Authorised Economic Operator certification - Detailed guidance - GOV.UK
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The benefits of an AEO certificate, the AEOC, AEOS and AEOF types, who can apply, criteria you have to meet to be eligible, and how to apply.
Introduction
The Authorised Economic Operator (AEO) certificate is an internationally recognised quality mark indicating that your role in the international supply chain is secure, and that your customs controls and procedures are efficient and compliant.
AEO status is not mandatory. It is a commercial decision as it gives quicker access to certain simplified customs procedures and in some cases the right to ‘fast-track’ your shipments through certain HM Revenue & Customs (HMRC) safety and security procedures.
AEO status is for businesses that are established in the EU, actively involved in customs operations and international trade and have an
number. In some circumstances, airline or shipping companies established outside the EU may also be eligible for AEO status. The European Commission (EC)’s AEO database allows anyone to check who holds a certificate, which type it is, and the date and country of issue.
This guide explains the benefits that an AEO certificate can bring you, who can apply for one, criteria you have to meet to be eligible, and how to apply.
Under data protection requirements, holders of an AEO authorisation need to give permission for some limited data to be shared with third country customs authorities. This will enable their AEO status in the EU to be recognised and benefits to be applied. The C118 AEO Self-Assessment Questionnaire requires that new applicants give their consent to publication and exchange of AEO data
Financial solvency criteria
Recent experience has shown that some AEO applicants, to enable them to meet the AEO financial solvency criteria, have referred to a ‘letter of comfort’ type document.
Unfortunately, examples seen so far are not acceptable to HMRC. Legal services have drawn up an example of a form of legal ‘guarantee’ which is acceptable for the purpose of a parent company covering certain debts of a UK legal entity. This document would need to be presented during the audit process.
Download an example of a .
Businesses involved in the import or export of fish can apply for APEO status but must hold, or be in the process of obtaining, AEO status and should use application form C115 for Approved Economic Operator (APEO). Download application form for an .
Aside from the business benefits of APEO status, it is an important element in the fisheries control system. For more information, see the guide on illegal, unreported and unregulated fishing.
You can also request AEO draft Guidance v6 via email from the AEO Team by emailing them at .
HMRC have 120 calendar days from receipt of a full and complete application to issue a decision. There are options to extend this deadline by either the applicant or HMRC.
AEO applications
AEO application packs consistof forms , ,
and . You can either email your application or download the forms and send them to HMRC.
Postal applications can be sent to the following address:
HMRC AEO Central Site
Fitz Roy House
Castle Meadow Road
Nottingham
Email applications can be sent to: .
HMRC strongly suggest that applicants sending documents by post use a recorded/registered service for data security purposes.
For more information, you should contact the AEO Central Site Enquiry Line on Telephone: 6, or email them at .
Find out who has a certificate
The EC AEO database allows anyone to check who holds a certificate, which type, date of issue and country. .
Conditions and criteria for granting a certificate
The criteria for granting a certificate include an appropriate record of customs compliance, satisfactory management systems that allow appropriate customs controls and proven solvency. Additionally, for security and safety, it includes details of the security and safety standards to be met. The applicant will need to hold an EORI number to apply for AEO.
For more information, see the guide on the .
Who can apply for an AEO certificate?
Anyone involved in the international supply chain that carries out customs related activities in the EU can apply for AEO status irrespective of the size of the business. This includes:
manufacturers
freight forwarders
warehouse keepers
customs agents
other (eg port, secure freight parking, airline loaders)
For more detail on where the international supply chain is deemed to start and end from an AEO point of view, read
Your application must be submitted by a responsible person of the business, eg a partner or director, or the proprietor in the case of a sole trader. If the application is made by someone else, their actions must be sanctioned by a responsible person of the business.
Types of AEO certificate
There are three types of AEO certificate.
Depending on the authorisation criteria of your AEO certificate, the benefits can include easier access to certain customs simplifications, some easing in customs security and safety controls, or both.
