The message at this year’s BIFA Conference on the 26th November was that all companies in the international supply chain should consider acquiring AEO status to gain the benefits of the forthcoming Union Customs Code (UCC). Current customs regimes will begin to be replaced from 1st May 2016 by the UCC and, although not mandatory, those without accreditation could lose out on mandatory guarantee waivers or reductions.

It was following the introduction in the US of the Container Security Initiative (CSI) after the terrorist attack on the World Trade Centre in 2001 that the EU brought in the AEO (Authorised Economic Operator) programme.

The types of AEO status are as follows:

  • AEOC – the customs simplification certificate
  • AEOS – operators must be accredited to meet safety and security standards

AEOF, the combined standard, will no longer exist under the UCC (Union Customs Code). Companies will however have the option to hold both AEOC & AEOS side by side. Those organisations with existing AEO status will have a distinct advantage when the UCC is introduced. HMRC’s goal is to be the leading customs authority by 2020 in facilitating trade whilst providing a safe and secure environment, and part of the design of the UCC regulations is to force everyone in the international supply chain to hold AEO certification.

Companies such as freight forwarders, ports, shipping lines and importers that currently hold AEO are in the best position, as any future AEO applications will have to be UCC compliant. New criteria under the UCC includes a full assessment of the companies tax activities by HMRC and a more detailed look as past compliance issues.

Complaints that the procedure is time-consuming and complex have prompted HMRC to reassess the application process. However a high early rejection rate is still anticipated by HMRC as some applicants have no procedures or processes in place.

Across the EU the UK lags far behind its European neighbours in the number of AEO certificates issued, with Germany holding the most with over 6,000 AEOs.

If you were unable to attend the conference in London, a BIFA regional conference will take place on January 28th 2016 at Pontlands Park Hotel, West Hanningfield Road, Great Baddow, Chelmsford, Essex CM2 8HR, (3 minutes off the A12 at Junction 17) between 10:00 and 16:30. To reserve your place please contact your regional representative, Paul Newman on Places are limited.

To find out more about how the changes could affect your business, please contact us.