Authorised Economic Operator ― overview

By Tolley
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The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Authorised Economic Operator ― overview
  • Background
  • Criteria for granting AEO authorisations
  • Types of AEO authorisation
  • Obtaining AEO authorisation
  • Maintaining the AEO status
  • Appeals and reconsiderations

This guidance note provides a summary of the information produced by HMRC regarding the Authorised Economic Operator (AEO), its main benefits and how to apply for the scheme. AEO authorisation has become more important since the introduction of the Union Customs Code (UCC) and more information on the UCC can be found inthe Union Customs Code ― overview guidance note and other notes inthe Union Customs Code subtopic. This guidance note should be read inconjunction with the Authorised Economic Operator ― eligibility criteria guidance note.

Background

AEO is recognised internationally as a quality mark that indicates that the business’ role inan international supply chain is secure and that the business has compliant / efficient controls and procedures inoperation. AEO is not mandatory but it could be beneficial for the business to use the scheme as it can give access to certain simplified customs procedures and certain shipments may be fast tracked through customs and safety / security procedures.

Notice 117: Authorised Economic Operator ; Regulation (EU) No 952/2013 ; Implementing Regulation (EU) 2015/2447 ; Delegated Regulation (EU) 2015/2446 ; Authorised Economic Operator 

If not all of the parties involved inthe international supply chain have AEO (or equivalent for non-EU established businesses) status, then these shipments will have a greater risk rating which means that it is more likely that a customs authority could undertake checks at the border. It would also affect the mutual recognition scheme with trading partners as they could insist that all parties have AEO security and safety authorisation before they will be allowed to use mutual recognition.

AEO status is for EU established businesses that are actively involved incustoms operations and international trade and have an Economic Operator Registration and Identification Scheme (EORI) number.

The EU AEO database  enables businesses to confirm the AEO status of an EU resident business.

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