A E O Mutual Recognition

The EU recently published the first draft of their negotiation document. It sets out their version of the legal text on the partnership with the UK. You can read it here.  Our update here focuses on Customs and AEO.

There are 1071 businesses already approved for AEO in the UK. UK approval will have been a substantial effort and commitment by most, so any erosion of AEO benefits during the negotiation is a rising concern.

This first EU draft makes reference to Authorised Economic Operator (AEO) status however the UK draft has not been published so it is not possible to see if the 2 sides are aligned on this topic at present.

Negotiations between the UK and EU teams continue. On 18 March, when questioned, UK Prime Minister Johnson made no indication that an extension to the UK-EU negotiations or transition period will be necessary as a result of the COVID-19 pandemic, saying “Brexit was done”.

AEO – What does the EU draft text call for ?

The Customs Article of the draft document requires the establishment of an AEO program. It also describes criteria for AEO in familiar terms and requires each side to establish or maintain an AEO program.

The criteria for AEO as proposed are ;

1.  no serious infringements of Customs legislation.
2.  high level of control of business operations.
3.  financial solvency.
4.  professional competence.
5.  appropriate levels of safety and security.

These criteria mirror the current EU AEO program.

AEO – Benefits

AEO benefits noted in the draft are in line with the current EU AEO program, including:

• Fewer physical / document controls.
• Advance notification of customs controls.
• Priority treatment if selected for controls.
• Simplifications.

AEO – Next Steps

We continue to closely monitor the status of AEO and mutual recognition and will provide updates. For businesses concerned about their AEO Status Clearlight Customs provide a full range of AEO services and will be pleased to advise. Contact us here for further information.