Authorised Economic Operator (AEO) status is an internationally recognised quality mark that shows your business’s role in the international supply chain is secure and has customs control procedures that meet UK and EU standards.
Businesses who currently only trade with the EU can apply for AEO status in preparation for 1 January 2021. The authorisation will not become valid until 1 January 2021.
Types of AEO status
There are 2 types of the status:
- Authorised Economic Operator customs simplification (AEOC)
- Authorised Economic Operator security and safety (AEOS)
You can apply for either AEOC or AEOS or you can apply for both.
AEOC (customs simplification)
If you hold this status, you could benefit from:
- a faster application process for customs simplifications and authorisations
- a reduction or waiver of comprehensive guarantees
- a 70% reduction in a business’s deferment account guarantee
- a notification waiver when making entries into a declarant’s records
- moving goods in temporary storage between different member states
- your consignments receiving priority treatment for customs controls
- a lower risk score which may reduce the number of checks customs carry out on your documents and goods
AEOS (security and safety)
If you hold this status, you could benefit from:
- a lower risk score which may reduce the number of checks customs carry out on your documents and goods
- your consignments receiving priority treatment for customs controls
- reduced declaration requirements for entry and exit summary declarations for countries outside the UK and EU
- reciprocal arrangements and mutual recognition with countries outside the EU
Where the status is recognised
If your business has the status in one member state, that status is valid and recognised across the UK and EU.
If you have AEOS status you can benefit from arrangements under Mutual Recognition Agreements (MRA). The EU negotiates MRAs with third country customs authorities.
The EU has negotiated agreements with:
- China
- Japan
- USA
- Andorra
- Norway (security declarations only)
- Switzerland (security declarations only)
The benefits can include:
- faster clearance at the frontier
- less interventions
- lower risk scores
Who can apply
To apply for AEO a business must:
- be a legal entity
- be established in the UK or an EU member state
- be actively involved in customs operations and international trade
- have an Economic Operator Registration and Identification (EORI) number
You can apply if your business is new to customs and can clearly show the processes and procedures you have in place.
Anyone involved in the international supply chain that carries out customs related activities in the UK or EU can apply for AEO status, regardless of the size of your business.
This includes:
- manufacturers
- exporters
- freight forwarders
- warehouse keepers
- customs agents
- carriers
- importers
- port operators
- secure freight parking operatives
- airline loaders
You’re still eligible to apply if you use the services of an agent for your customs matters.
Checks HMRC will carry out against the criteria
HMRC will carry out the checks below to see if you meet the criteria for receiving the status. All businesses must meet the criteria. These checks will take place after you’ve applied and HMRC will take into account the size, nature and complexity of the business when carrying out the assessment.
Approval for AEO status involves audit visits from HMRC staff. Before you apply make sure you’re ready for our officers to attend your premises. We’ll call you shortly after your application has been accepted to arrange these visits.
Tax and customs compliance
We’ll check your business has complied with tax and customs rules over the last 3 years. If your business has been running for less than 3 years, we’ll use the latest available information. We need to know if there have been any serious or repeated breaches of customs rules.
You’ll need to show evidence that you have:
- procedures that identify and report any customs irregularities or errors to us
- taken appropriate action to deal with any irregularities
- procedures that report any customs business changes to us
- clear procedures for handling controlled goods
Customs record keeping
We’ll ask to see an efficient system for managing commercial and in some cases, transport records.
When applying for the status you’ll need to provide evidence that you have:
- a well-maintained logistics system with a full audit trail
- methods to allow us to access your customs records
- a logical administrative system
- documented procedures to manage the flow of goods
- internal controls that detect illegal or irregular transactions
- procedures to handle licences and authorisations
- archive and retrieval procedures in place
- trained staff to tell us of any system errors
- procedures for checking customs declarations submitted by third parties on your behalf
- Information Technology security measures in place
If you’re a small or medium sized business, you do not need complex systems, but they must be appropriate to the size, nature and complexity of the business.
Proven financial solvency
We’ll check the financial records of your business covering the last 3 years. This is to make sure you have the ability to meet your commitments to both us and other creditors.
If you have traded for less than 3 years you can still apply.
