Thursday, January 30, 2014

Freight Forwarding and Logistics Outfits Should Apply for AEO Status Now!

A Much Misunderstood Scheme can Be Made Simple with a little Advice
Shipping News Feature

UK – EUROPE – Many freight forwarding and other logistics outfits are aware of the necessity and benefits of obtaining Authorised Economic Operator (AEO) status but still haven’t made the effort to fully understand what is required. HMRC has a webpage dedicated to frequently asked questions whilst specialists in VAT and customs processes, the Customs People, here offer advice to companies who are unsure if they should acquire AEO or what it will mean to them and point out key factors relevant to the changes which are due to come into force in June 2016.

Firstly, leaving applications until the last minute may cause problems, June 2016 sounds a distant date, but it will soon come around and it is advised you start your applications early to avoid the panic and rush of the collective ‘last-minute’. It is believed that HMRC is unable to add extra resources to cater for the influx of paperwork and applying will take, on average, six to nine months - yet more reasons why it is essential to start seriously thinking about your application today. If your application is still being processed as the changes come into place, you may face serious disadvantages at borders and customs, possibly leading to a negative effect on productivity and profit.

Secondly, you might be certain you don’t need AEO, or you might already be well on your way with the application, but did you know that there are three statuses you can apply for? It is possible that you are applying for the wrong status, or that you do need one of these accreditations after all. Any business involved in a supply chain can apply for one of the following:

• A Customs Simplifications AEO certificate (AEOC)

• A Security and Safety AEO certificate (AEOS)

• A Combined Customs Simplifications/Security and Safety AEO certificate (AEOF)

Businesses who hold an AEOS/F status will receive export/import benefits at frontiers when trading with Japan and the US with proposals in place to shortly extend the advantages to Switzerland and China and talks under way with Canada, Turkey and Russia.

If making the application alone and unsure of your ground, you might unwittingly be causing more damage than good by applying for the wrong, or an inadequate, status. The good news is that you still have plenty of time to get help and advice on your decision, either from the HMRC advice page or an independent advisor.

AEO will bring international importers and exporters many advantages, particularly in terms of document and security checks, as you will be deemed a much lower risk than those without accreditation. If you don’t apply for AEO, getting through customs, especially after the changes first come into place, may be more difficult, time-consuming and costly.

For those who would prefer to undertake the process on their own the EU have an online course which anyone can undertake and which was developed under the Customs 2013 Programme. The course contains five units which take between 10 minutes and an hour each and fully explains what AEO means and how to apply.

Additionally the World Customs Organization (WCO) is hosting the 2nd Annual AEO Conference in Madrid 28-30 April 2014 at the IFEMA Convention Centre. The UK AEO Team will be hosting a number of workshops at the event, along with colleagues from other countries.