Authorized Economic Operator (AEO) Scheme

In today's globalized economy, the smooth flow of goods across borders is vital for businesses to thrive. However, with the increasing complexities of international trade, ensuring security and compliance has become more challenging. This is where initiatives like the Authorised Economic Operator (AEO) scheme come into play, offering businesses a means to streamline their operations with improved cashflows and maintaining compliance with customs regulations.

What is the AEO Scheme?

The Authorised Economic Operator (AEO) scheme is an initiative introduced under the Customs Act, of 1962 to enhance security and facilitate cross-border transactions. Essentially, it is a voluntary certification program that recognizes businesses involved in the international supply chain as low-risk and compliant with customs regulations and security standards.

Benefits of AEO Certification:

Businesses that attain AEO certification enjoy a range of benefits, including:

(i) High Level of facilitation in Imports resulting in short cargo release time
(ii) Inclusion of Direct Port Delivery of imports to ensure just-in-time inventory management by manufacturer’s clearance from the wharf to the warehouse
(iii) Wherever Bank Guarantee is required to be furnished, the quantum of BG would be reduced to 50% and 25% respectively for AEO T1 and AEO T2 Certificate Holders
(iv) AEO status holders are eligible to seek advance authorization on a self-declaration and ratification basis for the manufacture of export products where Standard Input Output Norms or Adhoc norms are not notified or the exporter seeks to use additional inputs in the manufacturing process.
(v) Various procedural facilities viz. email notifications, Identity Cards for authorized personnel for entry in customs, 24/7 clearance without MOT fees, etc.
(vi) Faster assessment of selected B.E.s on priority by customs officers
(vii) Facility to paste MRP stickers on the factory premises
(viii) Extension of facilitation to exports in addition to imports
(ix) Faster disbursal of drawback amount (within 72 Hours of submission of EGM)
(x) Fast tracking of refunds and adjudications (within 45 Days)
(xi) Request based on-site inspection /examination
(xii) Paperless declarations with no supporting documents
(xiii) Completion of Investigations, if any, in 6-9 Months

Sr. No.	Particulars	Date of Duty Payment
1	Goods corresponding to Bill of Entry returned* for payment from 1st day to 15th day of any month	16th day of that month
2	Goods corresponding to the Bill of Entry returned for payment from the 16th day till the last day of any month other than March	1st day of the following Month
3	Goods corresponding to the Bill of Entry returned for payment from 16th day till the 29th day of March	31st March
4	Goods corresponding to the Bill of Entry returned for payment from 30th day of March to 31st day of March	2nd April

Interlink Capital's Services in the AEO Scheme:

Interlink Capital offers a range of specialized services to assist businesses in obtaining and maintaining AEO certification:

Assistance in the collation of documents as prescribed under the relevant notifications and as prescribed by the respective authorities from time to time;
Preparation of the registration application and filing of the same before the appropriate authority;
Regular follow-up with authorities for processing of the registration application;
Legal and general assistance in relation to any deficiency memo/notice issued by the authorities;
Obtaining a registration certificate from the respective authorities; and
Any other general or legal assistance in connection with the registration described above process

Frequently Asked questions [FAQs]:

⭐ What is the validity period of AEO status?

For AEO-T1 and AEO-T2, the AEO certificate's validity is three years; for AEO-T3 and AEO-LO, it is five years.

⭐ Whether AEO certificate is valid at all Customs stations across India?

Yes, it is accepted at all Indian customs posts. Stated differently, a person with AEO status is entitled to AEO privileges at all customs ports, airports, and land customs stations.

⭐ Whether an economic operator whose application is once rejected under the current scheme, can apply again for AEO status?

If the applicant is still eligible for AEO status and the reasons for the application's rejection have expired, then the applicant may resubmit the application.

⭐ Who can apply for AEO status?

The only companies eligible to apply for AEO status are those that are involved in cross-border goods movement, are a part of an international supply chain, and must comply with Indian customs laws. These could include importers and exporters, logistic providers (such as airlines, carriers, freight forwarders, etc.), custodians or terminal operators, warehouse owners and agents of customs houses, port operators, licensed couriers, stevedores, etc. This is not a comprehensive list.

⭐ What is the eligibility criteria for a business entity to apply for Indian AEO status?

Section 3 of AEO Circular No. 33/2016 - Customs, published July 22, 2016, as amended by Circular No. 3/2018 - Customs, issued July 17, 2018, lists the requirements and qualifying conditions for awarding AEO Status.An entity should fulfil the following criteria:

a) Be established in India;
b) Engage in commercial activities linked to customs;
c) Handle a minimum of 25 customs documents (shipping bills or bills of entry) in the previous fiscal year;
d) Have been in operation for the previous three fiscal years.

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