Key things to know about AEO Certification in India
August 24, 2021
What is AEO Certification in India?
Administered by the Customs Department (CBEC), the Authorised Economic Operator Programme (or AEO Programme) is a voluntary programme that applies to all business entities in India that participate in the global supply chain. Entities that meet pre-determined compliance standards of the AEO Programme are certified as an AEO entity. The Indian AEO programme is essentially a trade facilitations programme for importers and exporters for whom AEO certification in Customs pay rich dividends in the form of AEO Certification benefits.
What is AEO certification in India is part of World Customs Organization (WCO)’s SAFE Framework of Standards to Secure and Facilitate Global Trade. Many other countries too have an operational AEO programme in place, some have it under development, while others have other customs-compliance programmes similar to what is AEO certification in India or close to AEO certification in Customs in general. Many of the latter approximate to what is AEO in customs but not exactly an AEO certification meaning formally certified under an AEO programme. The formal AEO certification meaning is well recognized in international trade.
AEO Certification Benefits
These AEO Programme certified companies enjoy many AEO Certification benefits by way of AEO certification in Customs. What is AEO in customs is essentially facilitation such as deferred payment of duty, reduced examination and priority treatment, 24X7 clearances, delivery of goods directly from wharf to warehouse, minimal intervention for compliant trade, reduction or waiver in Bank Guarantees, and higher facilitation than Accredited Client Programme, among other AEO Certification Benefits.
The Authorised Economic Operator Programme provides businesses with an internationally recognized security standard, promotes an AEO certified entity as a “secure” and “reliable” trade partner. The Indian AEO Programme incentivizes AEO entities with defined benefits that translate into savings in time and costs thereby enhancing business competitiveness.
These AEO certification benefits therefore play an important role in the success of these trading companies participating in the Indian AEO programme.
There are three tiers of AEO certification, AEO -T1, AEO-T2 and AEO-T3, under the Indian AEO programme each with its own level of AEO certification benefits.
Applying for AEO Certification under the Indian AEO programme
To be certified under the Authorized Economic Operator Programme (AEO Programme) with an AEO certification in Customs and avail of these AEO certification benefits under the Indian AEO programme for any of the three tiers entails a multiple-step application form as under:
| Sl. No | Annexure | Subject | Application for grant of | |||
| AEO- T1 | AEO- T2 | AEO- T3 | AEO- LO | |||
| 1 | Annexure-A | Application Form | YES | YES | YES | YES |
| 2 | Annexure-B | Security Plan | NO | YES | YES | YES |
| 3 | Annexure-C | Process Map | YES | YES | YES | YES |
| 4 | Annexure-D | Site Plan | YES | YES | YES | YES |
| Annexure-E | Self-Assessment Form | |||||
| 5 | Annexure- E.1 | General Compliance | YES | YES | YES | YES |
| 6 | Annexure- E.2 | Legal Compliance | YES | YES | YES | YES |
| 7 | Annexure- E.3 | Managing commercial and (where appropriate) transport records | YES | YES | YES | YES |
| 8 | Annexure- E.4 | Financial Solvency | YES | YES | YES | YES |
| 9 | Annexure- E.5 | Safety and Security | NO | YES | YES | YES |
| 10 | Annexure-F | Business Partner Details | NO | NO | YES | NO |
Getting certified under the Indian AEO Programme with MBG
Our Indirect Tax advisors at MBG Corporate Services have experience and expertise in various aspects of what is AEO certification in India, dealing with relevant departments to meet our clients’ Tier 1, Tier 2, or Tier 3 AEO requirements with the following AEO Programme services:
- Applying for grant of AEO status
- Helping self-assess AEO certification readiness in terms of CBIC requirements
- Representing in the meeting between entity and AEO specialist
- Clearing deficiency notes, if any received from the AEO team
- Removing shortcomings on specific issues
