A.K Singha : The concept of Authorized Economic Operation (AEO)
At the outset, the Central Board of Excise and Customs (CBEC) should be congratulated for bringing out a draft scheme of Authorized Economic operator (AEO).
Of late, Indian Customs has been keeping pace with the latest developments internationally
and introduction of new working concepts in its administration.
In 2005, the World Customs Organization (WCO), an organization of 178 Customs administrations, adopted one of the main elements of the security of the Community Customs Code and created the concept of AEO.
The status of AEO granted by one Member State is recognised by the other Member State.
Each member state is expected to facilitate global trade through simplified Customs procedures and least Customs intervention apart from creating an easy access to comply with the new security requirements under the security framework.
Economic operators have to submit pre-arrival and pre-departure information on goods entering or leaving the Member States.
The security type of AEO certificate and the combined one allow their holders to benefit from facilitations with regard to new Customs controls relating to Security.
The detailed draft provisions have already been notified by the CBEC and circulated for views and comments and suggestions from the trade and industry Associations, departmental officers and others. Those interested in finer details of the scheme may go through the scheme circulated by the Ministry Vide F.No.450/179/2009-cus IV Dt.01.12.2010.
The scheme prima facie appears beneficial to the bonafide importers/ exporters. This is in fact a scheme of self-assessment which will reduce the currently prevailing dependency of importers and exporters solely on CHAs.
This scheme is transparent enough to provide relief to the importers/ exporters from the growing menace of corrupt practices adopted by the departmental officers and CHAs.
The scheme will also bring cost effectiveness as it reduces the overhead costs and demurrage charges. Movement of the cargo will be swift and faster, resulting in speedy financial turnovers. The scheme can be visualized as another positive step in the economy of a developing country.