Uncertainty regarding Authorised Economic Operators (AEO)
There has been lots of recent discussion and publications regarding Brexit. A recent EU view regarding Brexit is that there is going to be numerous impacts on cross border trade and in particular those with AEO status. The view is that this will happen after the transitional arrangements and when the UK is deemed to have committed to a hard Brexit.
What is an AEO?
An AEO is an internationally recognised quality mark. It indicates that your role in the international supply chain is secure and that your customs controls and procedures are efficient and compliant. It gives quicker access to certain simplified customs procedures and, in some cases, the right to ‘fast-track’ your shipments through some customs and safety and security procedures.
Whilst Brexit negotiations have been continuing, it was widely thought that AEO status would continue after Brexit. It was thought to be a good idea for many businesses to gain the status to help at the ports post Brexit. However, that position has been clouded by the Directorate General for Tax and Customs paper on Withdrawal of the United Kingdom and EU rules in the field of Customs and Indirect Taxation.
Withdrawal of the United Kingdom and EU rules in the field of Customs and Indirect Taxation.
The paper states:
‘Authorisations granting the status of Authorised Economic Operator (AEO) and other authorisations for customs simplifications, issued by the customs authorities of the United Kingdom will no longer be valid in the customs territory of the Union.’
This appears to show that the view from Brussels is that AEO status granted by the UK will not be recognised post Brexit. This could mean that UK companies could lose all their benefits associated with the status. Analysis following this EU publication has also been uncertain as to how this will be reflected within a Brexit deal but it is an important point to think about, especially for businesses who wish to pursue the quality mark.
Due to the uncertainty of Brexit, the impacts following a hard and soft Brexit may change.
For further information, please contact our VAT specialist, Nigel Smith.