Why have you not applied for AEO Status

With October 31st approaching rapidly, any company importing goods into, out of, or through the UK should have considered, applied for, or received AEO status at this stage. For those of you who have been tardy on this front, I suggest you start applying for your own AEO Status now or find a good freight forwarder who has it already. Any business entity who is involved in the supply chain that undertakes customs-related activities, irrespective of size, can apply for AEO status. AEO is recognised Internationally as a mark of quality; an AEO status effectively demonstrates that your role within the international supply chain is secure, and that your customs controls and procedures are efficient and compliant.( https://www.export.org.uk). The difficulty for companies who will just begin carrying out customs-related activities post-Brexit is that probably the most important criterion for achieving AEO status is to have a good track record with Customs, but how can your relationship be good if you haven’t even had one up until now! Inevitably, this prevents you from even applying for AEO status at this stage. This is why I would highly recommend you find a freight forwarder who has AEO Status as a matter of urgency.

Companies with AEO Status in Ireland

Figure 1 Companies with AEO Status in Ireland

 

Figures taken from the Customs Union Website (Figure 1) show that there has been a rapid increase in companies applying for AEO status in the past year with 76 certified in 2019, more than triple the number of AEOs certified in Ireland in 2018. More than two years ago Robert Keen, BIFA Director General, said: “It has long been BIFA’s belief that acquiring AEO status is about setting yourself apart from the competition. The process of become AEO certified itself gives a forwarder the chance to analyse processes, examine standards and identify corporate or organisational weaknesses. In turn, once issues have been resolved, AEO certification means that the freight forwarder’s clients have that certainty that their logistics partner has surpassed tight benchmarks in regard to standards of operation’’. (www.BIFA.org ) The dramatic jump in AEO figures is an obvious reaction  to Brexit so we can only imagine what the response to an actual Brexit will be. I would consider it a serious mistake to leave it until after Brexit to apply for AEO certification. Custom officials are already under severe pressure  in, inter alia,  processing AEO applications and the work load post-Brexit is bound to increase exponentially.

This figure of 76 AEO-certified companies is insignificant when considered as a percentage of the overall number of companies moving goods into, out of, or through the UK. The IMDO stated in the ‘IMDO The Implications of Brexit on the Use of the Landbridge Report’ that 83% of traffic through Irish ports is using the UK as a land bridge. In 2016, the Central Statistics office determined that 26,317 enterprises in Ireland imported goods from the UK in 2016, representing 85% of the total number of importing firms and approximately 8,600 enterprises exported goods from Ireland in 2016 and 79% of these exported to the UK. So, my question is what are the other 99% of enterprises doing to prepare for the backlash of delays which will inevitably arise as a result of Brexit?

Imports and Exports Ireland & UK CSO October 2018

Figure 2 Imports and Exports Ireland & UK CSO October 2018

 

International Forwarding, the logistics company stated the following ‘With little clarity and a lot of uncertainty around post-Brexit logistics, there are some steps we recommend customers take to protect their supply chain. One is to look for exporters, importers, freight forwarders and customs brokers with Authorised Economic Operator (AEO) status. We think AEO status will give companies a head start in trade facilitation during the post-Brexit transition period.’ (https://internationalforwarding.co.uk/2019/08/brexit-ifl-guide-for-freight-logistics-customers/). An Article on ‘PrepareforBrexit.com by Roisin Carroll states ‘The UK has long been the most important market for the Irish farm and food sector. With Brexit, while diversification is important, it is still vital Irish companies can ensure fast, steady delivery into Britain. One method to help minimise customs delays is authorised economic operator (AEO) certification. While not the solution for every company, it can provide some real benefits.’

Ireland's current link on the European TEN-T network (European Commission 2018).png

Figure 3 Ireland’s current link on the European TEN-T network (European Commission 2018)

 

Being an AEO certified company confers on the company a Trusted Trader status meaning customs officials have been to your site, examined your facilities, and reviewed your systems and processes. Resultant from this AEO status means there is a strong possibility of goods being fast tracked through ports for Operators who have AEO, and why not! – you have opened your operations to customs officials and proved you have nothing to hide only a high quality, secure, safe and efficient import and export service! So, you need to react rapidly – either get your own management system in place and apply for AEO status or find an AEO-certified Freight Forwarder who has it already. After October 31st this is going to become a much more difficult task!

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