TaxTMI 
TaxTMI 
TaxTMI 
Authorized Economic Operator (AEO) programme for implementation.
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.... Customs administrations have already instituted AEO programmes or similar programmes which share a common objective of ensuring security in global supply chain from the point of origin i.e. the point of export to import in the receiving country, keeping in view national requirements of respective administrations. The detailed guidelines on implementation of the AEO programme are appended as 'Annexure' to this Circular. 2. One of the salient features of the AEO programme is that any economic operator such as importer, exporter, logistics provider, Customs House Agent can apply for authorization subject to the criteria that the applicant is: (i) able to establish a record of compliance in respect of Customs and other legal provisions. (ii) able to demonstrate satisfactory systems of managing commercial and, where appropriate, transport records. (iii) financially solvent. (iv) able to demonstrate satisfactory systems in respect of security and safety standards. 3. The AEO programme shall be implemented by the Directorate General of Inspection (DGICCE) and Additional Director General, DGICCE (HQ), New Delhi will be the AEO Programme Manager. The AEO Programme Manager shall be as....
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....005 the World Customs Organisation (WCO), an organization of 178 Customs administrations, adopted the SAFE Framework of Standards to secure and facilitate global trade, which includes the concept of an Authorized Economic Operator (AEO) whereby a party engaged in the international movement of goods is approved by Customs as compliant with the supply chain security standards, and given benefits, such as simplified Customs procedures and reduced Customs intervention. The AEO concept is being increasingly adopted by various Customs administrations with the objective of securing the supply chain with resultant benefits for the trading community. 1.2 Consistent with the "SAFE Framework" developed by the WCO, the Indian Customs administration has developed an AEO Programme that encompasses various players in the international supply chain such as importers, exporters, warehouse owners, Custom House Agents, cargo forwarders and carriers. The objective of the AEO Programme is to provide businesses with an internationally recognized quality mark which will indicate their secure role in the international supply chain and that their Customs procedures are efficient and compliant. An entity w....
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....rk / activities will not be entitled to apply. This means that in general banks, insurance companies, consultants and the like categories of businesses will not be eligible for AEO status. 4.4 The application for AEO status will only cover the legal entity of the applicant and will not automatically apply to a group of companies. 4.5 There is no provision to grant AEO status to specific site, division or branch of legal entity of the applicant. The application must cover all the activities and locations of the legal entity involved in the international trade supply chain and the identified criteria will be applied across all those activities and locations. 4.6 In order to apply for AEO status the applicant must be established in India. For this purpose, the applicant will be asked to provide evidence which may include: (i) A certificate of registration issued by the Registrar of Companies. (ii) Details of where staff is employed for making supplies of goods and/or services. (iii) Proof that the business has its own accounts. 4.7 An AEO status applies only to the legal entity applying for such status in its own capacity and covering its role in the international supply c....
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.... and, where appropriate, transport records. (iii) Financially solvent. (iv) Able to demonstrate satisfactory systems in respect of security and safety standards. 7.2. Once the application has been accepted, the applicant will be suitably informed of this within 30 days. The application will then be passed to the AEO Programme Team which will by prior appointment visit the applicant's premises and carry out an AEO verification and make a recommendation to the AEO Programme Manager. 8. Rejection of application: 8.1 Applications will be rejected in cases where the applicant is not eligible for grant of AEO status, or has been convicted of a serious criminal offence linked to the economic activity of his business in the past, or in cases where the deficiency noticed in the application cannot be remedied. The information regarding the rejection of such application will be given to the applicant within 30 days of the receipt of the application. 9. Time limit for grant of AEO certificate: 9.1 Applications meeting the identified criteria will be granted the AEO status ordinarily within 90 days of receipt of the completed application. 10. Compliance 10.1 An applicant must meet cer....
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....any Secretary; (iii) Advocates directly employed by the applicant; and (iv) Employees directly responsible for the import/export of goods. 10.8 Any errors made by third parties acting on applicant's behalf would reflect upon the applicant's compliance. Thus, the applicant should make such third parties aware of the standards that he operates to and that systems are in place to immediately identify any problems. 11. Managing commercial and (where appropriate) transport records 11.1 For the purpose of AEO status the applicant must have a satisfactory system of managing commercial and, where appropriate, transport records. Such a system may include the following: (i) An accounting system consistent with Generally Accepted Accounting Principles (GAAP) / International Financial Reporting Standards (IFRS) which facilitates audit-based Customs control. (ii) Allowing the AEO Programme Team physical or electronic access to Customs and, where appropriate, transport records. (iii) An ministrative set up and documented procedures to control and manage the movement of goods. (iv) Internal controls capable of detecting illegal or irregular transactions. (v) Satisfactory procedures for ....
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.... business or have just started trading, his financial solvency will be judged on the basis of records and information. This will include the latest: (i) Cash flow figures. (ii) Balance sheet. (iii) Profit and loss forecasts approved by directors/partners/sole proprietor. 13. Safety and security 13.1 Internal controls and measures to secure the safety of applicant's business and his supply chain will be considered in addition to any specific legal requirements that may be applicable to the business. 13.2 In order to satisfy the requirements of AEO status, the applicant will need to ensure security of import/export cargo, conveyances, premises, etc. 13.3 Cargo Security: (a) Only properly identified and authorised persons should have access to the cargo. (b) Integrity of cargo should be ensured by permanent monitoring or keeping in a safe, locked area. (c) All seals must meet the current PAS / ISO 17712 standards for high security seals. (d) The integrity of container seals should be checked and appropriate procedure should exist for the fixing of seals. (e) Only designated personnel should distribute container seals and safeguard their appropriate and legitimate use. (f)....
