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AEO status a "must-have" to ensure frictionless borders, says CILT

Chief Executive | Chartered Institute of Logistics and Transport

CILT represents the expertise and experience of professionals and leaders in the logistics and transport sector – a key element of our economy and UK trade around the globe. For some time now, we have been involved in discussions with Her Majesty’s Revenue and Customs (HMRC) and The Department for Transport (DfT) to deliver impartial advice and offer solutions to the opportunities that will arise from Brexit.

Following the vote for Brexit last summer, the profession has been in a period of continued uncertainty, but we must all be aware of the many opportunities that can arise from Brexit. As a profession, we need to be ready and able to seize them and add value.

CILT recommends setting a goal of ‘frictionless’ border control, whilst encouraging and supporting the private sector to evaluate and think about new trading patterns and supply chains. CILT has been working tirelessly to present to HMRC, through its membership of the Joint Customs Consultative Committee (JCCC), guidance regarding the practical implementation of a frictionless border for goods to the EU27 and the rest of the world.

Clearly, security at all border crossings is of vital importance, but how this is managed is also critical to commerce. A 21st-century solution is required if goods and vehicles are going to flow smoothly. In order to achieve this goal, CILT is championing AEO certification to aid members to gain a competitive advantage, recognition for professional competence and trouble free border crossings.

The AEO scheme is a global concept promoted by the World Customs Organisation and in the process of being adopted by all 174 member countries. AEO status is an internationally recognised quality mark indicating that your role in the international supply chain is secure, and that your customs controls and procedures are efficient and compliant. Alarmingly, only 568 companies in the UK currently hold AEO status.

To become AEO certified, companies must meet criteria that show they have suitable processes and procedures in place and are self-policing. Companies can qualify for AEO(S) (security and safety in the supply chain) and/or AEO(C) (customs compliance), whichever they feel is appropriate to their business.

AEO status is open to any company directly or indirectly involved in the international supply chain, however large or small. Holders of AEO(C) will be permitted to use customs procedures and processes that are not available to other companies, such as self-assessment. These processes are intended to remove customs work from the border and to smooth the passage of goods across borders.

CILT has noted a rise in the question ‘Do you hold AEO status?’ being first on the list for preferred supplier listing and tenders, and we are now urging our members, Government and the profession to wake up to the advantage of being an AEO.

The first myth to dispel is that AEO is only for those engaged in customs work. This is not true. AEO’s primary focus is safety and security in the supply chain and is therefore intended for any company across the entire supply chain operation.

AEO is open to all kinds of organisations, including freight agents, customs brokers, logistics providers, transport companies, owner drivers, warehouse keepers, ports, airports, container yards, vehicle transit parking, exporters and importers. For maximum benefit, all companies in the supply chain, including the importer or exporter, need to hold AEO certification.

The focus of CILT’s position on behalf of its members to the UK Government is very much about keeping trade flowing across our borders post-Brexit. We believe that AEO status should give companies that have demonstrated their commitment to security in the supply chain access to what would in effect be a green lane through UK ports and airports.

Of course, if the UK is no longer a member of the EU Single Market and the EU Customs Union, post-Brexit, all shipments outside the UK will be considered international, including those to and from the EU27. CILT is pressing for current AEO certifications to continue to be recognised post-Brexit and for a new UK scheme to be created very soon afterwards.

We are now encouraging that companies press forward and attain AEO status before Brexit, so that they can take advantage of benefits available now and also be best placed to gain benefits post-Brexit. Holding this status is going to be key to experiencing the frictionless border or green channel that industry wants and needs, in whatever shape that is available post-Brexit. Only AEOs will be trusted to be self-policing and sufficiently knowledgeable to be granted such ease of movement. Non-AEOs will undoubtedly get left behind and disadvantaged.

CILT is raising awareness of the absolute necessity of AEO status and will be holding a series of workshops to allow its members to further understand the need for their organisations to achieve AEO status. The route to becoming an AEO certified operator is an extensive and detailed process, with approximately 95 per cent of AEO applications failing; this means, that assistance during the process is vital and we CILT will offer support, training and guidance to help operators through the rigorous AEO application.

The application process takes months not weeks and companies do need to prepare prior to submitting their applications. Now is the time to get started. Those that have not yet chosen to be certified should be giving it serious consideration. AEO is available to companies of all types and sizes that are involved in an international supply chain.

There will be further announcements from the Institute in the coming months offering support, training and guidance for members in applying for, preparing for and attaining this must-have AEO status.

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