A Customs Simplifications AEO certificate (AEOC), which is issued to any business that fulfils the specified criteria in the areas of:
customs compliance
record-keeping standards
financial solvency
If you hold AEOC status it will speed up the process of authorisation if you apply for any of the following customs procedures:
the Local Clearance Procedure under HMRC Freight Simplified Procedures (CFSP) and the National Export System (NES)
simplified declaration procedure under CFSP and NES
simplifications for regular shipping services
A Security and Safety AEO certificate (AEOS) is issued to any business that fulfils all of the above criteria and also maintains appropriate security and safety standards. You’ll benefit from:
a lower risk score used to determine the frequency of customs physical and documentary checks
consignments may be fast-tracked through customs control
reduced requirements for the mandatory pre-arrival/pre-departure Entry Summary Declarations (ENS) or Exit Summary Declarations (EXS)
which carriers must make
potential for future reciprocal arrangements and mutual recognition with countries outside the European Community, for example, USA or trading partners that adopt the World Customs Organisation (WCO) Safe framework
For more information on ENS, see the guide on the . For the detail on EXS, see the guide on .
A Combined Customs Simplifications/Security and Safety AEO certificate (AEOF) is available to any business which meets all the relevant criteria for both types of certificate and which wants to receive the benefits of both types of AEO.
Whichever certificate you hold, you’ll benefit from:
recognised status across the EU
an industry ‘kite mark’, which is a useful marketing tool
AEOs and the security amendments to the Customs Code
The security amendment to the Customs Code aims to ensure an equal level of protection in terms of risk analysis and customs controls for all goods brought into or out of the EU. For practical examples on the documentation required and the reduced requirements for an AEOS or AEOF, .
Airlines and shipping companies
If you’re an airline or shipping company established outside the EU and already benefit from the simplifications in drawing up manifests then you’re deemed to have met the criteria for:
record of compliance
customs brokers and agents
management and record-keeping systems
In addition, however, you must also be one of the following:
a holder of an appropriate internationally recognised security and/or safety certificate
a regulated agent
a holder of a certificate issued in a non-EU country if it’s accepted in the EU
If you hold an internationally recognised security and/or safety certificate, then any criteria you had to meet for that certificate also count as meeting the corresponding criteria necessary for an AEO security and safety certificate.
Find out about the granting of AEO certificates to airlines and shipping companies in .
Criteria for granting Authorised Economic Operator status
For a Customs Simplification AEO certificate (AEOC), you must fulfil the criteria listed below for compliance, record keeping and solvency. For a security and safety (AEOS) or combined certificate (AEOF), you must also fulfil the security criteria. Applicants for all three types of AEO certificate must first be enrolled with the EORI Scheme.
Compliance
HMRC will examine your record of compliance with customs and tax requirements over the last three years, or whatever’s available if you have been established for less than three years. HMRC will look at whether serious or repeated infringements of customs rules have been committed by:
your business
the people managing your business
the people in your business responsible for customs matters
your legal representative for customs matters
You’ll also need to demonstrate that:
you have procedures in place to identify and disclose any irregularities or errors to HMRC
you have taken appropriate remedial action when they are identified
you have satisfactory procedures for handling controlled goods such as military goods or technology, dual-use goods, excise or Common Agricultural Policy goods, dangerous goods or hazardous materials
Find out about the necessary standards of compliance by AEOs in .
Record keeping
HMRC will want to be satisfied that you have a satisfactory system of managing commercial and, where appropriate, transport records. You’ll need to have:
methods to allow HMRC access to your customs records
an appropriate logistical system
an appropriate level of administrative organisation
documented procedures to control and manage the flow of goods
internal controls in place to detect illegal or irregular transactions
procedures in place to handle certain licences and authorisations
archival and retrieval procedures in place
trained staff to inform HMRC if systems errors are discovered
procedures for verifying the accuracy of customs declarations submitted on your behalf by third parties, if appropriate
information technology security measures in place
a maintained accounting system with a full audit trail
Find out about the necessary standards for record keeping by AEOs in .
You have to prove you have been financially solvent for three years preceding your application and that you have the ability to meet your financial commitments. HMRC will check your record for paying and filing your accounts on time.
HMRC will expect your net current assets to be positive, but will take into account any special circumstances that might mean it is normal for a company to have negative net assets.
Find out about the necessary standards for solvency of AEOs in .
