PRIVATE SECTOR PERSPECTIVES ON AEO PROGRAMME - MANAB MAJUMDAR

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1 APTFF 2015 CAPACITY BUILDING WORKSHOP ON IMPLEMENTING TRADE FACILITATION MEASURES OF THE WTO TRADE FACILITATION AGREEMENT (TFA) 22 OCTOBER WUHAN PRIVATE SECTOR PERSPECTIVES ON AEO PROGRAMME - MANAB MAJUMDAR

2 DISCLAIMER Views / Positions are personal Do not necessarily reflect those of my Organization

3 INTRODUCTION & BACKGROUND Indian AEO programme was developed as consistent with WCO SAFE Framework of Standards A pilot scheme was launched in August 2011 Full-fledged AEO programme rolled out in November 2012 As of end-september 2015, there are 30 companies / entities registered as AEO

4 ALL PLAYERS IN SUPPLY CHAIN CAN BE CERTIFIED There is no monetary or any other threshold limit for eligibility under the AEO programme It enables all players in the supply chain, including SMEs, to apply for certification

5 HOW TO APPLY FOR AEO STATUS An applicant for grant of AEO status should submit the following : Application for AEO Status Security plan Process map Site plan Self-Assessment Form Applicant must be established in India. It s necessary to provide evidence includíng : A certificate of registration Details of where staff is employed for making supplies of goods and/or services. Proof that the business has its own accounts

6 ELIGIBILITY CRITERIA FOR A BUSINESS ENTITY Established in India Systemic record maintenance Maintain approved security and safety standards Proven compliance with Customs & other laws Proven financial solvency AEO

7 BENEFITS OF AEO SCHEME FOR IMPORTERS Simplified Customs procedure and declarations For AEO importers, facilitation shall be higher than for ACP importers AEO importers to be given benefit of reduced bank guarantee amount of bank guarantee shall not exceed 5% of the bond amount

8 BENEFITS OF AEO SCHEME FOR EXPORTERS Simplified Customs procedure and declarations Reduced examination and inspection for AEO status exporter (from 10% to 5%) Examination reduced from 25% to 10% in AEO Export under Drawback / Reward Schemes For shipments to sensitive destinations, reduced examination of 20% consignments, as against 50% for other exporters

9 BENEFITS OF AEO SCHEME FOR LOGISTICS SERVICE PROVIDERS Waiver of Bank Guarantee in case of Transshipment of goods No need for case-by-case permission, for transit of goods Transit of goods without Customs escort

10 BENEFITS OF AEO SCHEME FOR CUSTODIANS / TERMINAL OPERATORS Waiver of Bank Guarantee required under Handling of Cargo in Customs Area Regulations 2009 Facility of extension of approval under regulation 10(2) of the Handling of Cargo in Customs Area Regulation 2009, for longer period of 10 years at a time

11 BENEFITS OF AEO SCHEME FOR CHAS & WAREHOUSE OPERATORS For Customs House Agents Extended validity period of licenses for AEO CHAs Renewal Fees exempt for AEO CHAs For Warehouse Operators Faster Approval for new warehouses Reduced Bank Guarantee of 5% of duty liability, for individual consignments of sensitive goods

12 PERSPECTIVE FROM INDIAN PRIVATE SECTOR : ADVNTAGES FOR BUSINESS Internationally recognized quality mark / certification Recognized as secure and reliable trading partner Helps in becoming part of regional / global production network / supply chain Benefits translating into saving of time, less complex process and reduction in cost

13 FEEDBACK FROM INDIAN PRIVATE SECTOR - 1 Overall, AEO programme is a positive development Effective tool for forging a robust Customs-to-Business Partnership, based on Trust Useful scheme towards developing a more Secured business eco-system. as an AEO-importer/exporter would look out for AEO certified business partners..... Leading to securing the complete supply chain activities

14 FEEDBACK FROM INDIAN PRIVATE SECTOR - 2 AEO programme is work under progress Suggestions for further improvement, to make the scheme more effective More capacity building workshops / promotional activities Greater use / application of IT / Digital Clearer articulation / specification of benefits including Additional For example, benefit of deferred payment of duties Qualification / Eligibility requirements need to be designed so as to factor in different operational aspects and business models

15 FEEDBACK FROM INDIAN PRIVATE SECTOR 3 MRAS Faster implementation of MRAs Indian business feels moving towards more MRAs would be critical Will ensure international acceptance of Indian AEO programme Currently operational MRA : Hong Kong, China Recently signed : South Korea Expected / Likely : USA, Turkey Particularly, MRAs with key trading partners will result in substantial benefits in terms of greater trade facilitation

USEFUL INFORMATION / DETAILS AEO Portal : http://dgicce.nic.in/dgicceaeo.

16 USEFUL INFORMATION / DETAILS AEO Portal : Relevant details available in Central Board of Excise & Customs (CBEC) Circular No. 28/2012-Customs, dated 16 November 2012

17 THANK YOU Your Comments / Suggestions are Most WELCOME Contact manab.majumdar@ficci.com and manab.ficci@gmail.com

B.Bhattacharya Principal Commissioner of Customs Mumbai 6 th April 2016

B.Bhattacharya Principal Commissioner of Customs Mumbai 6 th April 2016 Today, the Authorized Economic Operator Programme (AEO) is widely acknowledged as a key driver for a solid Customs-business partnership,