Benefits of AEO

Changes to importing and exporting legislation brought in on 1st May 2016 meant that Authorised Economic Partner (AEO) status became increasingly important for all businesses involved in an international supply chain.

There are many benefits associated with obtaining this status, which have been outlined below.

Customs-related advantages

One major change within the UCC is that any businesses operating a ‘Special Procedure’ will be required to lodge a guarantee that is equivalent to one month’s potential duty and import VAT unless at the point that either their authorisation expires, or, in the case of open-ended authorisations like customs warehousing, HMRC reassess their ongoing authorisation with the following:

• The business has AEO accreditation, or
• The business can demonstrate that they meet the AEO criteria

On a practical level, AEO status means that items pass through customs as quickly as possible. It also means:

• It will be quicker and easier to obtain customs simplifications
• You will be subjected to fewer physical and document checks at borders
• If you are selected at controls, you will be given priority as an AEO consignment
• You can request that a control is held at a different place

Business advantages

AEO status is internationally recognised, which means you will be acknowledged as a “preferred supplier”. As a result, business opportunities are likely to rise, giving you the chance to expand within a network of accredited, vetted suppliers and transporters.

Other advantages for businesses include:

• More efficient transporting through borders
• Less risk and more effective checks on the reliability of third parties
• Potentially lower insurance premiums in the future
• More efficient import/export systems for those involved

Global advantages

AEO standards are not restricted to the EU, and this status will ensure your business enjoys the associated benefits in a number of international markets.

• More than 70 countries are included in the AEO, or a similar initiative
• There are opportunities for your business to expand into new territories with the benefit of a mutual “approved supplier” framework
• A more efficient approach to international customs

Financial advantages

The advantages brought about by AEO have efficiency, productivity and profits at their core. Faster customs checks, a global network of improved suppliers and a certificate of reliability and safety will have considerable benefits for any business.

To become an AEO operator, you must meet strict requirements, many of which are financial and must be checked by HMRC.

Financial advantages include:

• More efficient logistics, increasing profit
• Less risk when working with third parties
• A quicker, more efficient approach to customs reliefs and applications
• Preferential treatment from other businesses and customs itself

Watch our video to find out more about AEO