Why in the News?
India’s Authorised Economic Operator (AEO) programme was commended by the World Trade Organization (WTO) for significantly enhancing MSME participation in global trade.
What is AEO India Scheme?
- Overview: It is a voluntary certification programme launched by the Central Board of Indirect Taxes and Customs (CBIC) in 2011 to promote secure and efficient cross-border trade.
- Objective: Identifies and accredits trusted traders demonstrating high customs compliance and supply chain security, offering trade facilitation benefits.
- Evolution: Began as a pilot in 2011, revised in 2016 to merge with the Accredited Client Programme (ACP), aligning with the World Customs Organization (WCO) SAFE Framework of Standards.
- Certification Tiers: Consists of AEO-T1, AEO-T2, AEO-T3, and AEO-LO (Logistics Operator) each offering progressively higher benefits based on compliance, solvency, and security.
- Key Benefits: Provides faster customs clearances, deferred duty payments, direct port delivery, reduced inspections, priority adjudication, and dedicated client managers.
About WCO AEO Framework:
- Origin: Established by the World Customs Organization (WCO) under the SAFE Framework of Standards (2005) to enhance trade security and customs modernisation.
- Core Aim: Ensures secure, legitimate trade through collaboration between Customs authorities and private traders.
- Three Pillars:
- Customs-to-Customs cooperation for border coordination.
- Customs-to-Business partnership via AEO certification.
- Customs-to-Other Agencies collaboration for integrated control.
- AEO Concept: Certifies compliant entities as trusted operators, granting simplified and expedited procedures.
- Benefits: Enables faster clearances, mutual recognition between countries, enhanced risk management, and lower transaction costs.
- Global Adoption: Over 90 countries have operational AEO programmes with Mutual Recognition Arrangements (MRAs) ensuring standardisation.
- India’s Alignment: India’s AEO model is fully harmonised with the WCO SAFE Framework, ranking among the most comprehensive customs–business partnership systems in the developing world.
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