The Union Customs Code (EU customs legal framework) was implemented in May 2016. The changes are fairly comprehensive but gradual. The biggest concern for businesses is the cashflow implications if they don’t hold AEO (Authorised Economic Operator) status.
Type of business affected
Those importing goods from outside the EU, and then re-exporting once goods are processed or repaired.
Possible scenario
Company already holds authorisation from HMRC for duty relief scheme ‘Inward Processing’ to manage returned goods. Valid until Feb 2018, upon renewal HMRC demand greater level of guarantee for duty liabilities as a result of non-AEO status. HMRC also expects company to consider AEO standards before next review.
Impact on business
- Higher cost for guarantee
- Potential increase in duty bills
- Reduced access to import duty suspension scheme
- Resource and training costs for AEO consideration.
Benefits of AEO
- Waiver on customs guarantee
- Faster customs clearance
- Lower risk profile at customs
- Less scrutiny
- Universally recognised
- Access to high value tender opportunities.
Summary of change
HMRC are pushing companies towards obtaining AEO status in order to benefit from customs privileges, faster clearance etc. but it seems they may accommodate companies who can demonstrate they meet the standards.
Non-AEO status will lead to more scrutiny when applying for various duty relief schemes. There is a clear attempt here to distinguish between high volume traders, and smaller less frequent ones by introducing a raft of ‘simplified procedures’ but less benefits without AEO.
AEO isn’t mandatory, but is the EU’s attempt at securing supply chains in the wake of cargo security reform during the last decade. In a post-Brexit environment, this could be a vital tool to minimise disruption to your supply chains and export customers.
Dorset Chamber offer training and advice on the AEO standards. Why not come along to our half day workshop on 30th November to find out more.