HMRC will look at what you have put in place to protect your business and its supply chain against potential risks, whether human, physical, economic or other. You’ll need to:
comply with legal health and safety requirements
have had a safety and security assessment
have appropriately secured external boundaries with documented procedures to control access to your premises
have measures in place to protect your cargo units and measures to prevent unauthorised access to shipping areas, loading docks and cargo areas
use procedures to secure the safety of your goods during storage, manufacture and transport
agree appropriate safety and security measures with your suppliers
carry out security screening and procedures for prospective employees and contracted parties
train your staff in security and safety requirements
Find out about the necessary security standards for AEOs in .
You can find out how to register for EORI in the guide on the .
How to apply for an Authorised Economic Operator certificate
To obtain an AEO certificate, you must have an EORI number and complete an application pack which contains:
- requiring basic information about the business
-a detailed questionnaire about your business activities and
for the AEO application
Both forms must be sent together to HMRC to enable the application to be accepted and processed.
Submit the AEO application and questionnaire
You can either email or post the AEO application and questionnaire. HMRC advise that email is not a secure method of transmission. If you choose to post your application, it is suggested that a tracked delivery service is used.
You will need to have in place evidence of your processes and procedures to support your application and meet the AEO ctriteria. These should be retained and produced at the audit stage of the process.
You should send your application and questionnaire to:
HMRC AEO Central Site
Fitz Roy House
Castle Meadow Road
Nottingham
You can email HMRC at .
Multiple entities or locations
If you’re a group of companies, you have to submit separate applications for each legal entity. However, if you have common corporate standards and customs procedures, you only need send in one questionnaire C118 together with an application form for each legal entity. Each legal entity will receive a separate certificate and authorisation number.
If you operate in other EU member states as well as the UK, your application must cover all your business activities in every country. If that operation is a separate legal entity, however, you need to apply for AEO status in that member state using their forms.
If your activities cover more than one member state, you may have to follow different procedures. Read more about applying for AEO status in .
You can also .
Security requirements
If you’re applying for a Safety and Security certificate, you should prepare for your HMRC visit by conducting a self-assessment to analyse whether you’re able to meet the AEO security requirements. This assessment should be made available during the HMRC visit. You should also make available:
contracts for temporary personnel
details of owners of cargo units
all outsourcing contracts (including cleaning, security, and maintenance or anything else)
Agents and representatives
An AEO certificate can only be issued to a business for its specific role in the international supply chain. So an agent or customs representative can apply for an AEO certificate, but it’ll only relate to its business as an agent. If its clients want AEO status, they must apply for their own certificates.
Find out about AEO applications for Agents and Representative in .
Economic Operator Registration and Identification Scheme
AEO operators and prospective AEO operators are required to register with the EORI Scheme.
AEOs must provide their unique EORI number to a customs authority when they import, export and move goods under a transit procedure. The number is used for the:
analysis and electronic exchange of risk information between customs authorities and the EC under a common risk management framework
provision to the customs authorities of pre-arrival and pre-departure information on all goods entering or leaving the customs territory of the EU
granting of the status of AEO to reliable traders
For more information, see the guide on the .
AEO approval process
Once HMRC has received your application, you’ll receive an acknowledgment. If your application is complete and satisfactory, HMRC will visit you to verify your supplementary documentation. All the documentation referred to throughout the questionnaire and the explanatory notes must be made available for this visit, along with the necessary documented procedures.
If you meet the relevant criteria, your certificate will be issued within 120 calendar days. Your certificate will take effect on the tenth working day after the date of issue.
The timescales may be extended by either the business or HMRC to allow time to address any areas where the criteria fail to be met.
You should be aware that the customs authorities in other EU member states have up to 60 calendar days to comment on your application.
Non-acceptance, rejection and withdrawal of your application
If you or your legal representative for customs purposes has been convicted of certain serious criminal offences or you’re subject to bankruptcy proceedings, then your application will be automatically rejected.
If your application is incomplete it will be returned to you for completion.
If you cannot satisfy all the criteria for AEO you won’t be granted AEO status, but you will be given time to get things up to standard. If you can’t do this within the time allowed, your application will be refused.
You may withdraw your application at any time if you need more time to meet criteria for gaining AEO status.
