TaxTMI 
TaxTMI 
Authorized Economic Operator (AEO) programme for implementation
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....ty, etc. (ii) Inclusion of authorised couriers and custodians in the AEO Programme. (iii) Automatic disqualification on non-furnishing of the information by the applicant. (iv) Non-requirement of the compliance records of advocates directly employed by the applicant. (v) Outreach of AEO Programme by organizing workshops etc. (vi) The time limit of 90 days should be reckoned from the date of fumishing of complete information. (vii) In regard to security seals, in case it is not possible to procure and use PAS / ISO 17712 seals for air consignments / courier consignments any international seal compatible with standards of PAS / ISO 17712 may be used. However in case of maritime containerized cargo only PAS / ISO 17712 seals shall be used. The officers carrying out validations under AEO Programme should carefully ascertain this aspect. 3. The Central Board of Excise & Customs, New Delhi (Board) also decided that the benefits to various types of approved AEOs would be as under: A. For Importers: (a.) AEO importers would be entitled to facilitation levels that are higher than that for an ACP importer. (b....
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....ndling of cargo in Customs Area Regulation 2009 for longer period of ten years at a time. E. For Customs House Agents: (a) AEO Customs House Agents shall, under Regulation 11 of Customs House Agents Licensing Regulations (CHALR) 2004 be given benefit of extended validity period of licenses granted under regulation 9 till the time they hold valid AEO authorizations. (b) Fee for renewal of a licence under sub regulation (2) of regulation 11 of CHALR, 2004 shall be exempt for AEO Custom House Agents. F. For Warehouse Operators: (a) AEO Warehouse Operators are accorded faster approval for new warehouses. (b) AEO - Warehouse Operator shall be given benefits of reduced bank guarantee to the extent of 5% of the duty liability in respect of individual consignments of sensitive goods Ito be warehoused. Board Circular No 99/95-Cus. dated 20.09.1995 shall be modified to this extent. (c) In case of goods which are not likely to deteriorate, the warehousing period under section 61 of the Customs Act, 1962 may be extended by Commissioner of Customs, for a period not exceeding six months and by the Chief Commissioner of Customs for su....
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....chain in partnership with business entities that are fully legally compliant and provide with the Customs the confidence to validate their security features. Therefore, it is imperative that participating entities ensure they fulfill this fundamental requirement. 2. 2.1 Benefits of an AEO Programme: A business authorized by the Customs as an AEO can enjoy benefits flowing from being a more compliant and secure company as well as favourable consideration in any Customs proceedings coupled with better relations with Customs. AEO status will also ensure a low risk score is incorporated into Customs 'Risk Management System' (RMS) and used to determine the frequency of Customs physical and documentary checks. The benefits may also include simplified Customs procedure, declarations, etc. besides faster Customs clearance of consignments of/for AEO status holders. For the present, the following benefits will accrue to AEO status holders: 2.2 A. Importers: (a) (b) For AEO importers the facilitation shall be higher than for an ACP importer. AEO importers may be given benefit of reduce bank guarantee whe....
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.... 1.3 As aforestated, the AEO Programme seeks to secure the global supply chain in partnership with business entities that are fully legally compliant and provide with the Customs the confidence to validate their security features. Therefore, it is imperative that participating entities ensure they fulfill this fundamental requirement. 2. 2.1 Benefits of an AEO Programme: A business authorized by the Customs as an AEO can enjoy benefits flowing from being a more compliant and secure company as well as favourable consideration in any Customs proceedings coupled with better relations with Customs. AEO status will also ensure a low risk score is incorporated into Customs ‘Risk Management System' (RMS) and used to determine the frequency of Customs physical and documentary checks. The benefits may also include simplified Customs procedure, declarations, etc. besides faster Customs clearance of consignments of/for AEO status holders. 2.2 A. (a) For the present, the following benefits will accrue to AEO status holders: Importers: For AEO importers the facilitation shall be higher than for an ACP importer. (b) AEO impor....
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.... given benefit of extended validity period of licenses granted under regulation 9 of the CHALR 2004. The Licence granted under regulation 9 shall be valid till validity of their AEO authorization. Further fee for renewal of a licence under sub regulation (2) of regulation 11 shall be exempt. F. (a) (b) Warehouse Operators: AEO warehouse operators shall be accorded faster approval for new warehouses. AEO warehouse operator shall be given benefits of reduced bank guarantee to the extent of 5% of the duty liability in respect of individual consignments of sensitive goods to be warehoused. (c) In case of goods not likely to deteriorate, the Chief Commissioner of Customs may grant extension upto a period of six months at a time in deserving cases. 3. Criteria for considering application for grant of AEO status: (i) Appropriate record of compliance of Customs and other relevant laws; (ii) Satisfactory system of managing commercial and, where appropriate, transport records; (iii) Proven financial solvency; and (iv) Maintenance of approved security and safety standards. 5 4. 4.1 Who can apply for AEO status?....
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....atus(Annex - A) Security plan (Annex - B) Process map (Annex - C) Site plan (Annex - D) Self-Assessment Form (Annex - E) The application should be sent to the AEO Programme Manager, Directorate General of Inspection, Customs & Central Excise, 'D' Block, I.P. Bhawan, I.P. Estate, New Delhi - 110002. 5.3. The AEO Programme Manager will be the Additional Director General (Inspection), Directorate General of Inspection, Customs & Central Excise, 'D' Block, I.P. Bhawan, I.P. Estate, New Delhi - 110002 and the AEO Programme Team will comprise the officers from the Directorate General of Inspection and its regional offices. 5.4 Each application will be acknowledged and recorded in an AEO Programme database. 6. 6.1 Return of application: If application is incomplete or deficient, the applicant will be suitably informed within 30 days of the receipt. 6.2 AEO Programme Manager will not process the following applications until these are rectified, as indicated: (a) information. (b) Which is incomplete This may be resubmitted with the complete Where the application has not been made by a legal person - This can only ....
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....mpliance with the criteria of grant of AEO status. Thus, an AEO Programme Team will examine applicant's record of compliance over the last three years preceding the date of applicant's application to ensure adherence to Customs, Central Excise and Service Tax laws as well as allied laws that are administered by the Department. Major violations in respect of any other fiscal law such as relating to Income/Corporate Tax will also be taken into account to confirm the compliance level of the applicant. 10.2 Normally, ‘technical' or procedural errors, if any, made by an applicant over the past three years in relation to Customs, Central Excise and Service Tax laws that have no significant impact on the revenue or compliance record may not be considered a disqualification for grant of AEO status. This approach would extend to the various allied laws that are administered by the Department. These 'technical' or procedural errors may include the following: Any errors that have been voluntarily disclosed; Any decisions which have been overturned by Courts/Tribunal or departmental (i) (ii) review; (iii) Any decisions currently un....
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.... (v) Internal controls capable of detecting illegal or irregular transactions. Satisfactory procedures for the handling of licences, authorizations and documents connected to export/import. (vi) Satisfactory procedures to archive and retrieve records and information, and also for protection against the loss of information. (vii) Ensure that employees are made aware of the need to inform the Customs authorities whenever compliance difficulties are discovered and establish suitable contacts for this. (viii) (ix) intrusion. 12. Satisfactory procedures for verifying the accuracy of Customs declarations. Appropriate information technology security to protect against unauthorized Financial solvency 12.1 An applicant must be financially solvent for the three years preceding the date of application. Solvency would generally be defined as good financial standing that is sufficient to fulfill the commitments of the applicant including ability to pay duties. Thus, the applicant should not be listed currently as insolvent, or in liquidation or bankruptcy and should not have an outstanding claim against any guarantee in the la....
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.... safe, locked area. (c) All seals must meet the current PAS / ISO 17712 standards for high security seals. In cases it is not possible to procure and use PAS / ISO 17712 seals for air consignments / courier consignments any international seal compatible with standards of PAS / ISO 17712 shall be used. However in case of maritime containerized cargo only PAS / ISO 17712 seals shall be used. (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) When appropriate to the type of cargo container used, a seven-point inspection process is recommended: Front wall, Left side, Right side, Floor, Ceiling/Roof, Inside/outside doors, Outside/undercarriage. (g) Appropriate procedures should be laid down on measures to be taken when an unauthorized access or tampering is discovered. (h) It should not be possible to deliver goods to an unsupervised area. (i) Goods should be uniformly marked or stored in designated areas and procedures should exist to weigh / tal....
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...., (e) records. ensure that transporters make sure that conveyance integrity is maintained while the conveyance is en route transporting cargo to export/import points or import/transit containers by utilizing a tracking and monitoring activity log or (f) ensure that pre determined routes are identified by the dispatcher, and procedures must consist of random route checks along with documenting and verifying the length of time between the loading point/trailer pickup and the delivery destinations. (g) ensure that drivers must notify the dispatcher of any route delays due to weather, traffic and/or rerouting. (h) ensure that the management of transporters must perform a documented, periodic, and random verification process to ensure the logs are maintained and conveyance tracking and monitoring procedures are being followed and enforced. 11 13.6 Premises Security: In order to ensure premises security following measures steps should be taken. a) b) Buildings must be secure against unlawful entry. External and internal windows, gates and fences must be secured with locking devices or alternative access monitoring....
