Authorised Economic Operator

New procedures for UK exporters
Since September 11th 2001 significant efforts have been made to increase the levels of International Security, not only for counter terrorism reasons, but also in the fight against organised crime and other threats to society. The introduction of Authorised Economic Operator (AEO) status is the European Community’s response to the need to secure international supply chains and the introduction of Customs-Trade Partnership Against Terrorism (C-TPAT) in the USA and the development of the Safe Framework of standards in the World Customs Organisation.

The aim of AEO status is to provide businesses with an internationally recognised quality mark which will indicate that their role in the international supply chain is secure and their customs controls and procedures are efficient and compliant.

What is an AEO?
An economic operator with AEO security and safety status implies that, apart from being reliable in the traditional financial and customs terms, the operator is also compliant in respect of security and safety standards and can therefore be considered as a “secure“ trader and thus a reliable trading partner.

This will enable the operator to benefit from a number of customs incentives when sending or receiving goods into or out of the European Union.

What are the benefits?
The award of AEO status will enable the operator to benefit from streamlined customs control procedures at entry and exit of the customs territory. The status will provide a number of benefits:

Allocate a lower risk score used to determine the frequency of physical and documentary checks
Fast track through customs
Receive priority treatment if the goods are stopped for checking
Reduce data requirements for the declarations scheduled to begin in 2009
Recognised status throughout Europe
An industry recognised “kite mark” allowing potential for future reciprocal arrangements with other trading partners such as the USA

EU Customs’ officials will be concentrating their efforts on those companies that have not complied with these new procedures. Failure to achieve AEO status could mean that operators are subjected to excessive delays leading to increased lead times.

All elements of the supply chain must conform to AEO standards and failure by one will invalidate the entire process. As it is likely that the EU will publish lists of those companies that do comply, businesses are more likely to do business with accredited companies than those who are not.

What needs to be done?
To achieve AEO status the operator must prove to HMRC that they have a safe and secure end to end supply chain. This will include:

An appropriate record of compliance
Proof of a satisfactory system of managing commercial, transport and customs records.
Proven financial solvency
A full safety and security audit of their business including the supply line in accordance with ISO 28001

What to do now?
Businesses that want to meet the new AEO standards will need to start preparing now to ensure that they can meet the standards required.

Four Pillars Security Ltd in co-operation with Scrutton Bland Accountants have developed a process to assist companies to reach certification and full details can be found here: