Find out about the benefits of Authorised Economic Operator (AEO) status, who can be an AEO and how to apply.
What AEO is
AEO status is an internationally recognised quality mark that shows:
- your role in the international supply chain is secure
- your customs controls and procedures are efficient and meet EU standards
It’s not mandatory, but gives quicker access to some simplified customs procedures and, in some cases, the right to ‘fast-track’ your shipments through some customs and safety and security procedures.
Who AEO status is for
AEO status is for businesses that:
- are a legal entity
- are established in the territory of one of the 28 member states of the EU
- are actively involved in customs operations and international trade
- have an Economic Operator Registration and Identification (EORI) number
Anyone involved in the international supply chain that carries out customs related activities in the EU can apply for AEO status, regardless of the size of their business.
- freight forwarders
- warehouse keepers
- customs agents
- others (for example, port operators, secure freight parking operatives and airline loaders)
Read Notice 117 for more details about where the international supply chain is considered to start and end for AEOs.
Types of AEO authorisation and their benefits
You can apply for AEO status customs simplification (AEOC), AEO status security and safety (AEOS), or both.
If you hold AEOC status, you could benefit from:
- a faster application process for customs simplifications and authorisations
- reductions or waivers of comprehensive guarantees
You’ll need to be a holder of an AEOC if you want to qualify for:
- moving goods in temporary storage between different member states
- a notification waiver when making an entry in a declarant’s records
- a 70% reduction in a business’s deferment account guarantee
- undertaking centralised clearance (when available)
- completing self assessment (when implemented)
If you hold AEOS status you’ll benefit from:
- a lower risk score - used to decide the how often customs carry out physical and documentary checks
- consignments being fast-tracked through customs control
- reduced requirements for the mandatory pre-arrival and pre-departure Entry Summary Declarations or Exit Summary Declarations
- reciprocal arrangements and mutual recognition with countries outside the EU (for example, USA or trading partners that adopt the World Customs Organisation safe framework)
Recognition of AEO in other countries
If your business has AEO status in one member state, that status is recognised across the EU.
If you have AEOS status you can benefit from arrangements under Mutual Recognition Agreements (MRAs). MRAs are negotiated by the EU with third country customs authorities. Normally the benefits will be similar to those for AEO, for example:
- faster clearance at the frontier
- less interventions
- lower risk scores
The EU has MRAs with:
- Norway (for security declarations only)
- Switzerland (for security declarations only)
Negotiations with Canada will be completed soon.
Before you apply for AEO status
Before you apply for AEOC or AEOS you must have an EORI number and must make sure your business:
For AEOC status, your business must also have practical competence or professional qualification in place.
Your business must have security standards in place to get AEOS status.
HMRC will check your record of compliance with customs and tax requirements for your business over the last 3 years, or use the latest available information if you’ve been established for less than that time.
We’ll also look at whether serious or repeated infringements of customs rules have been committed by:
- your business
- the people managing your business
- the people in your business responsible for customs matters
- your legal representative for customs matters
To get AEOC or AEOS status you’ll need to show that:
- you have procedures in place to identify and disclose any irregularities or errors to HMRC
- you’ve taken appropriate action for any irregularities identified
- you have satisfactory procedures for handling controlled goods such as:
- military goods or technology
- dual-use goods
- excise or Common Agricultural Policy goods
- dangerous goods or hazardous materials
- you have procedures in place to tell HMRC about any changes in your customs business activities
Find out more about the standards of compliance for AEOs in Notice 117.
Records you must keep
HMRC need to be satisfied that you’ve an acceptable system of managing commercial and, where appropriate, transport records. To get AEOC or AEOS status you’ll need to have:
- methods to allow HMRC access to your customs records
- an appropriate logistical system
- an appropriate level of administrative organisation
- documented procedures to control and manage the flow of goods
- internal controls in place to detect illegal or irregular transactions
- procedures in place to handle certain licences and authorisations
- archival and retrieval procedures in place
- trained staff to inform HMRC if systems errors are discovered
- procedures for verifying the accuracy of customs declarations submitted on your behalf by third parties, if appropriate
- information technology security measures in place
- a well maintained accounting system with a full audit trail
Find more about the standards for record keeping by AEOs in Notice 117.
You have to prove you’ve been financially solvent for 3 years before your AEOC or AEOS application is submitted, and that you have the ability to meet your financial commitments both to HMRC and other creditors.
HMRC will expect your net current assets to be positive, but will take into account any special circumstances that mean it’s normal for your company to have negative net assets.
Find more about the necessary standards for solvency of AEOs in Notice 117.
Practical competence or professional qualification
Professional qualifications and practical standards of competence directly related to customs activities were introduced by the Union Customs Code on 1 May 2016.
As the UK does not have any recognised customs qualifications, you must be able to demonstrate and give evidence of practical competence for the previous 3 years before you make your AEOC application.
Depending on the size and type of your business, the person that needs to be competent could be the person making the AEO application, or the person in charge of the customs matters. For example, where the work is outsourced to one or more business partners they must be competent to carry out that role or hold an AEOC authorisation.
You’ll need to give evidence of the roles, responsibilities and competences and how these are maintained.
HMRC will look at what you’ve put in place to protect your business and its supply chain against potential risks if you apply for AEOS status. You’ll need to:
- have a safety and security risk assessment in place
- have secured external boundaries with documented procedures to control access to your premises
- have measures in place to protect your cargo units and to prevent unauthorised access to shipping areas, loading docks and cargo areas
- use procedures to secure the safety of your goods during storage, manufacture and transport agree appropriate safety and security measures with your suppliers
- carry out security screening and procedures for prospective employees and contracted parties train your staff in the security and safety requirements
- contracts for temporary personnel
- details of owners of cargo units
- all outsourcing contracts (including cleaning, security, maintenance and any others)
HR requirements for security and safety
The standard requirement for regulated agent or known consignor status is an employment history for the last 5 years.
