Key criteria you need to fulfil to become an Authorised Economic Operator
The Authorised Economic Operator (AEO) permit is one of the fundamentals for accessing the simplifications and benefits laid out in the UCC. But what are the requirements you need to fulfil? Learn about five key criteria you need to meet when applying for AEO.
Any economic operator established in the customs territory of the Union who is part of the international supply chain and is involved in customs-related operations, may apply for the AEO permit. To be rewarded with an AEO permit you need to have solid, documented routines regarding all logistical, accounting, security and safety processes. Listed below are five fundamental criteria you need to fulfil:
1. Compliance with customs legislation and taxation rules, and absence of criminal offences related to the economic activity
Customs will check your record of compliance with customs and tax requirements for your business over the last 3 years. They will also look at whether serious or repeated infringements of customs rules have been committed by your business, the people managing your business, the people in your business responsible for customs-related matters, and your legal representative for customs matters.
2. Appropriate record keeping
The applicant should have a satisfactory system of managing commercial and, where appropriate, transport records. You’ll need to have an appropriate logistical and accounting system with a full audit trail, and an appropriate level of administrative organisation with documented procedures to control and manage the flow of goods. The procedures should contain internal controls to detect irregular transactions and to handle certain licences and authorisations.
3. Financial solvency
You have to prove you’ve been financially solvent for 3 years before your application.
4. Proven practical standards of competence or professional qualifications
The applicant should demonstrate an evidence of practical competence over the previous 3 years. Depending on the size and type of the business, the person that needs to be competent could be the AEO applicant, or the person in charge of customs-related matters. For example, where the work is outsourced to one or more business partners, they must be competent to carry out that role.
5. Appropriate security and safety measures
The applicant should have a safety and security risk assessment in place. In terms of physical security there should be secured external boundaries and measures to protect cargo units, and to prevent unauthorised access to storage, shipping areas, loading docks and cargo areas. Appropriate safety and security measures should be agreed with partners and suppliers.
The AEO permit enables simplifications that will result in a more secure flow of goods and lower costs. Implementation of the UCC will further increase the advantages. It may therefore be well worth the time to evaluate what an AEO permit could mean for you, and what needs to be done to accomplish the required criteria in more detail.
If you have any questions, please feel free to contact:
Catharina Olofsson, Consulting Director