Authorized Economic Operator (AEO)
The Authorized Economic Operator (AEO) is an essential part of the modern EU security concept. This evolved from the “Framework of Standard to Secure and Facilitate Global Trade” (SAFE) of the World Customs Organization (WCO). The WCO was established because of increasing globalization and changes in the international security situation. The aim was to create a global framework for modern, effective risk management in customs administrations.
At the European level, the security aspects of “SAFE” were introduced in 2005 through security amendments to the Customs Code and Customs Code Implementing Regulations. In 2016, this was repealed and replaced by the Union Customs Code (UZK), Implementing Regulation (IA) and Delegated Regulation (DA). For this purpose, the Authorized Economic Operator was introduced.
Since 2008, companies based in the EU have been able to apply for AEO (Authorized Economic Operator) status. This is intended to safeguard the international supply chain from the manufacturer to the end consumer. However, this requires worldwide recognition of the AEO status. This already works in Switzerland, Norway, Japan, the USA and China, for example, with further negotiations underway in parallel.
In all member states, the AEO applies equally and is not limited in time. Three different status variants apply:
- AEO Authorization “Customs Simplifications” (AEOC)
- AEO authorization “Security” (AEOS)
- AEO authorization “Customs Simplifications and Security (AEOC and AEOS) ➔ combined authorization
The legal conditions of an AEO come from the Union Customs Code (UZK), the Implementing Regulation (IA) and the Delegated Regulation (DA). As an aid, there are the guidelines “Authorized Economic Operators”.
The European Commission continuously updates a list of AEO-approved companies that have agreed to publish AEO information. In addition, an e-learning program is being set up, which is also available in English. Information and learning programs are provided there, and above all the advantages of an AEO and its granting procedure are explained.
How to become an AEO?
In Germany, an application to become an AEO (Authorized Economic Operator) is submitted to the responsible main customs office. The electronic application is made either via the Internet application “AEO authorization” or with the paper form “0390”.
Application via internet form:
- Fill out application form on the Internet
- Print it out and have it signed by the applicant’s representative
- Submit to the competent main customs office together with the completed customs authorization questionnaire (in electronic form, e.g. CD-ROM).
Application in paper form:
- Complete Form 0390 (for assistance, see the information sheet following Form 0391)
- Submit to the responsible main customs office together with the questionnaire for the form, if possible in electronic form.
Notes on the application form
Who can submit an application?
Economic operators are natural or legal persons or associations of persons who carry out activities covered by customs law. In principle, all economic operators established in the customs territory of the European Union can apply for AEO (Authorized Economic Operator) status.
In addition, all provisions governing cross-border trade in goods with third countries apply, such as market regulation, goods origin and preference law, foreign trade law, prohibitions and restrictions, and excise and import VAT law.
Thus, economic operators include, for example: Manufacturers, warehouse keepers, customs agents, exporters, forwarding agents, carriers or freight forwarders and importers.
Who can sign an application?
The application may be signed by any person authorized to do so by the applying company.
Notes on the questionnaire for customs conditions
The questionnaire for customs conditions serves the customs administration to form a comprehensive picture of the company and is therefore mandatory to submit. Existing expert opinions and criteria that are enclosed can speed up the processing of the application if they correspond to and support the criteria to be met, but are not required.
Notes on the security declaration
- Can make entire supply chain more secure if a business partner does not hold a combined authorization (AEOC, AEOS) or AEOS
- Not mandatory
- Not required by every business partner
- In conjunction with an AEO application, a reference to application is sufficient, no security declaration required
- No specific rules regarding liability, as it is considered a civil matter and responsibility between companies
What are the advantages of AEO status?
The AEO status has recently increased significantly in importance, so that it will have to fulfill similar criteria as the AEOC. Some simplifications and authorizations now even require AEOC status, such as:
- “Art. 95(3) of the UZK – Total security with reduced amount for a customs debt incurred and other duties incurred.
