Shippers, and their freight forwarding partners in the EU, have been warned that they should conduct an impact self-assessment to ensure procedures and documents are in place before deciding whether to apply to become an ‘Authorized Economic Operator’ (AEO), when this becomes possible from July 1st.
Speaking at the recent Security Without Barriers to Trade conference, Colin Davis, senior policy advisor of the UK’s HM Revenue and Customs, with specific responsibility within HMRC over the introduction of AEO status, said: ‘The non-mandatory AEO system must be up and running by 1st January 2008 and companies can start applying from 1st July.
‘It is not possible at this stage to accurately predict the level of take up by UK import & export traders, freight forwarders, customs brokers etc, but HMRC is unlikely to be ready to start issuing AEO certificates before March 2008 at the earliest.’
Rather than applying on 1st July and risk being under prepared, Mr. Davis suggested that interested parties should study the application form, questionnaire and explanatory notes, which will be available on HMRC’s website later this month and conduct an internal audit of the procedures that will be examined by HMRC during the accreditation process.
Delegates at the conference, which was organized by the British International Freight Association (BIFA) and HM Revenue and Customs (HMRC), were given the opportunity to hear and debate the EU proposals for the implementation of the AEO program, which represents the first of several EC schemes designed primarily to strengthen security in the supply chain. In adopting the AEO regime, the EU is aligning with similar measures introduced by other countries, including the US. Bilateral discussions have also been announced with countries including the US, Japan, China and EFTA countries.
Speakers at the conference examined security in the supply chain, investigated the implications for trade and considered the AEO accreditation process.
Delegates learned that AEO status can be granted to traders by EU Member State Customs authorities from 1st January, with applications, in the UK, possible from July 1st this year.
They also learned that AEO is a non-mandatory EU-level supply chain security standard, for mainly EU-based economic entities, involved in international trade between the EU and other (third) countries, covered by Customs legislation.
The guiding principle that came out of the conference is that by achieving AEO status, traders would be demonstrating to the regulatory authorities their commitment to compliance and could expect to see more security facilitations and Customs simplifications in return.
Warnings were given that the accreditation process could prove to be both resource intensive and burdensome for both regulated and regulator, although some clear long-term benefits were outlined for those operators who seek compliance and accreditation, even though those benefits may not be very apparent at this stage of the process.
Speakers explained how a newly accredited AEO should be able to benefit from: a lower ‘risk score’; priority treatment, should extra controls be deemed necessary regarding the movement of its goods between the EU and other countries; easier access to simplifications EU-wide; commercial advantages from having the AEO ‘quality mark’ recognized EU-wide; a slight reduction in the data reported to Customs; and a more secure and predictable supply chain.
Speaking on behalf of the shipper community and asked to comment on why companies should apply for AEO accreditation, Penny Hooper, global logistics manager of Clarks, the major shoe retailer, responded: ‘We think everyone should still aim for AEO status, just to satisfy themselves that their supply chains meet internationally acceptable security norms. It is not just a question of fast customs clearance. We get that anyway.
‘In a way, the requirement is equivalent to the need for ISO accreditation in its various forms. We will expect our service providers to follow suit, in