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About Authorised Economic Operator (AEO) Programme

Context:

Recently, the gem and jewellery sector has been granted Authorised Economic Operator (AEO) status by the Ministry of Finance, easing export-import processes with shorter cargo release times and reduced bank guarantees.

Relevance:

GS III: Indian Economy

Dimensions of the Article:

  1. About Authorised Economic Operator (AEO) Programme
  2. About World Customs Organization

About Authorised Economic Operator (AEO) Programme

  • An AEO is a business entity engaged in international goods movement, requiring compliance with national customs law standards.
  • Approval is granted by or on behalf of the national administration, adhering to the World Customs Organization (WCO) guidelines.
  • The WCO adopted the SAFE Framework of Standards (WCO SAFE FoS) in June 2005 to enhance international supply chain security, with AEO being one of its foundational pillars.
  • AEO fosters closer collaboration between customs departments and the trade industry.
  • The Indian AEO programme is based on the WCO SAFE FoS.
Overview of the AEO Programme
  • Introduced in India by the Central Board of Indirect Taxes and Customs (CBIC) in 2011, the AEO programme is voluntary and administered by CBIC.
  • Aims to provide benefits such as simplified customs procedures and expedited customs clearances to business entities offering high security guarantees in the supply chain.
  • Entities with AEO status are considered reliable and secure trading partners, allowing customs resources to focus on higher-risk businesses.
Benefits of AEO Status
  • Direct port delivery and port entry for imports and exports respectively.
  • Special focus on small and medium-scale entities; entities handling up to 25 import and export documents annually are eligible.
  • Expedited drawback amount disbursal, refunds, and adjudications.
  • Paperless declaration without supporting documents.
  • Site inspection or examination upon request.
  • Recognition by partner government agencies and stakeholders.
Eligibility for AEO Status
  • Business entities engaged in customs-related activities in India can apply for AEO status regardless of size.
  • Eligible entities include importers, exporters, Custom House Agents (CHA), Custodians or Terminal Operators, among others.

About World Customs Organization

  • The World Customs Organization is an inter-governmental organization headquartered in Brussels, Belgium.
  • WPO is noted for its work in areas covering international conferences, equipment, and equipment development, commodity classification, evaluation, collection of rules of origin, customs revenue, and other topics.
  • The WTO takes account of the naming of International Relevant System (HS) goods, the technical aspects of the Trade Organisation (WTO), customs assessment, and rules of origin.
  • The WCO’s primary objective is to enhance the efficiency and effectiveness of member customs administrations, thereby assisting them to contribute successfully to national development goals, particularly revenue collection, national security, trade facilitation, community protection, and collection of trade statistics.

-Source: The Hindu


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