Recently Integration Point held a webcast on the European Union’s (EU) Union Customs Code (UCC) and what organizations need to know now that we are almost one year away from implementation.  The presenters were from the United Kingdom’s HM Revenue & Customs (HMRC) team that has been working on the UCC. During the webcast there were several questions that we were not able to answer due to time. The panel agreed to provide answers to those questions to be posted here.  The first set of Q&A deals with Authorised Economic Operator or AEO and why it is important in the UCC.

If you missed the webcast, you can view it on-demand here.

We are applying for the AEO certification at the moment. Once we receive this authority and have the certification, and for some reason our legal entity changes – how will that effect for our AEO certification, or will it? Will we need to re-apply under the new legal entity?

As part of the AEO terms and conditions the business is required to advise the AEO Central Site of any changes or amendments that may impact their authorisation. A change of legal entity may also require a change of EORI number as well. It would be advisable to plan, with the help of the AEO CS, these changes if possible to ensure limited impact on the business. It is likely that a new AEO status will be required for the new entity and this will require new checks to be undertaken – if the physical site, processes and procedures remain the same the impact should be minimal in terms of reassessment work that needs to be carried out.

 

How long does an AEO authorisation take?

We are legally obliged to issue a decision within 120 calendar days. There are extensions available to both the applicant and Customs should issues arise that need to be addressed. If we are unable to issue the decision within that timescale then the application is rejected. The business can of course reapply immediately and we can reuse any information already known to Customs. Depending on the size, complexity and readiness of the applicant together with the completeness of the application, the average start to finish of an authorisation period is in the region of 9/10 months.

 

Is AEO available to importers or only brokers / freight forwarders?­

AEO is available to any eligible business involved in the international supply chain where goods are moving under customs legislation e.g. importer, exporter, manufacturer, freight forwarder, customs agent, customs warehouse, port, shipper, airline etc. Business such as software suppliers, consultants, insurance companies are not eligible to apply for AEO. Banks would also normally be excluded from AEO unless it is part of their import/export activities.

 

Is the AEO program comparable to the CTPAT program in the United States?­

Yes. The EU Commission have in place a mutual recognition agreement (MRA) with the US.

C-TPAT currently focuses on security and safety only and therefore only EU AEOs with the security status can benefit from the MRA. For the EU AEOs this means facilitations at the US border including faster clearance. Currently the US MRA does not recognize freight agents within their C-TPAT programme so the benefits cannot be extended to those EU businesses.

However, MRA with Japan offers benefits to all AEOs with the security status. China will shortly be joining the EU programme along with Canada.

 

­­Is it required to have an AEO authorisation (C/S/F) to continue an end-use license after implementation of the UCC?­

No. An end-use authorisation will require some form of guarantee to be in place to continue post May 2016. However, the transition period will apply to this type of authorisation and a guarantee will only be required when the authorisation is amended, re-issued or the transition period ends. At that point, if you wish to benefit from a reduction or waiver of the guarantee requirements, you may wish to consider meeting the AEO criteria or apply for an AEO authorisation.

 

The next round of Q&A will focus on inward processing relief (IP or IPR) and Processing under Customs Control (PCC).  Stay tuned!