Updated on: Oct 19th, 2023
7 min read
The Indian Authorised Economic Operator (‘AEO’) Programme was developed by the World Customs Organisation and later introduced in India by the Central Board of Indirect Taxes & Customs (‘CBIC’) in 2011.
The Indian AEO Programme is a voluntary programme administered by the CBIC. The AEO Programme seeks to provide benefits in the form of simplified customs procedures and faster customs clearances to those business entities that offer a high degree of security guarantees regarding their role in the supply chain.
The CBIC vide ‘Circular No. 33/2016-Customs’ dated 22 July 2016 merged the two facilitation schemes, i.e. ACP (Accredited Client Programme) and AEO, into a combined three-tier AEO Programme. The combined three-tier AEO programme enhanced the scope of these programmes and provided further benefits to the entities.
The objective of the combiner three-tier AEO Programme is to provide business entities with an internationally recognised quality mark that indicates their secure role in the international supply chain and ensure that their customs procedures are compliant and efficient. Thus, an entity with an AEO status can be considered a reliable trading partner and secure trader.
On 15 December 2020, the CBIC vide ‘Circular No. 54/2020-Customs’ introduced and promoted the ‘Liberalised MSME AEO Package’. Through the ‘Liberalised MSME AEO Package’, the CBIC encouraged all eligible MSMEs to obtain advantages of faster custom clearances and the related benefits.
Any business entity involved in the international supply chain carrying out custom related activities can apply for AEO status under the AEO Programme, including:
The businesses not involved in customs-related activities or work are not eligible to apply for AEO status. In general, insurance companies, banks, consultants, etc., are ineligible for AEO status.
Section 3 of the AEO Programme guidelines provided in the CBIC circular dated 22 July 2016 provides the eligibility criteria and conditions for granting an AEO certificate. The eligibility criteria for a business entity for obtaining AEO status are as follows:
Under the circular dated 22 July 2016, the MSMEs could not avail AEO Programme due to various conditions. To support the MSMEs against the challenges of the COVID-19 pandemic, the CBIC introduced the ‘Liberalised MSME AEO Package’ for MSMEs in line with the Prime Minister’s Aatmanirbhar Bharat Abhiyan.
The CBIC examined the difficulties faced by the MSMEs (Micro, Small and Medium Enterprises) while applying for ACO certificate and relaxed various compliances and security requirements for MSMEs under the ‘Liberalised MSME AEO Package’, which are as follows:
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