If your application is refused, or you withdraw it yourself, you can reapply when you have satisfied the criteria.
You can also request a review and/or appeal if your application is turned down.
Information on how to request or lodge an .
Maintaining and revoking your status
To keep your certificate, you have to maintain the standards granted in your authorisation, and notify HMRC of certain specified material changes to your organisation, or to its personnel, systems and procedures.
If you don’t do this, then your authorisation will be reviewed and can be suspended or revoked. If it’s suspended, you’ll be given a chance to put things right. If it’s revoked, you will have to wait three years before reapplying.
Find out about maintaining your AEO status in .
AEOs application questionnaire
The purpose of the AEO self-assessment questionnaire is to provide HMRC with additional information about you and your business. You must answer fully and accurately all questions relevant to the type of AEO authorisation you require.
To apply for AEO status you need to complete and send the AEO application pack to HMRC along with any appropriate supporting documentation. After receiving your application, HMRC will visit you to verify all other supplementary information, in particular the documented procedures referred to regularly throughout the questionnaire.
You should wait until all the necessary procedures are in place and you can answer ‘yes’ where appropriate to the relevant questions in the questionnaire before submitting your application.
Supplementary documentation
The supplementary documentation checked by HMRC during the verification visit includes:
full details of all your sites involved in international trade and their activities
details of your products and their relevant commodity codes and duty rates
the technical information you usually use to classify your goods
evidence that you regularly and fully review your procedures, document any changes and notify affected staff of the changes
your last three full (not abbreviated) sets of annual accounts or statements, or where appropriate latest management accounts
If you use a computer to control your accounting and logistical systems, you’ll need to demonstrate:
the extent of the computerisation
the segregation of functions between development, testing and operations
the segregation of functions among users
access control
any customisations of the standard package you use
the list of ledger accounts
whether the system makes use of verification interim accounts
how liabilities to customs/excise duty/VAT are recorded
whether you operate in batches
whether your stock and financial records are linked
Documented procedures for accounting and logistical systems
The documented procedures that HMRC will check include:
how you set up, maintain, change and archive standing data which are relevant to customs
who is responsible for these within your business
if you use a third party, the functions they perform
how changes to standing data are authorised
how access to standing data is controlled within your business
Documented procedures for safety and security
You will be expected to have in place a security plan and a threat assessment which need to be made available for the audit visit.
You should have documented procedures in place to enable and encourage staff and visitors to report any security incidents, such as unauthorised access, theft, or the use of unvetted personnel.
Procedures should also be in place to control such areas as access, recruitment, business partners etc and need to be made available for the audit visit.
In sections 1 and 2 of the AEOs questionnaire, you have to provide basic details about your organisation and its official representatives, your business activities and your locations. You’ll also have to state whether any of your businesses or sites act on behalf of, and/or in the name of, someone else and whether you buy or sell to an associated business, such as a parent company.
Internal organisation
You should document your organisational structure, which would typically be done with an organisation chart. You’ll need to specify which senior personnel are involved in the international supply chain and the procedures you have in place to cope with the absence of key staff. Section 1 of the explanatory notes for the AEO questionnaire provides further information regarding the internal organisation.
Volume of business
You’ll need to provide turnover and profit figures from the last three years’ accounts. You’ll also need to provide information about your dealings with HMRC over the last three years, and estimates for the next two. If you have storage facilities, or use facilities belonging to a third party, you must state the size and the normal utilisation percentage. Sections 1.2.3 to 1.2.4 of the explanatory notes for the AEO questionnaire provide further information regarding the volume of business.
HMRC will want to see detailed documented procedures for the classification of your goods, including who does it, how they do it, how they review and maintain your classifications, together with lists of all your products and their commodity codes. Section 1.3.2 of the explanatory notes for the AEO questionnaire provides further information regarding classification of goods.
You will need to have documented procedures for determining the correct value of duty and VAT for your goods. Section 1.3.3 of the explanatory notes for the AEO questionnaire provides further information regarding valuation. See the guide on .
