I am advised by Revenue that the EU established its Authorised Economic Operator (AEO) concept based on internationally recognised standards, created a legal basis for it in 2008, and updated and amended the conditions and benefits of same in the Union Customs Code (UCC) through its implementing and delegated Acts. The AEO programme, which aims to enhance international supply chain security and to facilitate legitimate trade, is open to all supply chain actors.
An AEO is an economic operator who is deemed reliable in the context of their customs related operations, and therefore, is entitled to enjoy benefits throughout the EU. There is no legal obligation for economic operators to become an AEO, it is a matter of the operators own choice based on their specific situation.
According to Article 38 of the UCC, the status of AEO consists of different types of authorisations: AEO for Customs Simplifications (AEOC), AEO for Security and Safety (AEOS) and AEO Customs Simplifications/Security and Safety (a combination of the AEOC and AEOS). The criteria, against which applicants are assessed and must meet, fall within the following general headings:
- Record of compliance with customs legislation and taxation rules, including no record of serious criminal offences relating to the economic activity of the applicant;
- Demonstration of a high level of control of its operations and of the flow of the goods, by means of a system of managing commercial and, where appropriate, transport records, which allows appropriate customs controls;
- Proven financial solvency.
And depending of the type of AEO:
- Practical standards of competence or professional qualifications directly related to the activity carried out (AEOC);
- Appropriate security and safety standards (AEOS).
All applicants for AEO are assessed for their suitability, based on the EU agreed criteria, on a case by case basis. Revenue assess if the applicant meets the required criteria and determines whether AEO status should be authorised, or not, and what conditions or arrangements are appropriate for each particular case. There is no fee for application, nor is there any required size or scale of business.
I am advised by Revenue that 144 economic operators currently hold AEO status in Ireland. The breakdown for each of the years 2014 to 2017 and to date in 2018 is as follows: 2014, 12; 2015, 8; 2016, 10; 2017, 17 and 2018 (to 9th May 2018), 5. I am advised that on average Revenue has received 1 application per month.
With regards to the number of companies that may require AEO status as a consequence of the UK leaving the Single Market and the Customs Union, as already stated, there is no legal obligation for economic operators to become an AEO, it is a matter of the operators own choice based on their specific situation. Revenue is meeting with representative groups and attending industry seminars to discuss the potential issues resulting from Brexit. Revenue continues to advise businesses to examine the possible impacts of Brexit on their supply chains and to consider applying for one or more of the authorisations or simplifications available that best suit their business model.
Advice and assistance on customs authorisations and simplifications is available on the Revenue website Revenue will continue to engage with representative groups, taking account of developments in the ongoing EU-UK negotiations.