What Is AEO Certification & Could It Benefit Your Business?

Discover how to unlock your business’s competitive edge with AEO Certification.

Complex customs checks, lost freight, missed deadlines—for many, these challenges are an unavoidable part of the global trade landscape. However, there is a ray of hope for businesses hoping to streamline their shipping: AEO Certification. 

AEO stands for Authorised Economic Operator, a designation granted by customs authorities in the European Union (EU). A prestigious mark of quality, AEO Certification gives businesses a competitive advantage when exporting globally. 

There are many benefits to AEO certification: simplified customs procedures that whisk away some burdensome paperwork, expedited processing that slashes clearance times, and no need for expensive security guarantees that reduce your liquidity. So, what else do you need to know?

This blog will outline what AEO certification is, why it is important, the requirements you need to meet to become certified, and what benefits it can bring to your business.

What is AEO Certification?

In 2005, the World Customs Organisation (WCO) recognised the growth of global trade, increasing security threats, and drafted the WCO Framework of Standards to Secure and Facilitate global trade (SAFE). AEO is one of the main building blocks, looking to accredit operators that can prove high-quality internal processes that prevent goods from being tampered with in transport. 

Today, AEO certification is available to businesses involved in the international movement of goods, including importers, exporters, manufacturers, logistics providers, and customs agents. Companies must meet specific criteria related to customs compliance, financial solvency, security and safety standards, and record-keeping procedures. 

Once certified, trading businesses can benefit from various advantages, such as simplified customs procedures, reduced customs controls, and priority treatment in customs-related matters.

Why is AEO certification important?

AEO certification is not mandatory, though becoming certified acts as a signal of trust for your business. It demonstrates that your role within the international supply chain is secure and that your customs controls and procedures are efficient and compliant.

Since 2005 it has become a globally recognised status that is increasingly demanded by businesses, especially in the US and China. There are two types of AEO available:

Once granted, AEO certification is permanent, and certified companies must adhere to customs procedures continuously, including addressing malfunctions, undergoing inspections and monitoring audits at least once every three years, reporting significant company changes to the Regional Customs Service, and maintaining a trusted relationship throughout.

Who is eligible for AEO certification?

Today, AEO certification is available to businesses involved in the international movement of goods, including importers, exporters, manufacturers, logistics providers, and customs agents. 

To become AEO certified, businesses must meet certain requirements depending on the type of AEO certification they are applying for.

Types of AEO certification

There are two types of AEO certifications available:

AEO-C (Customs Simplifications)

The AEO-C certification is related to customs procedures and signifies the presence of internal quality management controls for customs compliance. 

This certification is typically gained by customs agents. 

AEO-S (Safety and Security)

AEO-S certification shows that a company is operating at the highest level of safety and security standards. With security standards of growing importance worldwide, becoming AEO-S certified can be particularly beneficial. 

This type of AEO certification is often used by logistics providers who are responsible for the transportation and storage of goods.

Requirements for AEO certification

Companies must meet specific criteria related to customs compliance, financial solvency, security and safety standards, and record-keeping procedures. 

There are slightly different requirements to meet depending on the type of AEO certification you are applying for. We have summarised these in the table below. 

What are the benefits of AEO certification?

Being AEO certified can offer your business a range of great benefits and give them a competitive edge. Some of the main benefits of AEO certification include: 

• Simplified customs procedures: faster transit times and less paperwork leads to shorter lead times, improved efficiency, cost savings, and a reduced administrative burden.

• Priority treatment: receiving priority treatment in the event of checks being made can result in faster processing and expediting the release of goods.

• Recognition as a trusted company: AEO certification indicates that you are a trusted company in international trade, helping you build strong relationships with customs officials worldwide and strike new business deals with partners.

Ultimately, becoming AEO certified can help you streamline processes, improve your efficiency, and build valuable relationships with third parties, all while reducing the administrative burden on you.

How to apply for AEO certification 

While AEO Certification is a straightforward process, it can be time-consuming. Submissions take between three to 12 months, with around 120 days allocated for assessment and site visits. Officials evaluate your finances, shipping procedures, compliance with customs requirements, quality management, and customs knowledge among staff. 

To apply for AEO status, you need to complete a C117 form (application for AEO status) and a C118 form. Your business will need:

• An appropriate record of compliance with customs requirements.
• A satisfactory system for managing commercial and transport records.
• Proven financial solvency.
• Appropriate security and safety standards.

Before submitting the AEO application, you must complete the following steps:

• Conduct a cost-benefit analysis.
• Obtain senior management buy-in and sign-off.
• Develop an AEO project plan.
• Perform a self-assessment.
• Identify any compliance gaps.
• Remediate any compliance gaps encountered.
• Document all relevant processes to a standard accepted by customs administrations.
• Conduct a readiness assessment.

After submission, you may need to answer follow-up questions from officials and prepare for an official audit. It's essential to design and implement a monitoring plan to ensure continuous adherence to AEO certification requirements in the future. Regular internal and external AEO status compliance reviews should also be conducted.

AEO Certification in other countries 

AEO programmes exist around the world, each with its own requirements and benefits. For example, The United States has the Customs-Trade Partnership Against Terrorism (CTPAT), Canada has the Partners in Protection (PIP), and Japan has its own AEO Programme. While core principles are similar, they do not automatically fall under a single umbrella organisation. However, the EU has implemented mutual recognition of AEO programmes with countries such as Norway, Switzerland, Japan, Moldova, the United States, China, and the UK.

Should you get AEO certified? 

Since the EU introduced the AEO Certification programme, the scheme has grown at pace. Many global companies now insist on AEO Certification as it simplifies procedures and ensures partners are taking shipping, communication, and security seriously. 

Whilst AEO certification is not mandatory, the benefits you gain and the increasing demand from global countries to prove your security and trustworthiness makes it something you should seriously consider applying for. 

Speak with a logistics expert today about AEO certification

SEKO Logistics is your trusted, AEO certified partner for eCommerce logistics, value-added freight forwarding solutions, and white glove and specialty delivery services. 

As logistics experts, we know obtaining AEO certification is a lengthy process. With an experienced partner like SEKO, you can fast-track AEO certification while keeping costs manageable. 

Contact us today to find out more about becoming an AEO trusted trader.