You must state whether you deal in any goods which are subject to tariff preferences, which allow you to claim a reduced or nil rate of duty on your imports from preference-giving countries. You’ll need documented procedures for claiming these preferential rates, and for issuing certificates and invoice declarations at export. Section 1.04.3 of the explanatory notes for the AEO questionnaire provides further information regarding preferences.
If you deal in goods subject to anti-dumping or countervailing duties, you’ll need to specify this and provide details of the suppliers, or non-EU member states, whose goods are subject to these duties. Section 1.3.5 of the explanatory notes for the AEO questionnaire provides further information on anti-dumping and countervailing duties. See the guide on .
If you import or export any goods subject to licences, permits, certificates or restrictions, you’ll need to have documented procedures for administering these licences. Section 3.5.1 of the explanatory notes for the AEO questionnaire provides information regarding licences, permits and certificates. For further information see the guide:
You can also .
Compliance record
If any customs authorisations that you have held or sought have been refused, suspended or withdrawn, you’ll have to provide details. You’ll also need to give details of documented procedures for identifying and disclosing irregularities and errors to HMRC and other regulatory authorities.
You must also provide details of any irregularities and errors you have spotted over the last three years and the remedial action you took. Section 2.2 of the explanatory notes for the AEO questionnaire provides further information on compliance records.
You must provide details of any irregularities or errors which have been identified by HMRC or other regulatory authorities over the last three years, together with details of any remedial action. You must also provide details of any high-risk or controlled goods you handle. Sections 2.1 to 2.2 of the explanatory notes for the AEO questionnaire will provide you with further information regarding controlled goods.
You can also see the guide on .
AEOs questionnaire: Sections 3 and 4 - accounting, logistics and financial solvency of your business
To satisfy the requirements of section 3 of the AEO questionnaire, you must have an accounting system that will allow HMRC to apply audit-based controls, which will mean granting either physical or electronic access to the system. You’ll need a logistical system that can distinguish between EU and non-EU goods, unless you’re only applying for the Security and Safety certificate.
Explanatory notes for the AEO questionnaire
For each point raised on this page, you can refer to the HMRC explanatory notes for the AEO questionnaire. Follow the section number for a detailed explanation. Find out about processes in the explanatory notes for the .
Accounting and logistical system
You must maintain a full audit trail of all your customs activities. Section 3 of the explanatory notes for the AEO questionnaire provides further information on audit processes. If you operate a computer system to control your accounting and logistical system, you’ll need to provide and demonstrate details of what the system is, which functions it controls, and details of any standards you comply with in respect of securing your system. Section 3.2 of the explanatory notes for the AEO questionnaire provides further information on accounting and logistical systems.
Internal control system
You’ll need documented procedures that staff working in purchase, storage, production and sales processes follow. Your system should be suitable for your type and size of company and should, in particular, have internal controls capable of detecting illegal or irregular transactions. Section 3.3 of the explanatory notes for the AEO questionnaire provides further information on internal control systems.
Flow of goods
You’ll need documented procedures for the purchase and receipt of non-community goods, the movement of stock, any manufacturing processes, and delivery to non-EU customers. Section 3.4 of the explanatory notes for the AEO questionnaire provides further information on the flow of goods.
Making customs declarations and the use of customs agents
If you use a third party to make customs declarations, you’ll need procedures to verify the accuracy of those declarations. Section 3.5 of the explanatory notes for the AEO questionnaire provides further information on the flow of goods.
For further information see the guide to using brokers and forwarders.
Procedures regarding back-up, recovery, fallback and archiving
You must have documented procedures for the back-up, recovery and fallback and archiving of your business records. Section 3.6 of the explanatory notes for the AEO questionnaire provides further information on the back-up, recovery, fallback and archiving.
You must have documented procedures to protect your computer systems against unauthorised access. Section 3.7 of the explanatory notes for the AEO questionnaire provides further information on unauthorised access. You must have documented procedures for the security of physical documents. Section 3.8 of the explanatory notes for the AEO questionnaire provides further information on unauthorised access.
Financial solvency
HMRC will carry out a number of checks to ensure that you’re solvent, and will check that you have been filing your accounts on time, as required by law. HMRC will also look at your net current asset position and at your accounts for the last three years, or since you set up if it was less than three years ago. In particular, HMRC will check to see if you have been late with any tax or duty payments in the last three years. Sections 4.01.1 to 4.01.2 of the explanatory notes for the AEO questionnaire provide further information on financial solvency.
