What is AEO?
Authorized Economic Operator or AEO is a term used to refer to supply chain security programs which are governed by European Community law. The European Union created AEO regulations as a legal basis to the “Community Customs Code” (CCC) and its implementing provisions.
Under the Article 39 of the Union Customs Code, AEO status can be achieved by meeting the following criteria:
- Record keeping
- Professional qualifications and practical standards of competence
Comparison between AEO and C-TPAT
Customs – Trade Partnership Against Terrorism or C-TPAT is a voluntary, joint government-business partnership to help add to supply chain security a well as increase border security.
While AEO and C-TPAT are both voluntary safety programs with similar goals, the main difference is AEO covers both imports and exports while C-TPAT is an import only safety program. These programs also have different security measures however each can be met by implementing SAP Global Trade Services.
AEO Compliance with SAP GTS
Implementing SAP GTS will help business operators meet compliance and record keeping standards for AEO status for customs simplification (AEOC), AEO status for security and safety (AEOS) or both. SAP GTS helps achieve compliance in the following ways:
- Procedures are in place to identify and disclose irregularities or errors to customs authority in timely manner
- Records appropriate remedial action taken for irregularities or errors
- System driven procedures and process in place for handling controlled goods such as:
- Military goods or technology
- Dual-use goods
- Excise or Common Agricultural Policy goods
- Dangerous goods or hazardous materials
Basic Rules for Record Keeping
SAP GTS helps with record keeping by performing checks with customs authorities. Below are basic rules for record keeping with the help of SAP GTS:
- Maintain records of imports and exports that are retrievable in the future
- Integrated process to control and manage the flow of goods
- Automatic controls in place to detect and block illegal or irregular transactions
- Systems in place to handle licenses and authorisations
- Approved archival and retrieval procedures in place
- Automatic verification of accuracy of customs declarations submitted
- SAP IT security measures
- Standard integration with ERP with a full audit trail of the supply chain
While each has it’s advantages, AEOS permits easier admittance to customs simplifications and fewer physical and document-based controls.