√ AEO is a trade facilitation scheme for ease of doing business in light of international development, holder of this certificate is entitled for privilege, benefits, exemption and relaxation on account of import and export. This certificate is issued for particular period after that to be renewed.
√ This scheme is based on principle of sharing role and responsibility of customs with trade and industry and objective is to delink payment and clearance, to accept paperless declaration, increases efficiency, self certification, earliest refund and drawback, request based examination/inspection etc.
√ ACP (accredited client program) and old AEO (authorized economic operator) is merged together and resulted into three certification namely AEO-T1, AEO-T2, AEO-T3, AEO-LO.
√ This three tier certification is launched by Customs Circular No. 33/2016 dated 22th July, 2016 (in suppression of Circulars No. 42/2005 dated 24.11.2005– old ACP scheme and Circulars No. 28/2012-Customs dated 16.11.2012– old AEO programme).
Validity and Renewal of AEO
| AEO status | Applicability | Validity | Time limit for submission of application for renewal before lapse of validity |
| AEO-T1 | Granted only to an importer or to an exporter without physical verification of places/premises. | 3 Year | 30 days |
| AEO-T2 | Granted only to an importer or to an exporter after physical verification of premises/places. | 3 Year | 60 days |
| AEO-T3 | Granted to (i) an importer or to an exporter who continuously enjoyed the status of AEO-T2 for a period of two years preceding the date of application or (ii) The importer/exporter holding AEO-T2 certificate, and its other business partners namely importers or exporters, Logistics service providers, Custodians/Terminal operators, Customs Brokers and Warehouse operators are holders of AEO-T2or AEO-LO certificate or any other equivalent AEO certificate granted by a foreign Customs. | 5Year | 90 days |
| AEO-LO | Granted to economic operators other than importers and exporters, (e.g. Logistics Providers, Custodians or Terminal Operators, Customs Brokers ,Warehouse Operators) after physical verification of premises/places. | 5 Year | 90 days |
Treatment of existing AEOs and ACPs
♠ Existing AEOs
♠ Existing ACPs
Who is entitled for AEO Certification
AEO for SME Enterprises
AEO is applicable to OLD Company or new company
Who is not entitled for AEO certification
Businesses that are not engaged in Customs related work / activities will not be entitled to apply, in general, banks, insurance companies, consultants and the like categories of businesses will not be eligible for AEO status.
AEO is branch wise or entity wise
AEO status of Customs Broker and AEO status of Importer/Exporter are Independent
AEO Is Applicable To OLD Company Or New Company
Communication between AEO programme Manager and Importer/ Exporter
All communication between AEO/AEO applicants and Programme Manager shall be through e-mail at Aeo [email protected].in.
Benefits of certificate under AEO scheme for all (AEO-T1, T2, T3)
| Benefits | AEO-T1 | AEO-T2 | AEO-T3 |
| Shorter cargo release time | Yes | Yes | Yes |
| Direct Port Delivery (DPD) / or Direct Port Entry (DPE | Yes | Yes | Yes |
| ID to authorized personnel | Yes | Yes | Yes |
| Separate space earmarked in Custodian’s premises. | Yes | Yes | Yes |
| Bank Guarantee only to extent | 50% | 25% | 0.00% |
| Investigations | in six to nine months | Six month | Six month |
| Dispute resolution | within six months. | six | six |
| e-mail regarding arrival/ departure of the vessel | Yes | Yes | Yes |
| 24/7 clearances on request at all sea ports and airports | Yes | Yes | Yes |
| No Merchant Overtime Fee (MOT) charges need to be paid | Yes | Yes | Yes |
| Waiver of seal verification/scrutiny of documents . | No | Yes | Yes |
| out of charge/let export order without any scrutiny by the officers | No | Yes | Yes |
| Front line of treatment for container scanning. | No | Yes | No selection for scanning |
| Facility of deferred payment of duty | No | Yes | Yes |
| Disbursal of drawback amount | within 72 hours of EGM submission | faster | |
| Assessment and/or Examination on priority | Yes | Yes | Yes |
| Faster completion of Special Valuation Branch (‘SVB’) proceedings | No | Yes, in time bound manner | Yes |
| Facility to paste MRP stickers in their premises | No | Yes | Yes |
| Post clearance audit | Yes | onsite PCA will be conducted once in three years only, no regular PCA. | On Intelligence information |
| Access to their consolidated import/export data through ICEGATE | No | Yes | Yes |
| Facility of submitting paperless declarations with no supporting documents in physical form | No | Yes | Yes |
| Client Relationship Manager”(CRM) at AC/DC level at all port | No | Yes | Yes |
Benefits for AEO under Advance Authorization scheme of under Foreign Trade Policy
AEO status holder shall be issued advance authorization on self certification and declaration basis without ratification by the Norms Committee.
Benefits for AEO-LO certificate
ü Waiver of bank Guarantee.
ü Facility of Execution of running bond.
ü Exemption from permission in case of transit of goods.
ü Waiver of Bank Guarantee
ü Extended validity (till validity of AEO status) of licenses
ü System Manager to incorporate date of validity of AEO from time to time in the System Directory
ü Waiver from fee for renewal of license.
ü Faster approval for new warehouses within 7 days of submission of complete documents
ü Waiver of antecedent verification envisaged for grant of license for warehouse under circular 26/2016
ü Waiver of solvency certificate requirement under circular 24/2016
ü Waiver of security for obtaining extension in warehousing period under circular 21/2016
ü Waiver of bank Guarantee
ü Extension of approval for custodians under regulation 10(2) of the ‘Handling of cargo in Customs Area Regulation 2009 ‘for period of 10 years.
