{"id":30326,"date":"2021-05-14T12:22:30","date_gmt":"2021-05-14T06:52:30","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=30326"},"modified":"2021-05-14T12:22:31","modified_gmt":"2021-05-14T06:52:31","slug":"aeo-package-for-msmes","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/aeo-package-for-msmes\/","title":{"rendered":"AEO Package for MSMEs: All you need to know"},"content":{"rendered":"\n<p class=\"has-drop-cap\">AEO stands for Authorized Economic Operator, is a voluntary program created by the World Customs Organization (WCO) as a secure framework for worldwide trade standards. It envisages improving the global supply chain security &amp; simplifying the movement of lawful goods. This write-up will shed some light on the AEO package for <a href=\"https:\/\/corpbiz.io\/msme-registration\"><strong>MSMEs in India<\/strong><\/a>.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/aeo-package-for-msmes\/#What_is_an_AEO_Package\" >What is\nan AEO Package?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/aeo-package-for-msmes\/#Foundation_of_AEO_Package\" >Foundation\nof AEO Package<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/aeo-package-for-msmes\/#Benefits_of_AEO\" >Benefits\nof AEO<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/aeo-package-for-msmes\/#Eligible_Candidates_for_AEO_Package\" >Eligible\nCandidates for AEO Package<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/aeo-package-for-msmes\/#The_Eligibility_Criterion_related_to_AEO_Package\" >The Eligibility\nCriterion related to AEO Package<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/aeo-package-for-msmes\/#Validity_Renewal_Regarding_the_AEO_Package\" >Validity\n&amp; Renewal Regarding the AEO Package<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/corpbiz.io\/learning\/aeo-package-for-msmes\/#Relaxation_Available_to_MSMEs_under_the_AEO_Package\" >Relaxation\nAvailable to MSMEs under the AEO Package<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/corpbiz.io\/learning\/aeo-package-for-msmes\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_an_AEO_Package\"><\/span>What is\nan AEO Package?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>AEO is a program based on the partnership\nbetween the customs &amp; business, wherein the economic operator is granted\nsuch status. The program determines the trustworthiness as well as reliability\nof the economic operator.<\/p>\n\n\n\n<p><em><strong>Following grounds are examined to determine the operator\u2019s reliability<\/strong><\/em><\/p>\n\n\n\n<ul><li>Accounting\nsystem<\/li><li>Compliance\nwith customs legislation<\/li><li>Appropriate\nsecurity standards<\/li><li>Solvency\nstandards.<\/li><\/ul>\n\n\n\n<p>It allows the easy procedure to be followed by\nthe firm\u2019s security-related custom control &amp; easing compliance with the\ncustoms legislation. It envisages improving the security aspect of global\nsupply chains and simplify the transit of lawful goods.<\/p>\n\n\n\n<p><em><strong>It includes the following objectives:<\/strong><\/em><\/p>\n\n\n\n<ul><li>To\ndelink payment &amp; clearance;<\/li><li>To\naccept web-based declaration;<\/li><li>Improves\nefficiency;<\/li><li>Self-certification;<\/li><li>prompt\nrefund &amp; drawback;<\/li><li>Request\nbased examination etc.<\/li><\/ul>\n\n\n\n<p>AEO is a voluntary program &amp; entails various\nglobal supply chain participants. It empowers the Indian Customs to build &amp;\nstreamline the cargo security via close co-operation in the presence of the\nprincipal stakeholders of the international supply chain (includes importers,\nexporters, custodians, etc).<\/p>\n\n\n\n<p><em><strong>Some certificates render different authorization:-<\/strong><\/em><\/p>\n\n\n\n<ul><li>AEO authorization \u201cCustoms Simplifications\u201d (AEOC)<\/li><li>AEO grant \u201cSecurity\u201d (AEOS)<\/li><li>AEO authorization \u201cCustoms Simplifications &amp; Security\u201d (AEOC &amp; AEOS) (The Combined Authorization).<\/li><\/ul>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/what-is-msme-registration-and-how-to-get-it\/\">What is MSME Registration and how to get it? <\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Foundation_of_AEO_Package\"><\/span>Foundation\nof AEO Package<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>AEO is a WCO-driven initiative that recognized as a safe framework of the standards to render international trade in 2005. After that, India\u2019s authorities step forward to adopt the same framework of WCO, and it has ensured the simplification in the <em><strong>Customs<\/strong><\/em><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/Customs\"><em><strong>[1]<\/strong><\/em><\/a><\/sup> compliance. The CBIC (Central Board of Indirect Taxes &amp; Customs introduced the AEO program in our country in 2011.