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The Benefits Of Authorised Economic Operator Status
Robert Marchant
29/06/2018
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Robert Marchant explains that gaining AEO status now could make international trade easier post-Brexit.

Authorised Economic Operator (AEO) status is an internationally recognised marker that your company’s international supply chains are secure, and your customs controls and procedures are efficient and compliant.

The benefits of AEO

The main benefits of AEO status are:

  • access to simplified customs procedures
  • smoother, and possibly quicker, progress for your shipments through customs import procedures
  • you can be seen as a preferred supplier in tender processes.

AEO is available to UK businesses today, but take-up has been slow because there are not sufficient incentives to make it attractive. But that will change when the UK leaves the EU.

AEO after Brexit

If the UK is no longer part of the Customs Union after Brexit, purchases of goods coming to the UK from the EU are likely to be subject to stringent customs checks at the UK border, causing delays.

The UK government is reported to be investigating technology solutions that allow businesses with ‘trusted trader’ status quicker clearances at the UK border. We don’t yet know whether this will be AEO in its current form or something similar, but this makes it likely that a company with AEO will have an advantage over a company that does not; whatever the form of the UK’s trade arrangements with the EU post Brexit.

The same considerations will also apply  for goods moving into the EU from the UK. AEO should assist UK businesses with such selling and moving goods into the EU.

Who is eligible for AEO

If you are involved in an international supply chain, and carry out customs-related activities in the EU, you can apply for AEO status. Any business can apply, but those most likely to benefit include:

  • manufacturers
  • exporters
  • freight forwarders
  • airline loaders
  • importers.

Applying for AEO

The application process can be lengthy. A number of forms need to be completed, and evidence of processes and procedures must be presented to support the application.

You will need to meet criteria around:

  • compliance
  • record keeping
  • solvency
  • professional qualifications and/or practical standards of competence.

If the application is complete and meets the necessary criteria, HMRC will visit the business to verify supporting documentation and ensure that all conditions have been met.

The increasing popularity of AEO

A number of trade organisations and advisors see AEO status – or a future ‘trusted trader’ equivalent – as a valuable advantage for efficient post-Brexit trade, and applications are on the rise.

In one year, the number of companies with AEO status has gone up by 10% to 627 at the time of writing, with another 50 applications in progress. 

This volume of applications is expected to increase once the impact of Brexit hits, and companies realise the value of AEO status. 

We recommend you start the preparation and application processes now, to avoid getting stuck in a queue; particularly as HMRC may not have the resource in place to handle an increase in applications.

How we can assist

We can help you carry out a feasibility exercise to determine if you can apply for AEO, and identify areas where improvement/process changes will increase the chances of a successful application.

We can also assist with the application process itself. This would include help with the forms, making sure all relevant supplementary evidence is held, and ensuring your procedures are properly documented.

Contact us

Robert Marchant
Robert Marchant
Partner, VAT
London