The benefits and advantages related to the AEO status of economic operators have been widely spread. The most important being the reduced guarantee, quick change to emergency procedures and the good reputation of the AEO company with respect to security in their supply chain. But do you know that the status can be withdrawn, revoked or suspended?

In principle the AEO certificate is not time-limited. However, situations may arise which require the certificate to be reviewed. Customs administrations have two working methods to verify whether the conditions for AEO status are satisfactory, i.e. reassessment and monitoring.

Reassessment has been regulated by the CCIP and serves to verify that the AEO still meets the conditions at a certain point of time. It will usually be carried out if the legal situation changes or if there is evidence that the holder of the certificate does not meet or no longer meets the AEO criteria. In addition, the customs administration can perform monitoring. This possibility is also provided by the CCIP which permits checks to be carried out on an on-going basis and in the absence of a special event.

Withdrawal: It is possible to cancel or withdraw an AEO certificate when:
1/ it has been issued by an authority without requisite jurisdiction over the subject-matter; 2/ it has been obtained by unfair means such as deceit, threats or bribery; 3/ the beneficiary has obtained the status by providing information which was essentially incorrect or incomplete; 4/ the beneficiary was aware of its illegality, or was unaware thereof due to gross negligence.

Revocation: An AEO status may be revoked in whole or in part:
1/ if the economic operator has failed to take the necessary remedial measures to comply with the requirements of the relevant AEO certificate and therefore does not meet the certification requirements; 2/ when serious infringements related to customs rules have been committed by the AEO and there is no further right of appeal 3/ upon request of the AEO.

Suspension: The AEO status can be suspended for three different reasons:
1/ non-compliance with the conditions or criteria for AEO certification, where the customs authority established that the operator does not comply with the conditions or criteria for the AEO certificate. This covers cases where the conditions did not exist at the time of the certification. 2/ Sufficient reasons to believe that a criminal act took place such as fraud, money laundry or the forgery of documents. 3/ upon request of the AEO.

Customs authorities are to communicate their findings to the concerned economic operator before taking a decision. The economic operator is entitled to correct the situation and/or express his point of view within 30 calendar days, starting from the date of communication. In the event of non-compliance with the conditions for an AEO certificate, the operator may take measures such as remedying safety deficiencies, improving customs processes, reorganising his accounts or restoring solvency. However, such measures are not possible in the event of the second reason for suspension, that is, where the customs authorities have sufficient reason to believe that an AEO has committed an offence.

A field research on this topic on the Belgian territory learns that 19 companies have revoked their application and 8 applications have been refused so far. Reasons for revocation or refusal of application are often solvency or safety deficiencies.

The EU Commission recently published specific guidelines on Authorised Economic Operator status (AEO) for multinational or large businesses (EU established or not). Most of the time they consist of a parent company and subsidiary companies and/or Permanent Business Establishments/branches. In these guidelines the Commission clearly defines:

• Subsidiary = an incorporated entity created in the host EU country (national business legal forms! ), its capital is fully owned by the parent company or it is controlled by a company in collaboration with minority local partners (a joint subsidiary). Subsidiairies are legally independent from their mother company.
• Branch = is not an individual legal entity and has no legal personality. A branch is an office/premise/another location of the company itself. A branch forms part of the company’s total assets.
• Permanent Business Establishment  = is a fixed place of business through which the business of an enterprise is wholly/partly carried out.

Regarding AEO application for the multinational or large business of an enterprise, the following scenarios are now foreseen:

• all subsidiairies/PBEs being separate legal entities shall apply separately for an AEO status.
• all branches/PBEs which are not individual legal entities cannot apply separately for an AEO status and one single application covering all of them shall be submitted by the parent company considered as a person according to the EU legislation.

Customs4trade assisted and assists several large and multinational companies with their AEO certification process in different Member States. Our own developped C4T AEO tool makes complex situations manageable:

• many different stakeholders
• stakeholders in different locations
• different legal entities
• different sites or business units
• different member states
• different languages

The C4T AEO tool is designed to reduce your project time for getting the AEO status and reduces efforts for your internal and external ressources. With the easy status reporting, you are in control of the process.

Click here to read more on these specific guidelines !

The introduction of AEO in Switzerland grants certified entities customs privileges with companies located in EU-member states as well as in relation to non EU-countries, such as preferential treatment of cross-border shipments, reduced waiting time for customs clearance and less physical and documentary controls at customs borders. AEO is not obligatory, but offers many benefits for parties involved in the international supply chain.

