PARADEEP CUSTOM HOUSE,

CUSTOMS (PREVENTIVE) COMMISSIONERATE,

BHUBANESWAR

WELCOMES
ALL CUSTOMS STAKE HOLDERS TO PARTICIPATE IN
AUTHORISED ECONOMIC OPERATOR (AEO) PROGRAM
SAFE (Security and Facilitation in global Environment)
Framework of Standards (FoS) by WCO

Growth of global trade and increasing security

threats to international cargo
Shift in Customs focus to secure international
trade flow and facilitation.
To secure and facilitate global trade
To act as deterrent to international terrorism
To promote trade facilitations world wide
To secure revenue collections
SAFE FoS and AEO
SAFE FoS consists of 3 Pillars
Pillar-I deals with Customs to Customs partnership
Pillar-II covers Customs to Business partnership
Pillar-III Customs to other Govt. stake holders
AEO is core part of Pillar-II of SAFE FoS.
The SAFE Framework sets forth the criteria by which businesses in
the supply chain can obtain authorized status as a secure partner.
Criteria / Requirement incorporated in CBEC Cir. 33/2016 dated
22.07.2016
Evolution of AEO Programme in India

 AEO Pilot programme launched in 2011 – Circular No :

37/2011-Customs dated 23.08.2011
 Launch of full fledged AEO programme in 2012 – Circular No.
28/2012-Customs dated 16.11.2012

New AEO programme based on SAFE framework of Standards

of WCO
 Cus. circular No.33/2016 dated 22.07.2016 -Merger of the ACP
and AEO facilitation scheme into a combined three tier AEO
Programme for importers and exporters.
 Ease of doing business: further liberalizing Conditions and
processing of AEO applications via Circular 3/2018 – Cus.
 Latest AEO Circular No.26/2018-Customs dated 10-08-2018.
 Aim & Objective of AEO Programme

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 translate into
savings in time and cost
 AIM & OBJECTIVE –balancing
needs

Secure borders
Facilitate
from
legitimate trade
unlawful trade

Customs to Business Customs to Customs

Partnership Network

Customs to Other Government Agencies Cooperation

AEO-Eligibility criteria for a business entity
Anyone handling 25 and more documents
per annum
Should undertake CUSTOMS RELATED
WORK
Anyone in international supply chain
Only to legal entity and not group company
Will not be site/branch/division specific
Business activity for three financial years
(can be waived in deserving cases )
 AEO certification criteria

Maintain
Established Systemic approved
in India record security and
maintenance safety
standards

Proven
compliance Proven
with
Customs &
financial
solvency AEO
other laws
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 Trade Centric Approach to
Implementation
Multi-
National
Corporation
s
Small &
Large Medium
entities entities
AEO Program is open to any entity in the International Supply
Chain registered in India with a certificate of registration issued
by the Registrar of Companies and having a threshold of
minimum 25 Import/export declarations

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 All players in supply chain can be
certified

• Three tier AEO programme for importers and exporters (AEO-

T1, AEO-T2, and AEO-T3)
• Single tier of certification (i.e. AEO-LO) for economic operators
other than importers and exporters

Warehouse
Importer/Exporter Operator Custodian

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Logistic Customs
10

Service Broker
provider
 AEO - MAJOR BENEFITS
 Deferred duty payment scheme
 Direct Port deliveries & Direct Port Entry for import

and export
 Fast tracking of refunds and drawbacks
 Fast Tracking of investigation & adjudications
 Mutual Recognition with other countries
 AEO - MAJOR BENEFITS
 Relaxation in the quantum of Bank Guarantee

requirement.
 Facility of ‘CRM’ – Client Relation Manager at each

Customs House to help AEO T2 & AEO T3 and resolve

their issues.
 The BE/ SB selected for assessment and Examination

will be processed on priority by Customs officers.

Essential features liberalized to promote Ease of
doing Business (Circular No.03/2018-Customs dated
17.01.2018)
Documentation and procedural requirement eased.

Application filing/processing decentralized. Respective

Customs Chief Commissioner zone to process AEO
applications for units falling within their zone.
Legal compliance norms rationalized. [Uploading on website
& report within 14 days]

Financial Solvency to be certified by any registered CA (For

T1 and T2)
Benefit under Para 4.07A under FTP 2015-20 on self
declaration of Inputs beyond SION extended to all T1 AEO
entities.
Validity period for AEO T1 and T2 made 3 years uniformly
(Circular No.03/2018-Customs dated 17.01.2018)
Simplified and Liberalised procedure for AEO T1
certification – Circular 26/2018
The AEO T1 processing was rationalized via new circular 26/2018 - cus. dt
10.8.2018.
The present circular has cut down on the Annexure required for AEO T1
certification from earlier 7 to the present 2.
The new circular has completely decentralised the processing of AEO T1. In the
present the setup, the AEO T1 file can be approved at the Zonal level.
The major changes that are brought out by way of new circular are as follows:

1. Rationalized the Legal Compliance, financial solvency and internal record keeping
requirements by taking away the redundancies in earlier compliance parameters.
2. Clarifying the financial solvency requirements by way of Guidance note.
3. Doing away with the need of CA certificate for establishing Financial Solvency.