Although this is not a legal requirement for AEO, HMRC expect you to have a recruitment policy that’s robust and stands up to scrutiny. You should have a minimum of a 3 year pre-employment check in place.
You should make sure that employees in security sensitive positions or high risk areas have received appropriate security screening. If you use an agency for recruitment purposes you must make sure that the background checks are being carried out on your behalf, including any additional company requirements.
Find out more about the necessary security standards for AEOs in Notice 117.
You can use the security declaration as evidence of control between your business and business partners.
How to apply for AEO status
To get AEO authorisation, you must complete:
- form C117 giving basic information about your business
- form C118 giving detailed information about your business activities
You’ll need to have evidence of your processes and procedures to support your application and meet the AEO criteria. Keep them for the HMRC audit visit. You should also make sure that all key personnel are available for HMRC AEO visits.
Your AEO application must be submitted by a responsible person in your business (for example a partner or director). The proprietor must submit the application for sole traders.
If the application is made by someone else, they must be sanctioned by a responsible person of the business.
Send your completed the C117 and C118 forms together to email: AEOapplications@hmrc.gsi.gov.uk.
Email is not a secure method for sending sensitive data or documents. HMRC cannot guarantee that emails will not be intercepted and read by other people.
Your application will be rejected if it is incomplete.
Applications from groups of companies
You have to submit separate applications for each legal entity if you’re a group of companies.
You only need send to in one form C118 form with an application form for each legal entity if you’ve common corporate standards and customs procedures. However, if you submit a separate C118 for each legal entity you can speed up the application process.
Each legal entity will receive their own authorisation number.
Businesses that operate in other EU member states
If you operate in other EU member states as well as the UK, your application must cover all your business activities in every country.
However, if that operation is a separate legal entity, you need to apply for AEO status in that member state using their forms.
Applications from the Isle of Man and Channel Islands
If you’re in the Isle of Man or Channel Islands send your application to:
HMRC AEO Central Site
Fitz Roy House
Castle Meadow Road
Acceptance checks will be carried out by HMRC, and any audits will be completed by either Isle of Man, Jersey or Guernsey customs.
How your AEO application will be reviewed
When HMRC receives your application, you’ll be sent an acknowledgement.
You’ll be sent a notice of acceptance if your application is complete and satisfactory. HMRC will then arrange to visit you to check your documentation.
HMRC audit visit to your business
You must make sure all the documentation mentioned in your questionnaire and explanatory notes are available for the visit, along with the necessary documented procedures.
After HMRC visit your business
If you meet the AEO criteria you’ll receive your authorisation within 120 calendar days. It will take effect on the fifth working day after the date it’s issued. The time limit can be extended by you or HMRC to deal with any problems.
HMRC must consult with other EU member states if your application has business connections in those countries, we have 80 days to complete the consultation from the date we receive your application.
Non-acceptance, rejection and withdrawal of your application
Your application will be rejected if either:
- you or your legal representative for customs has been convicted of serious criminal offences
- you’re subject to bankruptcy proceedings
Your application will also be rejected if you do not meet all the AEO criteria. You can withdraw your application at any time if you need more time to meet the criteria. If your application is rejected, or you withdraw it yourself, you can re-apply when you meet the criteria.
If you cannot meet the AEO criteria you’ll be given time to get things right. Your application will be refused if you cannot do this within the time limit HMRC allows.
HMRC will contact you if your application is incomplete, or return it to you.
If your application is not accepted
You can request a review or appeal if your application is rejected. Details will be included in the letter you get from HMRC advising you your application has been rejected.
How to keep your AEO status
To keep your authorisation or status, you must continue to meet the criteria already mentioned in this guidance. You should notify HMRC of specified material changes to your:
Your authorisation will be reviewed and can be suspended or revoked if you do not. If it’s suspended, you’ll be given a chance to put things right.
If your authorisation is revoked you’ll have to wait 3 years before re-applying.
Find out more about maintaining your AEO status in Notice 117.
Data protection and exchange of information
Under data protection, holders of an AEO authorisation need to give permission for some limited data to be shared with third country customs authorities. This will allow their AEO status in the EU to be recognised and benefits applied.
The C118 form asks new applicants to give their consent to publication and exchange of AEO data.
Exchange of information between HMRC and the Civil Aviation Authority (CAA) for AEOS
EU legislation requires member states customs authorities and national authorities responsible for civil aviation security to exchange information on the status of AEOS authorisation holders and regulated agents or known consignors.
The legislation asks for the exchange of:
- the name of the holder
- any amendment to the authorisation
- any revocation or suspension and the reason
- any re-assessments of the authorisation and the results
The information is only used by the CAA for the regulated agent or known consignor programmes and the organisation is responsible for data security.
Get help and more information
EU AEO database
Use the EU AEO database to check:
- who holds an AEO status
- what type it is
- the date and country of issue
You can find out more about AEO:
- in Notice 117: Authorised Economic Operator
- on the European Commission website
- on the World Customs Organization website
The European Commission website has e-learning:
Get help from HMRC
Contact HMRC if you have any questions about AEO (including how to apply) by:
- telephone: 03000 564 556
- email: AEOapplications@hmrc.gsi.gov.uk
Contact the HMRC imports and exports helpline for trade support and VAT enquiries.