Breakfast Meeting: Smart Business Infrastructure – Authorised Economic Operator, Customs & Central Excise
AMCHAM’s breakfast meeting on ‘Smart Business Infrastructure – Authorised Economic Operator, Customs & Central Excise’ was held on Thursday, 20th April 2017 at Hotel Westin Velachery in Chennai. Mr. Aubrey Daniels, Regional Director – Tamil Nadu Chapter, AMCHAM chaired the meeting. The guest speakers were Mr. Santosh Dalvi, Partner – KPMG, Mr. Sunil Kumar Sinha IRS, Commissioner of Customs & AEO Program Manager and Dr. Anchita Pandoh IRS, Assistant Commissioner of Customs, AEO Program. The event was facilitated and sponsored by KPMG.
The tone for the meeting was set by Mr. Santosh Dalvi and MG Ramachandran of KPMG who mentioned that the Government of India was very keen to scale up on the World Bank’s ‘ease of doing business’ rankings and to facilitate global trade through the ‘Make in India” initiative.
Customs Commissioner, Mr. Sunil Kumar Sinha, made a presentation on the Authorised Economic Operator Program, an initiative rolled out by the World Customs Organisation with over 150 member countries presently. The U.S. has been promoting the C-TPAT for a long time, which is one layer in U.S. Customs and Border Protection’s (CBP) multi-layered cargo enforcement strategy. Through this program, CBP works with the trade community to strengthen international supply chains and improve United States border security. C-TPAT is a voluntary public-private sector partnership program which recognizes that CBP can provide the highest level of cargo security only through close cooperation with the principle stakeholders of the international supply chain such as importers, carriers, consolidators, licensed customs brokers, and manufacturers.
Commissioner Sinha said customs organizations all over the world are tasked with the twin challenges of securing the borders from unlawful trade and at the same time facilitating the legitimate trade. Trade security and facilitation is one of the key determinants for the economic development of the countries. Customs, being the government organization that controls and administers the international movement of goods, is in a unique position to provide increased security to the global supply chain and to contribute to socio-economic development through revenue collection and trade facilitation.
With a view to secure the international supply chain, the World Customs Organization had in June 2005 adopted the SAFE Framework of Standards to secure and facilitate global trade. Since then, this unique international instrument has ushered in modern supply chain security standards with the help of a closer partnership between customs and business in the form of the Authorized Economic Operator (AEO) Program.
The AEO program seeks to provide tangible benefits in the form of faster customs clearances and simplified customs procedures to those business entities who offer a high degree of security guarantees in respect of their role in the supply chain. An entity with an AEO status is considered a ‘secure’ trader and a reliable trading partner. There are three tier AEO programs for importers and exporters (AEO-T1, AEO-T2, and AEO-T3). Accordingly, the AEO Program Manager may, following an application by an economic operator, issue the following Authorized Economic Operator Certification subject to scrutiny of documents for the T1 and onsite verification for the T2 Certification. Logistics providers, custodians or terminal operators, customs brokers and warehouse operators shall be provided with an AEO–LO certification, subject to scrutiny of documents and on-site physical verification.
The AEO certification has many benefits for the importer/exporter, who can take his consignment directly from the port of entry to his facility for all imports and the factory sealed container can be directly loaded on to a vessel. Customs duty can be paid twice a month for all transactions from the 1st to the 15th and 16th to the end of the month. The AEO program reduces transaction costs and improves speed of the entire transaction in a transparent manner. Each customs office has a customer relationship manager who will provide immediate solutions for all AEO certified operators.