Customs clearance procedures: India gives importers major relaxation under ''AEO''

Indian customs authorities have decided to give major relaxation to importers in customs clearance procedures including reduced inspection and examinations of consignments and clearance of cargo before payment of duty under a proposed scheme of ''Authorised Economic Operator (AEO)''.
Tax experts told Business Recorder here on Thursday that the Central Board of Excise and Customs, New Delhi has drafted a new scheme of AEO for businessmen importers/exporters with benefits of reduced examination and inspection, acceptance of pre-arrival import declarations and clearance of cargo before duty payment. The scheme would simplify customs procedures for businessmen including importers/exporters, warehouse owners, custom agents, cargo forwarders and carriers engaged in the international movement of goods.
According to the draft scheme, in order to ensure security in supply chain of the movement of goods, the Central Board of Excise & Customs (CBEC) is considering introduction of scheme. Consistent with the "SAFE Framework" developed by the WCO, the Indian Customs administration has developed an AEO Programme that encompasses various players in the international supply chain such as importers, exporters, warehouse owners, Custom House Agents, cargo forwarders and carriers. The objective of the AEO Programme is to provide businesses with an internationally recognised quality mark which will indicate their secure role in the international supply chain and that their customs procedures are efficient and compliant. An entity with an AEO status can, therefore, be considered a ''secure'' trader and a reliable trading partner.
Under the scheme, a business categorised by the Customs as AEO can enjoy benefits flowing from being a more compliant and secure company as well as favourable consideration in any customs proceedings coupled with better relations with Customs. The AEO status will also ensure a low risk rating that may be incorporated into Customs ''Risk Management System'' (RMS) and used to determine the frequency of Customs physical and documentary checks. The benefits may also include simplified Customs procedure, declarations, etc. besides faster customs clearance of consignments of/for AEO status holders.
In case of importers, the benefits for AEO status holders include reduced examination and inspection, acceptance of pre-arrival import declarations, clearance of cargo before duty payment and periodical duty payment. In case of exporters, the benefits would cover reduced examination and inspection, acceptance of export declarations without bringing goods into Customs area.
Under the concept of Authorised Economic Operator (AEO), a party engaged in the international movement of goods is approved by Customs as compliant with the supply chain security standards, and given benefits, such as simplified Customs procedures and reduced Customs intervention. The AEO concept is being increasingly adopted by various Customs administrations with the objective of securing the supply chain with resultant benefits for the trading community.