 Switzerland decided first to test the AEO certification process with four selected pilot companies. The audit results and information from the four pilot companies are still being examined. The full launch of the AEO certification in Switzerland is expected in January 2011.

One of the results from the test phase is that companies that hire business locations/facilities from Logistics Service Providers, that are not interested in applying for the AEO status require special attention. In this case, well defined contracts, procedures, tasks, competences and responsilities need to be provided to customs.

The structure of the self-assessment questionnaire has been revised. After the completion of the pilot phase, which took  longer than expected, the self assessment questionnaire will be finalized. The Swiss questionnaire has been compared with the new updated uniform version of the self assessment agreed between the EU Member States and the European Commission, and completed accordingly. The Swiss questionnaire -and guidelines which are still under review- are available on the internet site in the three official languages. In order to have an efficient assessment and evaluation, the questionnaire needs to be sent electronically and on paper with the requested accompanying documents to the Swiss Federal Customs Administration. Further instructions on how to proceed will be provided by the SFCA in the near future.

Furthermore, a list of Frequently Asked Questions has been restructured in September and has been completed, in co-operation with the AEO contact partners in the Swiss customs districts. The FAQ’s can be consulted on the website of the Swiss customs: www.ezv.admin.ch

For more information, contact info@customs4trade.com

Source: website Swiss Federal Customs Administration

Between the EU Member States and the European Commission, a new AEO Self-Assessment Questionnaire was agreed in order to guarantee a uniform approach throughout the Member States. It aims to simplify and to speed up the AEO application.

The new Self-Assessment Questionnaire is harmonized at European level. However, depending on whether the Customs Administration of a Member State already disposes of access to information (e.g. sections 2 and 4), not all questions have to be answered in every Member State.

The Member States dispose of a transitional period till 31 December 2010 to adapt their internal procedures and language versions. They can start to use the new Self-Assessment Questionnaire before the end of this transitional period, but they have to keep in mind the needs of the economic operators.

Customs Authorities of the Member States will ensure smooth processing of the applications already submitted with the old version of the self-assessment questionnaire.  Of course our C4T AEO tool will keep up with the most updated information.

As soon as a Member State starts using the new Self-Assessment Questionnaire, this will be published here.

Good Manufacturing Practices (or GMP) is a quality system used by the pharmaceutical, cosmetic and food industry, including also GMP Animal Feed. GMP’s are guidelines that outline the aspects of production and testing. Records of manufacture (including distribution) that enable the complete history of a batch to be traced are retained in a comprehensible and accessible form.

The basic GMP rules:

1. GMP certified companies need to dispose of written work methods:  Procedures, instruction sheets, forms, … This set of documents is the “quality manual” and describes e.g. how to purchase, transport, store, produce and a series of other activities take place;
2. GMP certified companies have to follow the work methods: The written procedures have to be applied. This means that the reality has to correspond with the written work methods;
3. GMP certified companies have to provide evidence: GMP companies have to prove to the internal and external auditor that they apply to the identified rules in the written procedures. Documents to guarantee any kind of control have to be created.

These 3 basic rules are very useful for the AEO certification process, but the overlap goes even further: Setting up a GMP system cannot be done without the support of the executive board. This support is also crucial for the AEO certification process.

For the GMP certification inventories of e.g. vehicles, equipment, inbound and outbound flows, staff … are needed. These inventories, as well as the schematic overview of the activities, are useful for the AEO certification. Very interesting is the risk analysis. This GMP risk analysis is concentrated on the potential risks regarding food and feed safety. The extension to safety and security in AEO isn’t far away.

AEO certification needs ?

C4T has developed the AEO tool to support your AEO certification process. This webbased tool decreases the efforts of internal/external ressources and reduces the project time. Our AEO tool is an interactive platform assuring a user-friendly and flexible way of working and can be used for your AEO certification needs in 27 EU Member States.

The C4T AEO-tool can be ordered with or without C4T AEO assistance. Upon your request, our competent AEO team guids you through the AEO certification process:

• Self-assessment: guidance, co-ordination, review or validation procedures;
• Identify remediation measures;
• Develop and implement an internal control plan;
• Draft and submit your application;
• Assistance with the audit by the customs authorities.

If you want more information, contact us  info@customs4trade.com