The Central Board of Excise & Customs (CBEC) has released a draft scheme of Authorised Economic Operator (AEO) for public comments. Under the AEO programme, 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, which would speed up the clearances of import and export goods.

The programme is based on the World Customs Organisation's (WCO) SAFE Framework of Standards to secure and facilitate global trade. The framework was adopted by WCO, an organisation of 178 customs administrations, in 2005 to address growing concern among the customs administrations about the threats posed to national and global security through the misuse of channels of import and export.

The AEO programme is being increasingly adopted by various customs administrations world over with the objective of securing the supply chain with resultant benefits for the trading community, the finance ministry said in a statement today.

The programme encompasses various players in the international supply chain such as importers, exporters, warehouse owners, custom house agents, cargo forwarders and carriers. Once granted the AEO status, businesses will have a 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. This will particularly benefit small businesses that account for the majority of importers and exporters, it said. An AEO status holder can enjoy benefits such as favourable consideration in any customs proceedings and a low-risk score resulting in reduced customs examination and inspection, clearance of cargo before duty payment.