Authorised economic operator status, a game changer for customs clearance activities

An AEO is a designated individual, business entity or a company that is involved in international trade (imports and exports) and is duly authorized by the Commissioner for Customs and Excise to transact business with customs under a special treatment. The emphasis here should be placed on the special treatments. The global supply chain is prone to, among other challenges, increased costs of operations, penalties for non-compliance, and difficulties in budgeting and financing operations. Of course, some of these challenges are justifiable; customs administrations in developing countries have been sensitive in trying to get rid of leakages that would lead to loss of revenue or compromise public health and national security. In doing so, the administrations may resort to excessive customs scrutiny especially on clearance and movement of goods under customs control. The World Trade Organisation (WTO) has been working tirelessly to make sure that customs across the world facilitate trade. To secure commitment of nations on trade facilitation, WTO drafted a protocol to the WTO Agreement (Marrakech Agreement). After its entry into force in 2017, the protocol secured substantial number of ratifications by nations across the world. Of course, the United Republic of Tanzania is one of them, having deposited instrument of acceptance to the protocol on 8th April 2020.

The AEO status will entitle the holder the following benefits; speedy clearance of customs declarations, minimal customs inspection of the goods at entry points, rapid release time, single customs declaration for all imports or exports in a given period, clearance of goods at the owners’ premises especially where the AEO imports a huge volume of goods or where nature of imported goods require verification at the owner’s premises, guaranteed renewal of customs licenses, reduced customs control (there would be no need to employ electronic tracking devices to monitor movement of goods under customs control) and self-management of bonded warehouse facilities. Have you thought of good reputation for AEO as a reward? Yes, it is. Being branded as AEO means you are trustworthy, reliable, and honest. The Customs and Excise department has pledged to relax all strict customs formalities in favour of AEOs, believing that there would be no leakage of revenue or threat to national security. This is one intangible benefit. It is a high time now business should grab this opportunity guaranteed by the customs to ease challenges associated with customs operations.

Authorised economic operator status, a game changer for customs clearance activities

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