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....(g) Access to document or cargo storage areas may be restricted. (h) There should be appropriate security systems for theft and/or access control. (i) Restricted areas should be clearly identified. (j) The integrity of structures and systems must be periodically inspected. (k) Perimeter fencing should enclose the areas around cargo handling and storage facilities. (l) Interior fencing within a cargo handling structure should be used to segregate domestic, international, high value and hazardous cargo. (m) All fencing must be regularly inspected for integrity and damage. (n) The number of gates should be kept to the minimum necessary for proper access and safety. (o) Private passenger vehicles should be prohibited from parking in or adjacent to cargo handling and storage areas. 13.6 Personnel Security: (a) All reasonable precautions must be taken when recruiting new staff to verify that they are not previously convicted of security-related, Customs or other criminal offences. (b) Periodic background checks must be conducted on employees working in security sensitive positions. (c) Employee identification procedures should require all employees to carry proper identificat....
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....edial action taken on previous Customs errors, if any. (iii) Accounting and logistic systems. (iv) Internal controls and procedures. (v) Flow of cargo. (vi) Use of Customs House Agents. (vii) Security of Computers/IT and documents. (viii) Financial solvency. (ix) Safety and security assessment - premises, cargo, personnel etc. (x) Logistic processes. (xi) Storage of goods. 14.7 The person who is nominated in the application form as point of contact must ordinarily be available unless unforeseeable situation arises. In addition, individuals responsible for specific business activities such as transport, record keeping and security should also be available. 14.8 In case several sites of applicant are run in a similar way by standard systems of record keeping and security etc. there will be no need for the AEO Programme Team to audit all of them. However, if the business of the applicant covers a range of activities or different sites have different method of operating, then it may be necessary for more visits to be made. 14.9 The duration of visit/verification would depend on the size of business, number of sites, how they operate etc. The AEO Programme Team will give the....
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....ate of issue. Following this period, the applicant should enter the certificate number on all Customs documentation to indicate their AEO Status. 15.4. It is highly recommended that the applicant should keep the Certificate of AEO status at a safe place and not release the Certificate number to anyone unless required to do so for business purposes. Although the AEO status can be advertised by the applicant, the Certificate number should not be part of their advertisement. 15.5. The validity of AEO authorization shall be for three years. 16. Maintaining AEO Status: 16.1. After obtaining AEO status, the AEO status holder should maintain their eligibility by adhering to the appropriate standards. 16.2. The holder of a Certificate of AEO Status is required to notify any significant change in business and processes this may affect the AEO status to the AEO Programme Team. These changes may include the following: (i) Change to the legal entity. (ii) Change of business name and/or address. (iii) Change in the nature of business i.e. manufacturer / exporter etc. (iv) Changes to accounting and computer systems. (v) Changes to the senior personnel responsible for Customs matters. ....
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....m is satisfied that the problems affecting certification have been satisfactorily resolved, the AEO Programme Team will make suitable recommendation to the AEO Programme Manager who will withdraw the suspension under intimation to the AEO status holder and the AEO Programme Team. 18.5. On suspension of AEO authorization, the intimation of the same shall be communicated to all Customs formations with immediate effect by AEO Programme Team. 19. Revocation of AEO Status: 19.1. In following circumstances, the Certificate of AEO Status will be revoked: (a) Where the Certificate of AEO Status is already suspended and the AEO holder fails to take the remedial measure to have the suspension withdrawn. (b) Where the AEO status holder has committed serious infringement of Customs law and has no further right to appeal. (c) Where the AEO status holder requests the authorization be revoked. 19.2. Prior to any decision to revoke authorization, the applicant will be contacted. Any decision taken in this regard will be subject to right of appeal of applicant. Revocation is applied from the day following the authorization holder being notified. 19.3. In case the authorization is revoked, ....
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....************************** Annexure - C PROCESS MAP Process map which illustrates the flow of goods and documentation/information from receipt of order to the point of export/delivery/receipt of the product. Annexure - D SITE PLAN The site plan should cover the whole area managed by the company, clearly illustrating the following (if present): * The external perimeter of the area, including features such as boundary roads, railway lines, streams/rivers, neighbouring properties. * All access points to the site (e.g. vehicle, rail and pedestrian entrances) with traffic flows. * All buildings identified with access ways (e.g. administration office, export/import storage areas, export/import packing areas, export container movement). * Internal and/or external lighting facilities that contribute to security. * Other security features (e.g. CCTV, electronic access gates). * Visitor, contractor and company personnel parking areas. * Perimeter fences with description (e.g. 2-metre high security fence). * Areas used for container storage. ********************************************* Annexure - E SELF-ASSESSMENT FORM (A) Compliance 1 Compliance Yes No Rem....
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....ppropriate procedures have been laid down on measures to be taken when an unauthorized access or tampering is discovered? (h) Whether it is possible to deliver goods to an unsupervised area? (i) Whether goods have been uniformly marked or stored in designated areas and procedures exist to weigh / tally them and compare them against transport documents, purchase/sales orders and Customs papers? (j) Whether internal control procedures exist when discrepancies and/or irregularities are discovered? (D) Conveyance Security 3.2 Conveyance Security Yes No Remarks (a) Whether all conveyances used for the transportation of cargo within the supply chain are capable of being effectively secured? (b) Whether all operators of conveyances used for transport of cargo are trained to maintain the security of the conveyance and the cargo at all times while in its custody? (c) Whether there is a system for operators to report actual or suspicious incident to designated security department staff of both the AEO Programme Team and Customs as well as to maintain records of these reports which should be made available to Customs? (d) Whether potential places of concealment of illegal....