We present you innovations in the customs legislation regarding some issues of the functioning of authorized economic operators.
In October 2019, the eponymous law “On Amending the Customs Code of Ukraine regarding Some Issues of Functioning of Authorized Economic Operators (AEO)” was adopted, which entered into force on November 7, 2019.
The purpose of the adoption of this law is to introduce in Ukraine an AEO institute similar to that operating in the European Union, with the prospect of further mutual recognition, which is provided for in the Association Agreement between Ukraine and the European Union and is one of the main bases of customs cooperation. The AEO institute was introduced by the World Customs Organization in the year 2005 by adopting the Framework for Standards of Security and World Trade Facilitation. AEO programs have already been implemented in 83 countries and, according to the data of the European Union, more than 80% of all customs clearances is carried out by enterprises using the tools of the AEO program.
Let us consider in detail the practical aspect of the introduced changes for the business.
First of all, an authorized economic operator is a resident enterprise that plays any role in the international supply chain of goods (manufacturer, exporter, importer, customs representative, carrier, freight forwarder, warehouse holder) and has received appropriate authorization (status of an authorized economic operator). This status will allow going through customs formalities in a simplified mode.
The recognition of the status of national AEO by the European Union customs authorities will ensure their participation in the formation of a safe supply chain of goods and increase their competitiveness in foreign and domestic markets.
AEO authorization is free, valid indefinitely and is recognized throughout Ukraine.
The new law distinguishes the authorization of two types: AEO-S – on granting the right to apply special simplifications, AEO-B – on confirmation of safety and reliability. A company independently chooses the type of authorization and may have both types of authorization at the same time.
After obtaining AEO authorization, the head of the enterprise is issued an appropriate certificate, the form of which shall be approved by the Cabinet of Ministers of Ukraine within six months from the date the law enters into force. Also, the company will receive for free the permission for the use of special simplifications, the list of which depends on the type of authorization. Such permission shall be issued within 15 days after the submission of the relevant application.
Statements on obtaining authorization are entered into the AEO Unified State Register, after which the revenue and tax authorities systematically monitor the compliance of the enterprise with AEO criteria:
the compliance with the requirements of the customs legislation and tax legislation of Ukraine, as well as the lack of evidence of criminal prosecution;
the proper system of accounting, commercial and transport documentation;
the stable financial position;
the provision of practical standards of competence or professional qualifications of the responsible official of the company;
the compliance with safety and reliability standards.
Obtaining an AEO status by an enterprise is not mandatory, but it will allow to have significant advantages:
the acceleration of customs procedures (reduced risk level for customs clearance of goods; simplified declaration procedure);
the improvement of the service of providing customs services (the possibility of goods arriving immediately at the company’s warehouse, a warning about the physical inspection of the cargo);
the cost saving (reduction of delays at the border, reduction of the cost of customs terminal services).
However, some changes will not take effect immediately. In particular, the provisions regarding the general declaration of arrival will become effective 180 days after the entry into force of the law, and regarding the deadlines for submitting the declaration, after one year.
We will continue to monitor the implementation of this law and inform you of significant changes. If you have additional questions, please contact us.