The Authorised Economic Operator (AEO) certification is a flagship initiative under the World Customs Organization (WCO) SAFE Framework of Standards, adopted by India under its Customs Modernization Programme. The scheme, implemented by the Central Board of Indirect Taxes and Customs (CBIC), seeks to enhance international supply chain security and facilitate legitimate trade.

Statutory Framework

The AEO programme is governed by:

• Section 157 of the Customs Act, 1962 – empowering the CBIC to make regulations.
• Circular No. 33/2016-Customs, dated 22.07.2016 – consolidated guidelines for AEO-T1, T2, and T3 tiers.
• Circular No. 26/2022-Customs, dated 14.11.2022 – latest procedural relaxations.
• WCO SAFE Framework of Standards, to which India is a signatory.

Categories of AEO Certification

The AEO Programme in India offers certification under three tiers:

• AEO-T1: Entry-level for importers/exporters with basic compliance requirements
• AEO-T2: Requires onsite verification of internal processes.
• AEO-T3: For importers/exporters who have enjoyed AEO-T2 status for at least two years and have robust compliance history.
• AEO-LO (Logistics Operators): Extended to custodians, terminal operators, customs brokers, and warehouse operators.

Benefits of AEO Certification

As per Circular No. 33/2016-Customs (and updated by Circulars No. 03/2018-Customs, 26/2022-Customs), the benefits include:

Common for All AEO Tiers:

• Direct Port Delivery (DPD) and Direct Port Entry (DPE).
• Faster clearance through reduced examination and priority processing.
• Recognition by Partner Government Agencies (PGAs) such as FSSAI, Drug Controller, etc.
• Priority adjudication and dispute resolution under CBIC framework.

Additional Benefits to AEO-T2 and T3:

• Deferred Duty Payment under Rule 4 of Deferred Payment of Import Duty Rules, 2016.
• Faster refund and rebate processing under Customs and GST.
• Faster adjudication and dispute resolution.
• No routine audit for AEO-T3 entities as per Circular 33/2016-Customs Para 3.2.3(d).
• Mutual Recognition Agreements (MRAs) with other countries (e.g., with Hong Kong, South Korea, UAE).

Specific Benefits to AEO-LO:

• Waiver from certain requirements under the Handling of Cargo in Customs Areas Regulations, 2009.
• Recognition across customs stations and prioritized processing of licenses and permissions.

Recent Changes in AEO Regulations

The most notable amendments have been made via:

🔹 Circular No. 26/2022-Customs dated 14.11.2022:

• Simplification of renewal procedures: AEO-T1 entities can now opt for auto-renewal subject to self-declaration and no change in circumstances.
• Digitization of processes: The AEO application and processing are now integrated with ICEGATE, and tracked via CBIC’s automated systems.
• Extension of validity period: The validity of AEO status extended from 3 years to 5 years for T2 and T3 categories.

🔹 Circular No. 08/2021-Customs dated 09.03.2021:

• Relaxations provided for MSMEs under AEO-T1.
• Waiver of certain documentation requirements and physical verification.

Conclusion

The AEO programme acts as a strategic trade facilitation tool enhancing ease of doing business. With recent reforms simplifying compliance and expanding benefits, AEO certification offers legal and procedural empowerment to trusted business entities in India’s international trade landscape.