As we all know, the Union Customs Code (UCC) changes are going into effect on May 1, 2016. We at Tradewin have had our ears to the ground waiting for the latest updates on these changes and how they may affect customs programs and procedures, such as Authorized Economic Operator (AEO) status.

From what we have learned, the UCC will have a big effect on EU traders.  

Under the new UCC, AEO licensing and the Binding Tariff Information process will be among the first changes implemented.

AEO is changing from a certification to a license. The UCC will be phasing out the Authorized Economic Operator Full (AEO-F) certification that combines customs formalities, safety and security over the upcoming years. Traders will now have to apply for the AEO-C license for customs simplifications and the AEO-S license for safety and security separately. Companies can apply for AEO status covering one Economic Operator (EORI) number and this status will be recognized within the EU.

The UCC also adjusts the AEO approval process to include new conditions covering professional competency for personnel involved on customs matters. These company personnel are required to have at least 3 years’ experience in customs matters and specific customs training.

For the AEO-C license, the main benefits are: 

• A 70% reduction in a business’s deferment account guarantee
• Centralized clearance, when available
• Self-assessment, when available
• Gateway to obtain customs simplifications
  • Inward processing relief
  • Outward processing relief
  • Customs warehousing
  • Simplified entry programs
  • Reduced Guarantees for all of the above

For the AEO-S license, the main benefits are:

• Lower risk score determining frequency of customs physical and documentary checks.
• Consignments fast-tracked through customs control
• Reduced requirements for mandatory pre-arrival/pre-departure entry summary declarations or exit summary declarations
• Reciprocal arrangements and mutual recognition with countries outside the EU (ex. USA, Canada) that adopt the World Customs Organization SAFE Framework

For any company who currently holds one or more Customs licenses, it will be beneficial to apply for the AEO-C license. With the new UCC regulations, customs would need to evaluate every license for simplified procedures against the AEO requirements. When the AEO license has been implemented it minimizes the interaction with Customs to the annual self-assessment.

In the following weeks, we will be publishing more in-depth blogs on the following updated UCC changes and how they will be affecting the Binding Tariff information (BTI’s), royalties and Customs Value.

Buckle your seatbelts and stay tuned for more updates.

If you would like to learn more about these changes in the meantime, do not hesitate to reach out to Tradewin!