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Is it important to get Authorised Economic Operator (AEO) status?

Bee Newboult profile face photo

03/10/2022

Marketing and Communications Manager UK/IE

The trust mark has been adopted by traders and logistics service providers around the globe. But, how important is it for you to get AEO status? And what are the benefits? The benefits of AEO status depend on the type of business you are conducting and the type of license you acquire.

What type of AEO licenses are there?

There are three types of Authorised Economic Operator (AEO) licences in the EU and U.K:

  • Authorised Economic Operator – Customs Simplification (AEOC)
  • Authorised Economic Operator – Security and Safety (AEOS)
  • Authorised Economic Operator – Full C+S (AEOF) 

The type of license that you will need depends on how your business operates:

AEOC

The AEOC license is granted to companies that prove their compliance with customs processes, financial solvency, and record keeping. AEOC is mostly used by customs brokers, freight forwarders, and other traders who do not physically possess the goods but are involved in supply chain management. Depending on where you are trading to/from, the benefits of AEOC can include:

  • Fewer documentation checks and fewer physical checks.
  • Simplified declarations.
  • More notice on shipments selected for inspection.
  • Priority processing at border control posts.
  • Customs inspections are carried out in more convenient locations.
  • Lower collateral against guarantees.

AEOS

The AEOS license is granted to companies that prove themselves compliant in their customs and administration processes, as well as in their safety and security standards. AEOS is mostly used by traders and logistics providers who physically possess or transport the goods, including storage facilities. Compliance in safety and security is increasing worldwide, so AEOS is becoming more sought after by companies looking to establish themselves as efficient in their processes. AEOS can also be used by companies to assist in acquiring other safety and security authorisations. Depending on where you are trading to/from, the benefits of AEOC (AEOS) can include:

  • Fewer documentation checks and fewer physical checks.
  • More notice on shipments selected for inspection.
  • Priority processing at border control posts.
  • Customs inspections are carried out in more convenient locations.
  • Recognition of compliance by non-AEO countries.
  • Simplified in combination with Customs Warehouse application

AEOF

It is possible to hold both the AEOC and AEOS licenses at the same time, which some companies refer to as the Authorised Economic Operator – Full license. A full license is used by companies who both manage supply chains and physically handle the goods, as well as those looking to establish themselves as industry leaders.

Are there Authorised Economic Operator equivalents outside of the EU?

Outside of the EU, there are various equivalents of the Authorised Economic Operator trust mark. For example:

  • Canada uses the Partners in Protection (PIP) program.
  • The USA operates the Customs-Trade Partnership Against Terrorism (CTPAT).

There are also some other operations in the EU which serve as trust marks for traders:

  • The Safe and Secure Trade Lanes (SAFE) network.
  • The Consistently Optimised Resilient Secure Global Supply Chains (CORe) network.

Do you need to get AEO certified?

As cargo movement volumes increase through ports around the world, and border agents continue to be limited by the resources available to them, the importance of trust marks will increase so that their attention can be focused on riskier shipments. If you do not have AEO, or another equivalent, then you might be at risk of a higher customs inspection rate. In addition to this, the other benefits of AEO include:

  • A recognised trust mark when liaising with potential business partners.
  • Confidence in your internal processes.
  • Introduction to supply chains that require AEO to avoid additional costs or administration for other companies involved.

If you want more information on Authorised Economic Operator licenses, why not contact one of our consultants today?