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Benefits_of_AEO\"><\/span>Benefits\nof AEO<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><em><strong>Entities with AEO status can avail following advantages:-<\/strong><\/em><\/p>\n\n\n\n<ul><li>Recognition\nas safe, secure, &amp; compliant business partners in global trade<\/li><li>Prompt\nclearance<\/li><li>Delayed\nPayment of Duty<\/li><li>MRA\nrecognition<\/li><li>The\nfacility of Direct Port Entry (DPE)\/ Direct Port Delivery (DPD)<\/li><li>Abandonment\nof whole or part of the Bank Guarantee requirements<\/li><li>Relinquishment\nof Merchant Overtime Fees (MOT)<\/li><li>Swift\ndisbursal of drawback amount<\/li><li>Prompt-tracking\nof refunds &amp; adjudications<\/li><li>Access\nto Client Relationship Manager.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Eligible_Candidates_for_AEO_Package\"><\/span>Eligible\nCandidates for AEO Package<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Any entity engaged with the international supply\nchain undertaking Custom based activities can file an application for AEO\ncertification. The list below contain individuals who can apply for AEO\ncertification.<\/p>\n\n\n\n<ul><li>Importer\n&amp; Exporter<\/li><li>Warehouse\noperator<\/li><li>Custom\nbankers<\/li><li>Logistic\nservice provider (i.e., carriers, airlines, etc.)<\/li><li>Custom\nhouse agents<\/li><li>Custodians\nor terminal operators<\/li><li>Port\noperators, Stevedores, etc.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_Eligibility_Criterion_related_to_AEO_Package\"><\/span>The Eligibility\nCriterion related to AEO Package<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><em><strong>Anyone who seeks AEO certification must ensure conformity with the eligibility criterion mentioned below;<\/strong><\/em><\/p>\n\n\n\n<ol><li>Individual\nor entity must be involved in activities related to Custom;<\/li><li>Individual\nor entity must have dealt with a minimum of 25 Customs documents, either bill\nof entry or shipping bill; and<\/li><li>Individual\nor entity must be operating actively for the three Financial Years.<\/li><\/ol>\n\n\n\n<p>The firm must be in the active phase for the\nlast 3 Financial Years from the application date. But, in some scenario, AEO\ncertification can be accessible to the newly established business based on the\nverification of internal controls by considering:<\/p>\n\n\n\n<ul><li>Its\nfinancial standing;<\/li><li>Maintenance\nof approved safety and security standards;<\/li><li>Commercial\nmanagement system; &amp;<\/li><li>Transport\nrecord (if necessary).<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Validity_Renewal_Regarding_the_AEO_Package\"><\/span>Validity\n&amp; Renewal Regarding the AEO Package<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>AEO certificate is issued for a limited timeline, and once such period is over, renewal is the only way to activate it again.&nbsp; The same is highlighted in the tabular form below:-<\/p>\n\n\n\n<table class=\"table table-bordered\"><tbody><tr><td>\n  <strong>AEO\n  Status<\/strong>\n  <\/td><td>\n  <strong>Applicability<\/strong>\n  <\/td><td>\n  <strong>Validity<\/strong>\n  <\/td><td>\n  <strong>Renewal<\/strong>\n  <\/td><\/tr><tr><td>\n  AEO \u2013 T1\n  <\/td><td>\n  It is conferred to an importer or\n  exporter only without on-site inspection of the premises.\n  <\/td><td>\n  3 year\n  <\/td><td>\n  30 days\n  <\/td><\/tr><tr><td>\n  AEO \u2013 T2\n  <\/td><td>\n  It is conferred to an importer or\n  exporter only after on-site inspection of the premises.\n  <\/td><td>\n  3 Year\n  <\/td><td>\n  60 days\n  <\/td><\/tr><tr><td>\n  AEO \u2013 T3\n  <\/td><td>\n  It is conferred to an importer or\n  exporter who has served under AEO T2 status for two years, preceding the\n  application date;&nbsp; an importer or an\n  exporter have AEO T2 or AEO LO certificates, &amp; its other partners hold\n  the AEO T2 or AEO LO certificates or other equivalent license granted by\n  foreign customs.