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....s terminated. 13.8. Business Partner Security (i) The applicant must have written and verifiable process, including the capability of financial soundness and compliance with the safety requirement set by the contracts as well as the capability of detection and correction of safety defects, for the selection of business partners. (ii) For those business partners having AEO certification, the applicant must get those business partners' copies of certification. (iii) For non-AEO partners, the applicant must get written confirmation of meeting AEO equivalent security criteria. Such business partners must have one of the following written documents demonstrating their compliance with security criteria: (a) Contractual document (b) (c) A completed self-assessment security questionnaire from the applicant. A written statement from the business partner demonstrating their compliance with AEO security criteria. (d) Senior business partner officer attesting to compliance. (e) Documents from the business partners demonstrating their compliance with and equivalent and accredited security program administered by a foreign Customs ....
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....tailed earlier, the AEO Programme Team will cover the following: Information on Customs matters. Remedial action taken on previous Customs errors, if any. Accounting and logistic systems. (i) (ii) (iv) Internal controls and procedures. Flow of cargo. (vi) (vii) (viii) (ix) (x) (xi) 14.7 Use of Customs House Agents. Security of Computers/IT and documents. Financial solvency. Safety and security assessment - premises, cargo, personnel etc. Logistic processes. Storage of goods. 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 f....
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....or example, company stationary, signage on vehicles or other publicity materials. The copyright for the logo is owned by the AEO Programme Manager on behalf of the Indian Customs Administration. 15.3. Once the applicant has received the Certificate of AEO Status, it will be activated within 10 days from the date 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 certificate of AEO status 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 aff....
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....AEO Programme Manager that his authorization be suspended in case he has detected some irregularities and needs some time to correct the situation. In this case, if necessary, this time period can be extended provided that the AEO Programme Team is satisfied that the difficulties cannot be resolved within a reasonable time. 18.4 When the AEO Programme Team is satisfied that the problems affecting certification have been satisfactorily resolved, it 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....
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....for and transported securely to the point of export/import from the point of origin. The security plan must detail the company's written and verifiable policies, processes, procedures etc., in respect of the following: Procedural security. Document security. Physical security. Access controls. Personnel security. Training and skill upgradation. Compliance with other Government security related requirements, if any. 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. flows. All access points to the site (e.g. vehicle, rail and pedestrian entrances) with traffic All buildings identified with access ways (e.g. administration office, export/import storage areas, export/import packing areas, export container movement). ....
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.... in a safe, locked area? Whether all seals meet the current PAS/ISO 17712 standards for high security seals? (d) Whether the integrity of container seals has been checked and appropriate procedure exists for the fixing of seals? and (e) Whether only designated personnel distribute container seals safeguard their appropriate and legitimate use? (f) Whether when appropriate to the type of cargo container used, a seven-point inspection process is in place i.e. Front wall, Left side, Right side, Floor, Ceiling/Roof, Inside/outside doors, Outside /undercarriage? (g) Whether appropriate 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 procedures exist control when discrepancies and/or irregularities are dis....
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....ndom route checks along with documenting and verifying the length of time between the loading point/trailer pickup and the delivery destinations is in place? Whether system of maintaining conveyance and trailer integrity is in place by utilizing a tracking and monitoring activity log or records? Yes No Remarks 23 (F) Premises Security 3.4 Premises Security: Yes No Remarks (a) Whether building is secured against unlawful entry? (b) Whether external and internal windows, gates and fences are (c) (d) (e) (f) (g) (h) (i) secured with locking devices or alternative access monitoring or control measures? Whether management or security personnel control the issuance of locks and keys? Whether adequate internal and external lighting has been provided especially for entrances and exits, cargo handling and storage areas, fence lines and parking areas? Whether gates through which vehicles and/or personnel enter/exit have been manned, monitored or otherwise controlled? Whether vehicles accessing restricted areas are parked in approved area and their li....
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.... put in place for verification by the AEO Programme Team? Whether a self assessment has been carried out by a person with extensive knowledge of the risks and threats applicable to his type of business? 25 25 (H) Business Partner Security 3.6 Business Partner Security (a) Whether applicant have written and verifiable process, including the capability of financial soundness and compliance with the safety requirement set by the contracts as well as the capability of detection and correction of safety defects, for the selection of business partners.? (b) Whether applicant has business partners' copies of certification for those business partners eligible for AEO certification?. (c) Whether for business partners without AEOS certificate, one of the following written documents demonstrating their compliance with security criteria has been obtained ? (i) (ii) Contractual document A completed self- assessment security questionnaire from the applicant. (iii) A written statement from the business partner demonstrating their compliance with AEOS security criteria. ....