional period starting January 1, 2008, EC Member States have 70 calendar days from the date an AEO application is referred to them by an issuing Member State to respond (for applications involving customs operations solely within the issuing Member State) and 120 days to respond (for applications involving customs operations in other Member States).  The United Kingdom's HM Revenue and Customs office (HMRC) advised that prospective applicants should allow at least 90 to 120 days for applications to be considered.  Certain countries, like the United Kingdom, began accepting applications prior to January 1, 2008.

There are three types of AEO certificates:

• Customs Simplification AEO - issued to any business who fulfills the criteria of customs compliance, appropriate record-keeping standards and financial solvency;
• Security and Safety AEO - issued to any business who fulfills the criteria of customs compliance, appropriate record-keeping standards, financial solvency, and maintains appropriate security and safety standards; and
• Customs Simplification/Security and Safety AEO - issued to any business who fulfills the criteria for both the Customs Simplification AEO and Security and Safety AEO.

Additional information on the AEO Program, as well as the associated benefits for participating in the program may be obtained here.