What is AEO status?

Authorised Economic Operator (AEO) status is a voluntary scheme operated in the UK by HM Revenue & Customs (HMRC) that can provide specific benefits for importers, exporters and others in the international supply chain. It can reduce the time required for customs clearance and reduce requirements for some activities such as inward processing relief and customs warehouse operation. It can also enhance the organisation’s status as a secure business partner. AEO will continue to operate during and after the transition period.

Facts about AEO

• AEO is established by EU legislation and is compatible with the US system C-TPAT.
• It is suitable for all businesses involved in the international trade supply chain, including exporters, importers, freight companies, port authorities and customs brokers.
• It provides benefits for traders including “fast track” through customs clearance and less onerous terms on operating customs warehouses.
• You can only apply for AEO if you trade with non-EU countries.
• There are three versions of AEO status:
  • AEO C — Customs Simplifications
  • AEO S — Security and Safety
  • AEO F — Full status, comprising both of the above.

What do you need to do?

1. A business or organisation considering applying for AEO status needs to review their business needs to decide which type of AEO is required. Use our checklist to help you.
2. Achieving AEO C means you must meet the given criteria for: compliance; record keeping; solvency; professional qualifications and practical standards of competence. Achieving AEO S means you must meet all of the above criteria as well as additional criteria for security.
3. Any applicant must first have an Economic Operator Registration and Identification (EORI) number. If you don’t already have this, you need to complete this application first.
4. The application process is demanding and time-consuming with planning often taking up to a year. The applicant will need to demonstrate a knowledge of the requirements and evidence that they have met them. Preparation for the application is vital.
5. Applications for AEO status are submitted to HMRC in the UK on forms C117 and C118, the latter being a self-assessment questionnaire.
6. For compliance, HMRC will check your company’s record of compliance for the past three years. It will look for evidence of procedures to ensure future compliance.
7. HMRC will audit companies that have applied for AEO status, but the time taken for the customs approval process will depend on the nature and size of each business.
8. Once authorised, businesses must ensure they maintain the required standards and work with HMRC to address any business changes that may impact on their approval. If HMRC is not satisfied a business is maintaining the required standards, the AEO status can be suspended or withdrawn.
9. If you have AEO S or the combined AEO F status you can benefit from arrangements under Mutual Recognition Agreements (MRAs). MRAs are negotiated by the EU with third country customs authorities. Normally the benefits will reflect those for AEO, for example, faster clearance at the frontier, less interventions and lower risk scores.
10. While AEO does not require specific qualifications or training, applicants should consider any need for training of key personnel.