What Is Deferred Duty Payment Under Customs (Delinking duty payment and Customs clearance)
In terms of customs Notification No. 135/2016-Customs, Importers certified under Authorized Economic Operator programme as AEO (Tier-Two) and AEO (Tier-Three) are entitled for payment of duty under deferred payment scheme, means option of deferred payment is extended only to AEO-T2 and AEO-T3 certificate holder.
| Date of bill of entry | Duty shall be paid |
| 1st day to 15th day of any month. | By the 16th day of that month |
| 16th day till the last day of any month except march | By the 1st day of the following month. |
| 16th day till the 31st day of March | By the 31st March. |
The eligible importer who intends to make deferred payment shall indicate the same using flag “D” in the Payment Method column of Bill of Entry filed.
Application for an AEO certificate
| Sl. No | Annexure | Subject | Application for grant of | |||
| AEO- T1 | AEO- T2 | AEO- T3 | AEO- LO | |||
| 1 | Annexure-A | Application Form | YES | YES | YES | YES |
| 2 | Annexure-B | Security Plan | NO | YES | YES | YES |
| 3 | Annexure-C | Process Map | YES | YES | YES | YES |
| 4 | Annexure-D | Site Plan | YES | YES | YES | YES |
| Annexure-E | Self-Assessment Form | |||||
| 5 | Annexure- E.1 | General Compliance | YES | YES | YES | YES |
| 6 | Annexure- E.2 | Legal Compliance | YES | YES | YES | YES |
| 7 | Annexure- E.3 | Managing commercial and (where appropriate) transport records | YES | YES | YES | YES |
| 8 | Annexure- E.4 | Financial Solvency | YES | YES | YES | YES |
| 9 | Annexure- E.5 | Safety and Security | NO | YES | YES | YES |
| 10 | Annexure-F | Business Partner Details | NO | NO | YES | NO |
Application Form : (applicable for grant of AEO-T1, AEO-T2, AEO-T3 and AEO-LO)
2. Name/Designation/Email/Mobile/Fax/Phone of central point of contact person.
3. PAN of the applicant.
4. Major items /Country of Import/Export with Tariff Code.
5. No. of BE/SB field during the Previous FY.
6. Copy of MSME certificate (if any)
2. Document security.
3. Physical security.
4. Access controls.
5. Personnel security.
6. Training and skill up gradation.
2. Copy of all statutory registration(e.g. GST/IEC/Factory License/PAN)
3. Certificate of incorporation (in case of company/LLP)/Partnership agreement
4. Detail of Director/Company Secretory/Partner.(Name/Father/PAN/DIN/Mobile/address)
5. Details of Place/Location where goods are handled (e.g. loading/storage)(address/responsible person/GSTN/Phone).
6. Cross Cheque/Bank statement.
7. Details of minimum 25 Bills of entry or shipping bill for preceding FY.
2. Detail of SCN for removal of Excisable Goods(Fraud/Forgery/Clandestine removal) for 3 FY.
3. Detail of SCN of Service Tax collected from customers but not deposited to the Government
4. Detail of prosecution launched (if any)
5. Disputed duty/Disputed Drawback/Total Duty Paid/Total Drawback claimed for 3 FY.
2. Organizational chart (if any)
2. Compliance certificate for filling of annual account with register of company for 3 FY.
3. Solvency certificate issued by the Statutory Auditor in case of AEO- T3/LO otherwise from Chartered Accountant.
2. Procedures and manual on seals to be controlled and affixed to cargo and transport conveyances.
3. Notes on Documentation on clearing of cargo.
4. Premises Security.
5. Cargo Security:
6. Conveyance Security
7. Personnel security:
8. Business Partner Security
Legal Compliance
♣ There should be:
– No show cause notice issued to applicant during last three financial years involving fraud, forgery, outright smuggling, clandestine removal of excisable goods OR cases where Service Tax has been collected from customers but not deposited to the Government. However if issued detail shall be furnished. Show Cause Notice issued involves only technical issues like classification, valuation etc., they are entitled to get benefit of AEO.
– No case wherein prosecution has been launched/completed against the applicant or its senior management.
– Ratio of disputed duty during the last three financial years to the total duty paid during the said period is not more than ten percent.
– Ratio of disputed drawback during the last three financial years to the total drawback claimed during the said period is not more than ten percent.
Managing commercial and (where appropriate) transport records:
♣ The applicant should have a satisfactory
– System of managing commercial, transport records,
– Procedures for verifying the accuracy of Customs declarations,
– Aware of the need to inform the Customs authorities whenever compliance difficulties are discovered.
– Administrative set up which corresponds to the type and size of business
Financial solvency
The applicants must be financially solvent during the three financial years preceding the date of application and submit an undertaking regarding its solvency and a Solvency Certificate issued by the independent Chartered Accountants or Statutory Auditor of the applicant for AEO-T1 and AEOT-T2, but for AETO-T3 and AEO-LO only certificate from Statutory Auditor of the applicant.
To whom application to be made for certification and renewal
AEO Programme Team (New Customs House, Delhi)
Disclaimer : Effort have been made to make document error free , but it is possible that some error might have crept into this document.
Prepared and Compiled by : CA Rajnish Kumar , (E-24, Basement, Lajpat Nagar-III, New Delhi-110024, Email :[email protected], Phone : 011-29832120, Mobile :+91-8588867453/9811207924/9891512285