The CBIC issued Circular No. 18/2021-Customs dated July 31, 2021 w.r.t. amendment in Authorized Economic Operator (“AEO”) programme w.r.t. Auto-Renewal of AEO-T1 validity for continuous certification based on continuous compliance monitoring.
The Board has reviewed the AEO programme in the background of reported difficulties being faced by the AEO-T1 entities in renewal of their certification especially during the on-going pandemic.
As seen, the renewal of the AEO certification is governed by para 5.1 of Circular No. 33/2016-Customs dated July 22, 2016, as amended vide para 3(viii) of Circular No. 03/2018-Customs dated January 17, 2018. and paras 5.1 and 5.2 of Circular No. 33/2016-Customs dated July 22, 2016, as amended. When read together, these provisions provide that the validity of AEO certificate shall be three years for AEO-T1 and an AEO-T1 entity wishing to continue their MO status must submit an application for renewal 30 days in advance of the expiry of the validity of the certification. Further, the status of the AEO-T1 entities would be reviewed every three years.
Taking into account the reported difficulties faced by the AEO-T1 (including MSME AEO-T1) entities in seeking renewal and with a view to reduce their compliance burden, the Board has decided to allow the facility of continuous AEO certification/auto renewal for AEO-T1 entities. Thus, these entities would no longer be required to seek periodic renewal of their MO-T1 certification. The facility of continuous AEO certification/auto renewal for AEO-T1 entities is being made available subject to submission of annual self-declaration (enclosed) and review thereof. Such annual self-declaration is to be filed between 1st October to 31st December each year. All AEO-T1 entities certified on or after April 01, 2019 shall stand migrated to the auto renewal process with effect from August 01, 2021.
The zonal AEO Programme Manager that had approved the AEO-T1 certification shall take the annual self-declaration, as mentioned above, on record. However, in cases where any change in AEO-T1 compliance as per self-declaration is noticed or any adverse input is received from any field formation/investigation agency, the zonal AEO Programme Manager shall take suitable action in terms of Circular No. 33/2016-Customs dated July 22, 2016, as amended, under intimation (electronically) to such AEO-T1 entity as well as to the National AEO Programme Manager, Directorate of International Customs.
On the basis of the annual self-declaration, the concerned zone shall initiate a Comprehensive Compliance Review for the AEO-T1 entities (including MSME AEO-T1), as per para 5.4 of Circular No. 33/2016-Customs dated July 22, 2016, as amended, which is outlined as under:
a) The review shall be conducted on the basis of at least two annual self-declarations filed after issuance of AEO T1 certificate or from the date of last auto renewal of certification on account of successful review, whichever is later.
b) The review process has to be completed before the commencement of the due date for submission of the 3rd annual self-declaration (i.e. before 31st October) from the date of certification or from the date of last auto renewal of certification on account of successful review, whichever is later.
c) During the review process, the Zonal AEO Programme Manager may seek additional documents/information, if required for completion of the review process.
As the review process would rely on the two annual declaration bringing out the details for the last two financial years, for the AEO-T1 entities certified between April, 01 2019 and December 31, 2019, the AEO-T1 (including MSME AEO-T1) entity would be required to submit the details of the previous two financial years as their first annual self-declaration for the current year i.e. between October 01, 2021 and December 31, 2021. Similarly, the AEO- T1 entities (including MSME AEO-T1) certified between January 01, 2020 to December 31, 2020 would be required to submit the details of the previous two financial years as their first annual self-declaration for the next year i.e. between October 01, 2022 and December 31, 2022. Such annual declarations would be scrutinized by the zone concerned within 60 days i.e. by the end of February, 2022 and February, 2023 respectively. All other AEO-T1 (including MSME MO-T1) entities would be required to submit one annual self-declaration for previous financial year only, each year.
Based on the Comprehensive Compliance Review exercise done as per para 5 above, the concerned zone shall approve or revoke, as the case may be, continuous certification of the AEO-T1 entity and inform the National AEO Programme Manager, Directorate of International Customs. Only in case of adverse findings, the entity would be informed, for taking action as per Circular No. 33/2016-Customs dated July 22, 2016, as amended. Once revoked, a new MO-T1 (including MSME AEO-T1) certification would only be granted through fresh filing of application for AEO certification as per Circular No. 33/2016-Customs dated July 22, 2016, as amended, read with Circular No. 54/2020-Customs dated December 15, 2020 (for MSME AEO-T1).
The annual self-declaration for the AEO Auto Renewal process will be submitted by the applicant through the AEO online web portal <aeoindia.gov.in>. The necessary implementation to this effect is being carried out on the AEO web portal.
The AEO entities certified between 1st January to 31st December of each year shall be exempted from filing the annual declaration for that year. Accordingly, AEO-T1 entities certified on or after January 01, 2021 for the present year will not be required to submit annual self-declaration for the present year.
For ensuring continued compliance monitoring, all field formations of Customs and GST zones. DGRI and DGGI shall communicate any non-compliance noticed (SCN issued or proceeding launched for any offence) by an AEO status holder in terms of para 3.2 (legal compliance) of Circular 33/2016-Customs dated July 22, 2016, as amended, to the concerned AEO Customs zone and to National AEO Programme Manager, Directorate of International Customs on priority. The list of AEO status holders is updated every month on the CBIC website and is available at URI< https://www.cbic.gov.in/htdocs-cbec/home_links/india-aeo-prgm>.
The Circular No. 33/2016-Customs dated July 22, 2016, as amended, read with Circular No. 54/2020-Customs dated December 15, 2020 (for MSME AEO-T1), stands suitably modified to this effect.
Wide publicity may be given to this Circular by way of issuance of Facility Notice. Difficulties, if any, in the implementation of this Circular may be brought to the notice of this office.
The Circular can be accessed at: https://www.cbic.gov.in/resources//htdocs-cbec/customs/cs-circulars/cs-circulars-2021/Circular-No-18-2021.pdf