AEOs questionnaire: Section 5 - safety and security requirements
Only complete this section if you intend to apply for the security and safety (AEOS) or combined (AEOF) certificate.
Explanatory notes for the AEO questionnaire
For each point raised on this page, you can refer to HMRC’s explanatory notes for the AEO questionnaire. Follow the section number for a detailed explanation. Find out about processes in the
for the AEO questionnaire.
Security self-assessment
You’ll need to undertake a security self-assessment and to carry out a threat assessment. You will need documented procedures for recording and reporting security incidents. Sections 5.1.1 to 5.1.6 of the explanatory notes for the AEO questionnaire provide further information.
Physical security
Your premises and external boundaries must be secure. You’ll need secure premises with secure external boundaries. Access control measures should be in place, as well as physical security and monitoring of any possible means of entry. In addition, you’ll need documented procedures for keys - for access to internal parts of the premises, for checking and maintaining security and for protection against unauthorised vehicle access. Sections 5.2 to 5.3 of the explanatory notes for the AEO questionnaire provide further information regarding physical security of premises.
Cargo units
You must have protection against the introduction, exchange or loss of any material and against any tampering with cargo units such as containers, tankers, vans, lorries, vehicles or pipelines in which your goods are transported. If you don’t own the cargo units, you should have procedures to examine their integrity before loading. Documented inspection procedures must be in place. Section 5.4 of the explanatory notes for the AEO questionnaire provides further information on cargo units.
Logistical processes
You must provide details of how you move imported and exported goods between your premises and the frontier, across the EU and within the UK between different sets of premises. Section 5.5 of the explanatory notes for the AEO questionnaire provides further information on logistical processes.
Incoming goods
You’ll need documented procedures to handle incoming goods, including regular inspections in transit and on arrival. Section 5.7 of the explanatory notes for the AEO questionnaire provides further information on incoming goods.
Storage of goods
There must be documented procedures in place to ensure the safety and security of stored goods, and in particular a dedicated, controlled, safe and secure storage area. Section 5.06.1 of the explanatory notes for the AEO questionnaire provides further information on storage of goods.
Manufacture of goods
You should have a specific area dedicated to production, with controlled access, and appropriate supervision and monitoring of the process, and inspection and control of the goods. Section 5.9 of the explanatory notes for the AEO questionnaire provides further information on manufacture of goods.
Loading of goods
You must have documented control procedures in place for the loading of goods and the handling of relevant documentation. Section 5.10 of the explanatory notes for the AEO questionnaire provides further information on the loading of goods.
Security requirements on business partners
If you have any suppliers (of goods or services) that impact on the international supply chain and have agreed specific security measures with them with regard to their dealings with you, you should state what these are and have arrangements in place to check them. Section 5.09.1 of the explanatory notes for the AEO questionnaire provides further information on security requirements with business partners.
Personnel security
Personnel security measures you need to have in place include appropriate recruitment and exit procedures, background checks, references, police checks if necessary, and training of permanent and temporary staff in safety and security. Section 5.12 of the explanatory notes for the AEO questionnaire provides further information on personnel security.
External services
If you outsource any services at all, security requirements must be built into the contractual arrangements you have with the external contractors. Section 5.13 of the explanatory notes for the AEO questionnaire provides further information on external services.
Safety and security developments
The security amendment to the Customs Code aims to ensure an equal level of protection in terms of risk analysis and customs controls for all goods brought into or out of the EU.
For practical examples on the mandatory timing and advance notification procedures, .
Support and advice for businesses applying for AEO certificates
As a business interested in applying for AEO status, you can turn to the HMRC AEO team for help and information. The AEO team can be contacted by email at . Applications for AEO certificates can be emailed to .
The government organisation with primary responsibility for providing trade support is HMRC. You can call the HMRC .
You can obtain more detailed information on .
HMRC AEO Central Site Enquiry Line
Telephone: 6
HMRC Excise & Customs Helpline
Telephone: 0
HMRC VAT Helpline
Telephone: 0
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