As counter terrorism legislation intensifies within the European Union (EU), importers will have to weigh up the increase in the costs of compliance within a global supply chain against the benefits.
With trained Customs auditors on our team, Vantis Custom House is well placed to assist EU importers and traders who are involved in the international movement of goods to obtain AEO status.
The introduction of AEO status aims at increasing security for shipments entering or leaving the EU as part of an international supply chain. Holders of AEO status will have an internationally recognised quality mark that demonstrates they operate within a secure supply chain and that their customs controls and procedures are efficient and compliant. This status will result in reduced interventions and delay when goods are imported to or exported from the EU; indeed consignments should be fast-tracked through customs controls.
Our strategy has been developed to assist companies during the trial stages, through to implementation and beyond. Since the provision was introduced into the EU legislation on 1 January 2008, this is an area in which we are strongly recommending our clients to take immediate action.
The potential benefits of obtaining AEO certification are many, some of which are detailed below;
- Keeping ahead of your competition,
- Fewer physical and documentary examinations as a result of a lower risk score,
- Consignments may be fast-tracked through customs control,
- If selected for examination, priority will be given over non-AEO’s,
- Reduction in the number of data elements required when making pre-arrival/pre-departure summary declarations from July 2009 onwards,
- Industry recognised “kite-mark”,
- Inclusion in future mutual recognition and reciprocal arrangements with other trading partners that adopt the WCO SAFE Framework.
It is believed that further benefits will be possible when the Modernised Customs Code is implemented. These should include a number of additional benefits, some of which are expected to be guarantee waivers and centralised clearance.
In addition to this, we should also see certain other ‘fringe’ benefits created by the heightened interest that will be needed in the global supply chain, such as;
- Increased security measures could reduce losses (pilferage etc.),
- Greater control throughout the supply chain could result in reduced lead/transit times,
- AEO’s giving preferred status to other AEO’s,
- Mutual recognition between other countries adopting similar SAFE Framework measures, such as USA, China, Australia, South Africa, Norway and Switzerland.
The AEO concept was developed as part of the SAFE Framework. This was adopted by the World Customs Organisation back in 2005 and is designed to provide the overarching principles concerning security and facilitation of the global supply chain. With many of the EU’s trading partners implementing similar supply chain security initiatives, a roadmap towards mutual recognition is being developed.
It is our recommendation that all EU importers and traders start on the road to obtaining AEO certification. The Vantis approach - our suggested project structure is shown below;
If you are interested in learning more about the Vantis approach, please complete and submit your contact details in the boxes provided below (boces marked with an * are required). It would also be helpful if you could provide answers to the three questions listed. In return you will receive two pdf files detailing our proposed flexible project structure and our base audit document, free of charge.
AEO Project Structure
We have developed the attached flexible AEO project structure to provide Vantis clients with an understanding of the steps that we believe traders need to take towards gaining AEO certification. Dependant upon the structure of your organisation, the stages and even steps within the stages are inter-changeable.
AEO Audit Document
It is strongly recommended that this AEO ‘Base’ Audit Document is used to give the trader a better understanding of the first level requirements on the road to obtaining AEO certification. This document should allow the trader to understand which departments and the individuals within their organisation that will need to be included in their AEO project team.
AEO Flowchart
We have developed the AEO Flowchart which should give you a good indication of where your business currently stands with regards to AEO and the steps going forward needed to reach the required certification goal.
Some traders may decide to skip the ‘Base’ Audit Document and are in a position to go straight to our Process Approval Document. This is a far more detailed AEO audit document developed through our understanding of the approach that HM Revenue & Customs will take during future AEO audits.
The following three questions give you an example of the difference in detail from the 'Base' Audit Document through to the Process Approval Document and subsequent questions that result from completion of the full set of AEO audit tools.
- ‘Base’ Audit Document
Are the external boundaries of your premises secured?
- Process Approval Document
Do the security measures in place to secure the external boundaries of your premises comply with the relevant international standards, such as ISO 28000?
- Risk Assessment
What procedures are in place should the external boundaries of your premises be breached?
Our approach is not one focused solely on AEO certification, but also to identify any potential opportunities to save or reclaim duties. If this is successful, it could be possible to use these savings or reclaims to fund, in part or whole, the cost of obtaining AEO status.
Should you wish to use both the AEO Audit Document and the Process Approval Document, or go straight to the latter, then please contact your local Vantis Custom House consultant to arrange either a meeting or a proposal.