\n  <\/td><td>\n  5 Year\n  <\/td><td>\n  90 days\n  <\/td><\/tr><tr><td>\n  AEO \u2013 LO\n  <\/td><td>\n  It is granted to economic operators and\n  not to the importer or an exporter only after on-site inspection of the\n  premises.\n  <\/td><td>\n  5 Year\n  <\/td><td>\n  90 days\n  <\/td><\/tr><\/tbody><\/table>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Relaxation_Available_to_MSMEs_under_the_AEO_Package\"><\/span>Relaxation\nAvailable to MSMEs under the AEO Package<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>MSME, i.e. Micro, Small, and Medium Enterprises, is a dynamic sector of the Indian economy. Considering the invaluable efforts made by the MSMEs to lessen the impact of Covid 19 on India\u2019s economy, CBIC has introduced an initiative, viz \u2018Liberalized MSME AEO Package\u2019 for the MSMEs,&nbsp; The \u2018Liberalized MSME AEO Package\u2019 aims to simplify the compliances and procedural requirements to streamline the procedure for trade. <\/p>\n\n\n\n<table class=\"table table-bordered\"><tbody><tr><td>\n  <strong><em>Procedural Requirements<\/em><\/strong>\n  <\/td><td>\n  <strong><em>AEO T-1\/ T-2<\/em><\/strong>\n  <\/td><td>\n  <strong><em>MSMEs AEO T-1\/ T-2<\/em><\/strong>\n  <\/td><\/tr><tr><td>\n  <em>Eligibility Requirement<\/em>\n  <\/td><td>\n  Handling\n  mini.25 Customs documents during the erstwhile financial year\n  <\/td><td>\n  Handling\n  mini. 10 Customs documents, subject to holding mini of 5 documents in each\n  half-year period of the pastfinancial year\n  <\/td><\/tr><tr><td>\n  <em>Business Activities<\/em>\n  <\/td><td>\n  At\n  least three financial years prior to the application date\n  <\/td><td>\n  At\n  least 2 financial years prior to the application date\n  <\/td><\/tr><tr><td>\n  <em>Qualifying Period for Legal and Financial\n  Compliance<\/em>\n  <\/td><td>\n  The\n  last three financial years\n  <\/td><td>\n  Only\n  the last two financial years\n  <\/td><\/tr><tr><td>\n  <em>Time Limit for Processing of Application<\/em>\n  <\/td><td>\n  AEO\n  T1 -one month, \n  AEO\n  T2 application- six months\n  <\/td><td>\n  Fifteen\n  working days.\n  <\/td><\/tr><tr><td>\n  <em>Documents \/ Annexures<\/em>\n  <\/td><td>\n  AEO\n  T1 \u2013 Annexure A, B, C, D, E.1-E.4AEO T2 \u2013 Annexure A, B, C, D, E.1-E.4,\n  E.5.1-E.5.7\n  <\/td><td>\n  MSME\n  AEO T1- Annexure 1 &amp; 2 onlyMSME AEO T2- Annexure 1, 2, &amp; 3 only\n  <\/td><\/tr><\/tbody><\/table>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The AEO programme serves two-fold objectives \u2013 employing enhance security measures in the global supply chain and facilitation of Importers, logistic operators, exporters to improve the trading practices. AEO is a globally recognized framework that sought the simplification of the existing Customs clearances norms.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/how-msme-registration-can-ensure-business-growth\/\">How MSME Registration Can Ensure Business Growth?\n<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>AEO stands for Authorized Economic Operator, is a voluntary program created by the World Customs Organization (WCO) as a secure framework for worldwide trade standards. It envisages improving the global supply chain security &amp; simplifying the movement of lawful goods. This write-up will shed some light on the AEO package for MSMEs in India. What [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":30372,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[176],"tags":[1741],"acf":{"service_id":"71"},"authorName":"Pankaj Tyagi","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/01\/MicrosoftTeams-image-42.jpg","authorDescription":"Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.","postViews":4126,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/30326"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=30326"}],"version-history":[{"count":33,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/30326\/revisions"}],"predecessor-version":[{"id":30373,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/30326\/revisions\/30373"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/30372"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=30326"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=30326"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=30326"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}