- 179 UZK – central customs clearance
- 182 (3) UZK – entry in the declarant’s accounts with presentation exemption
185 UZK – “Self-inspection“
AEO criteria are only partially necessary for these authorizations and simplifications:
- ” Art. 18 (3) of the UZK – customs representation in other EU member states (Union-wide representation); fulfillment Art.39 a) to d) of the CCC.
- 73 UZK and Art. 71 DA – authorization for simplified customs valuation; fulfillment Art. 39 a) UZK
- 95 (1) UZK – authorization of a comprehensive guarantee; fulfillment of Art. 39 a) and, if applicable, d) UZK
- 95 (2) UZK – approval of a comprehensive guarantee with a reduced amount or exemption from the provision of a guarantee; fulfillment of Art. 39 b) and c) UZK
- 96 (2) UZK – authorization to use a temporarily prohibited comprehensive guarantee; compliance with Art. 39 b) and c) UZK
- 153 UZK and Art. 128 DA – Authorization to become an Authorized Issuer; fulfillment Art. 39 a) and b) UZK
- 155 UZK and Art. 120 DA – Authorization to establish a regular service; compliance Art. 39 a) UZK
- 163 UZK and Art. 155 DA – authorization for the establishment of weighing certificates for bananas; compliance Art. 39 a) UZK
- 166 UZK and Art. 145 DA – authorization for regular use of simplified customs declarations; compliance with Art. 39 a) UZK
- 182 (1) UZK and Art. 150 DA – authorization to lodge a customs declaration as an entry in the declarant’s records; compliance with Art. 39 a), b) and d) UZK
- 230 UZK and Art. 187 DA – Authorization of the Authorized Consignee for TIR purposes; compliance with Art. 39 a), b) and d) UZK
- 233 (4) UZK and Art. 191 DA – Authorization for simplifications in the Union transit procedure; compliance with Art. 39 a), b) and d) UZK“
Benefits under Article 38 UZK
AEOC Permit Holder:
All requirements must be met for the customs authority to approve the desired simplification. Criteria that have already been checked during status approval are not checked again.
AEOS Permit Holder:
A pre-departure declaration in the form of a customs declaration or a re-export declaration may be made, in which case no information other than that required in the declarations is required.
AEO Authorization Holder::
Goods or documents are inspected less frequently, only when deemed necessary after a risk analysis. The holder of the authorization may be informed before the inspection or may request that the inspection be carried out at a place other than the place where the goods are presented.
Switzerland, Norway, Japan, the USA and China are countries outside the EU that accept AEO status. Depending on the corresponding agreement with the country, there are corresponding advantages. These include, for example, consideration in risk assessment with reduced controls and in other security-related measures.
Holders of a combined authorization or an AEOS authorization can only benefit from these advantages if there is agreement from both sides for mutual data exchange. For example, for registration with the U.S., the EORI number must be provided in the “MR-web-application”, which is then linked to the MID number. For example, when trading with Japan, EU AEO permit holders will receive a personal 12-digit Japanese identification number.
When exporting goods to recognized third countries, the trading partners should therefore provide the issued identification numbers in the customs declarations so that the entitlement to these benefits is shown and recognizable.
It is not mandatory for economic operators to apply for AEO status, but there are nevertheless some indirect benefits. For example, the status brings process optimization and internal control mechanisms. This means there is less theft and less unexplained loss of goods. In addition, there are fewer shipping delays, fewer security incidents and better cooperation with business partners. The status is thus seen as a seal of quality that creates additional competitive advantages.
Under the old customs law, the advantages of an AEO were quite limited and the status was not necessary. Even though AEO has become established, even with new customs law, many procedural facilitations remain readily available without an AEO authorization, and benefits of AEO status are hardly noticeable, according to companies.
Without having to be or become an AEO, a security declaration can be added during negotiations between the customer and the supplier to assure compliance with security standards.
In summary, obtaining Authorized Economic Operator status may not be mandatory or absolutely necessary. However, it does bring some benefits and may well be worthwhile for a company.