Sarat Chandra IAS Academy

Authorised Economic Operators

Authorised Economic Operators

Authorised Economic Operators

#GS3 #Taxation system #Government Policies 

Context: The Central Board of Indirect Taxes & Customs (CBIC) has inaugurated the online filing of Authorised Economic Operators (AEO) applications.

  • The new version (V 2.0) of the web application is designed to ensure continuous real-time and digital monitoring of physically filed AEO T2 and AEO T3 applications for timely intervention and expedience.

Who are Authorised Economic Operators?

  • The AEO concept is one of the main building blocks within the WCO SAFE Framework of Standards (SAFE).
  • It aims to enhance international supply chain security and facilitate the movement of goods.
    • SAFE sets out a range of standards to guide international Customs Administrations towards a harmonized approach based on Customs to Customs cooperation and Customs to Business partnership.
    • Developing an Authorized Economic Operator programme is a core part of SAFE.
  • Under this, an entity engaged in international trade is approved by WCO as compliant with supply chain security standards and granted AEO status.
  • An entity with an AEO status is considered a ‘secure’ trader and a reliable trading partner.
  • Benefits of AEO status include
    • improved security and communication between supply chain partners,
    • Customs will trust the operator and perform less or no inspections on goods imported or exported by or via the AEO.
    • This benefits the mover of the goods as goods are available more quickly, which means lower transport costs.
    • Customs benefits as scarce inspection capacity can be targeted better at cargo of unknown and potentially unsafe operators.

Indian AEO Programme:

  • AEO is a voluntary programme.
  • The AEO Programme was introduced as a pilot project in 2011.
  • The security standards detailed in WCO SAFE Framework are the basis of the Indian AEO programme.
  • There is a three tier AEO Status for Exporters and Importers. The three tiers are AEO T1, AEO T2, AEO T3, where AEO T3 is the highest level of accreditation.
  • It enables Indian Customs to enhance and streamline cargo security through close cooperation with the principal stakeholders of the international supply chain viz. importers, exporters, logistics providers, custodians or terminal operators, customs brokers and warehouse operators.
    • To provide business entities with an internationally recognized certification.
    • To recognize business entities as “secure and reliable” trading partners.
    • Enhanced border clearance.
    • Customs advice/assistance if trade faces unexpected issues with Customs of countries.

Benefits:

  • Harmonization of the advance electronic cargo information
  • Ensure the integrity of the information, i.e. what is said to be in a container, really is in the container and nothing else, more, or less;
  • Ensure the integrity of its employees, that they will not put goods in the container that should not be there; and
  • Secure access to its premises, to prevent unauthorized persons to put goods in the container.
  • Worldwide recognition as safe, secure and compliant business partners in international trade.
  • India gets trade facilitation by a foreign country with whom India enters into a Mutual Recognition Agreement/Arrangement (MRA).
  • It enables Indian Customs to enhance and streamline cargo security through close cooperation with the principal stakeholders of the international supply chain viz. importers, exporters, logistics providers, custodians or terminal operators, custom brokers and warehouse operators.
  • Promote Ease of Doing Business: A liberalized, simplified and rationalized AEO accreditation process has potential to promote Ease of Doing Business and to emulate global best practices.
  • Facility of Direct Port Delivery of import Containers and/or Direct Port Entry of Export Containers.
  • It also fast tracking of refunds and adjudications.
  • The Indian AEO Programme is a game-changer. It will not only achieve ‘Make in India’ but also substantially add to the vision and lead India to become a manufacturing and exporting power-house.

World Customs Organization (WCO)

  • WCO is an intergovernmental organization headquartered in Brussels, Belgium.
  • The role of the World Customs Organisation (WCO) is multifaceted.
    • To improve the effectiveness and efficiency of member customs administration.
    • Help member customs administration in revenue collection, national security, trade facilitation, community protection, collection of trade statistics, combating counterfeiting in support of Intellectual Property Rights (IPR), drugs enforcement, illegal weapons trading and integrity promotion.
  • The WCO represents 179 Customs administrations that collectively process approximately 98% of world trade.
  • India is a member and India was appointed as the Vice-Chair (Regional Head) of the Asia Pacific Region for a period of 2 years from 2018 to 2020.
  • WCO is divided into 6 regions. Each region is represented by an elected Vice-Chairperson to the WCO Council.
  • The WCO maintains the international Harmonized System (HS) goods nomenclature and administers the technical aspects of the World Trade Organization (WTO) Agreements on Customs Valuation and Rules of Origin.

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