Circular33/2016 customs dated 22-07-2016 amended by Circular 03/2018

customs dated 17-01-2018 and Circular 26/2018- Cus dated 10.8.2018)
Benefits associated with AEO Tier T1

High facilitation
Direct Port Delivery/Direct Port
Entry
BG 50%
Expedited investigation-dispute
resolution
ID cards/ Earmarked space in
warehouse
E mail on arrival/departure

Faster Refund & Drawback

Benefits associated with AEO Tier
T2
All facilities of Tier I PLUS

Higher facilitation

Deferred duty payment

MRA benefits in other countries

Priority in scanning/assessment

25% BG

Refund/rebate in 45 days

Faster disbursal of drawback

Client Relation Manager

Benefits associated with AEO Tier T3

All facilities of Tier II PLUS

Highest facilitation
Scanning only on specific
intelligence
Reliance on self certified
copies
No Bank Guarantee

Refund/rebate in 30 days
 Benefits associated with AEO-LO
LOGISTIC Waiver of BG for transshipment
SERVICE
PROVIDERS
Facility of execution of running Bond
Exemption from case to case permission for Transit

CUSTODIAN AND Waiver of BG

TERMINAL
OPERATORS
Extension of approval of Custodians for period of 10
years
CUSTOM Waiver of BG
BROKERS
Waiver from fee for renewal
Validity extended till validity of AEO status
WAREHOUSE Faster approval for new warehouses
OPERATORS
WAIVER FROM antecedent verification/ solvency
certificate/security for extension of warehousing /
security for sensitive goods
AEO -T1 Certificate Norms (Circular No.26/2018-
Customs dated 10.08.2018

 Importers/ Exporters fulfilling the eligibility

criteria applying with Documents/
information pertaining to:

Legalcompliance
Records Maintenance compliance
Financial solvency
 AEO –T2 Certificate Norms

In addition to the criteria of AEO- T1, the AEO - T2 applicant should

fulfill the 7 aspects of Safety & Security:
 Procedural Security
 Premises Security
 Cargo Security
 Conveyance Security
 Personnel Security
 Business Partner Security &
 Security Training & Threat Awareness

 Claims made in regard to the 7 aspects of security is physically verified

by AEO Team by On-site verification/validation to confirm whether the
assessment made by the applicant & the documents filed along with
application is true and to the satisfaction of the AEO programme
manager
 AEO – T3 Certificate Norms

 The economic operator should have continuously

enjoyed the status of AEO –T2 for at least two years
preceding date of application for AEO- T3 status.

OR

 The economic operator must be an AEO – T2 certificate

holder and all its Business Partners have to be holders
of AEO- T2 or AEO- LO certificates or equivalent
granted by a foreign Customs
 Single Tier AEO – LO

 This certification is for Logistics Service Providers,

Custodians or Terminal Operators, Customs Brokers
& Warehouse Operators.
 Norms are same as AEO –T2 norms.
 All Annexure to be submitted except Annexure- F.
 Validity for the AEO –LO is 5 years.
 AEO Programme opportunities:
Mutual Recognition Arrangements/ Agreements
(MRAs)
Action
 or decision taken or an authorization that has been
properly granted by one Customs administration is
recognized and accepted by another Customs administration.
One Customs administration recognizes the Validation

findings and AEO authorizations by other Customs
administration.
Agrees
 to provide substantial –reciprocal
benefits/facilitations to the mutually recognized AEOs.
MRA with South Korea and Hongkong signed. MRA signing

under process with USA, Taiwan, Malaysia, Singapore and
Canada.

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AEO programme Opportunities:
More Profits
 AEO certification potentially means faster business.
 Priority in Customs Clearances & procedures.
 Curtailment in Dwell time in clearances meaning
more handling of Customs Business in a given time.
 Reduction in transaction cost of imports and exports
 All together leads to growth in Business, ultimately
means more potential PROFITS.

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 Other
Companies
 I came.
I saw.
I conferred.

Thank you!

PARADEEP CUSTOM DIVISION