We’ll need to:
- see your full management accounts and projections
- see your letter of conformity from your chartered accountant or bank
- check if your business is subject to bankruptcy proceedings or liquidation
We expect your current net assets to be positive. We’ll take into account any special circumstances that mean it’s normal for you to have any net negative assets.
If your business is not required to file accounts, you can provide other financial statements to show us your proven financial solvency.
Practical standards of competence or professional qualifications
Before you make your AEOC application, you must be able to show and give evidence of practical competence in customs matters for the previous 3 years. You’ll need to give evidence of how you’ve maintained the roles, responsibilities and competences.
If your business has been running for less than 3 years, we’ll use the latest available information.
If you have a small business, you must have at least one person with responsibility for customs matters. This can be part of their role and not dedicated solely to customs.
You can use a customs agent to deal with your customs matters. You must be able to give accurate information so the agent can complete declarations on your behalf.
Security and safety
When applying for AEOS, we’ll check the procedures you’ve put in place to protect your business and the supply chain from any risks. You’ll need to make sure your procedures are robust and appropriate to the size and nature of your business. For example, a small business with a secure outer fence and intercom may not need full time security staff.
If you apply for AEOS status you’ll need to show evidence that you:
- have a safety and security risk assessment in place
- have secured external boundaries with documented procedures to control access to your premises
- have measures in place to inspect and protect your cargo units
- prevent unauthorised access to shipping areas, loading docks and cargo areas
- check the security and safety of your goods during storage, manufacture and transport
- agree appropriate safety and security measures with your suppliers
- carry out security screening and procedures for prospective employees and contracted parties
- train your staff in the security and safety requirements
- have contracts for temporary personnel
- have details of owners of cargo units
- have all outsourcing contracts (including cleaning, security, maintenance and any others)
- regularly check and review your processes
You can also provide evidence when we visit, that you have a safety and security certificate from one of the following:
- an international convention
- an international standard of the International Organisation for Standardisation
- a European standard of a European standardisation body
This means we may be able to carry out less checks on your application.
We’ll expect you to have a strong recruitment policy that stands up to scrutiny.
You should have a pre-employment check in place for all staff. This should cover the previous 3 years at least. You’ll need to show evidence of this.
A regulated agent or known consignor should have a 5 year employment history check.
If an employee is in a security sensitive position or a high risk area, they must have received security screening. The same level of background checks apply to agency workers you employ.
Before you apply
You must have:
- read and understood the criteria and checks involved
- gathered the information you’ll need to answer the questions
- your EORI number
- responsible customs managers and specific personnel available onsite for the audit visits
- documented procedures available
How to apply
A person in charge of customs matters within the business should apply for the status. You’ll need to give up to date evidence of the person’s role, responsibilities and competences.
To meet the AEO criteria, you must have evidence of your business procedure and processes. We’ll visit you to check your documentation and test your systems. The evidence of your business meeting the AEO criteria should be available to see on our visits. Make sure your business is ready for the visits before you apply.
If you’re a group of companies, you need to submit separate applications for each legal entity.
After we receive your application, we’ll carry out our checks and aim to visit you as soon as possible. AEO status can take up to 120 days to approve.
You can find more information about applying for AEO status.
You can find more detailed guidance about Authorised Economic Operator.
There’s also information on the European Commission website and World Customs Organisation website.
From 1 January 2021
We’ll automatically transfer your AEO authorisation (AEOC, AEOS or AEOF) to the new UK AEO scheme from 1 January 2021. This will be a new UK status and will replace your existing EU status. We will write to you before the end of this year with more details about this change.
If you’re a trader in Northern Ireland
If you want to continue to access AEO benefits in Northern Ireland and the EU, you will also require an NI AEO authorisation (NI AEO).
All NI AEO authorisations will continue to fall within the provisions of the Union Customs Code and be recognised in the EU.
We will write to all AEO authorisation holders in November to check whether you are eligible and require an NI AEO authorisation. We’ll also gather information about your NI operations. To be eligible to hold an NI authorisation, you need to be:
- established in NI and
- a person who in the course of their business is involved in activities covered by customs legislation in NI