Post on 15-Feb-2019
SIMON WHITAKERCOMMERCIAL HEAD OF SALES UK, IE & INTERNATIONAL MARKETS
Mobile : +44 7912 295702
Email :swhitaker@premierfarnell.com
ABOUT PREMIER FARNELL
Key Facts:
•FTSE 250 listed company
•£968Million revenue with operating profit of £93Million
•Operations in 35 different countries on all major continents
•Supplying over 150 global industry types
•Over 2 million customer contacts
•70% trade with us via on-line solutions
•4,400+ employees
•500,000+ electrical and electronic products stocked
•Same day despatch
•Global leader in legislation RoHS, WEEE, REACH
•Main European distribution based in Leeds, UK (1 of 11 globally)
A Premier Farnell Company
Authorised Economic Operator (AEO)An introduction to AEO
AEO – What is it?
• Authorised Economic Operator (AEO) is aimed at providing safety and
security into the Supply Chain.
• To become an AEO, Customs assess a wide range of company activities
(e.g. Finance, Site Security, Compliance, Goods In, Picking, Shipping
etc.)
• The main aim of AEO is to stop items that could be used for terrorism
getting into the supply chain. Conventional security controls focus on
stopping unauthorised goods leaving warehouses.
• AEO is linked to the Known Shipper programme that concentrates on Air
Safety to stop bombs etc being introduced into air cargo.
The Vision for AEO
• The European Union aim to get the majority of organisations who export
outside of the EU to sign up AEO.
• AEO is linked to a World Customs initiative to create chains of safe and
secure organisations around the world.
• The vision is to create world wide chains of Manufacturers, Distributors
and Shippers, where goods can be safely sent from a supplier in one
country to a customer in another.
AEO – What progress is being made across Europe?
• The AEO standard was introduced in 2008 and by October 2009, 1600 EU
companies have been accredited. The majority of these are Freight
Forwarders and Shippers.
• In the UK, 107 companies were AEO accredited and around 200 had
applied by October 2009.
• Customs takes about 3 months to complete the assessment, which will
include a site visit.
• Premier Farnell (UK) Ltd has made a full assessment of our strengths and
weaknesses against the AEO criteria prior to applying.
AEO – What difference will it make to us
• Customs benefits – As an AEO, we can expect our shipments to be
subject to less scrutiny and we will have to provide less data to Customs
on our shipments.
• Trust Agenda – Being a safe and secure operator will add to the trust we
earn with customers and suppliers.
• Future benefits are likely to accrue from changes to related EU legislation
that favour AEO’s.
AEO – What changes will there be in how we work?
• Some operational changes for AEO
– Wearing Badges
– Challenging anyone you don’t know
– More checks at the gatehouse
– Rejecting Suppliers who turn up unannounced
– Checks on infrequent despatch carriers
– Incident reporting on anything unusual
STATE OF THE NATION
• What’s in it for YOU?
• Substantial amount of business process / work
instruction development
• Benefits for IPR/OPR
• Goods stopped even with AEO approval
• Alternatives?
• Known Consignor Scheme
• Many of the same benefits as AEO
• Pre-requisites
• HR – Recruitment processes
• All staff through aviation training
• Controlled access to production areas
• Minimal cost (£200)
• 6 week application process
SIMON WHITAKERCOMMERCIAL HEAD OF SALES UK, IE & INTERNATIONAL MARKETS
Mobile : +44 7912 295702
Email :swhitaker@premierfarnell.com
Union Customs Code
AEO and it’s impact
A Presentation by Keith Robe
International Trade Development Liaison Officer (ITDLO) HM
Revenue & Customs
Protective marking – Unclassified
Authorised Economic Operator
AEO is EU’s response to WCO SAFE Framework
global standards for Security and Safety in the International Trade Supply Chain.
Protective marking – Unclassified
Authorised Economic Operator (AEO)
AEO is increasingly being seen as the standard operating
criteria for all customs operators and its criteria reaches
across the UCC
• It’s aimed at compliant and trustworthy businesses only…who we regard as low risk customers
• AEO is not a regime, it’s a status
• It’s an internationally recognised quality mark which indicates that a business operates within a secure supply chain and their internal controls and procedures are efficient and compliant
Protective marking – Unclassified
AEO – who can apply?
• Anyone involved in the international supply chain & carrying out customs related activities in the EC
• Includes logistics operators, carriers, freight forwarders and customs agents
• Normally must be EU established but
• Airlines/Shipping Companies not established in the EC may apply.
Protective marking – Unclassified
Applicants Responsibilities
• The applicant should ensure that they meet the criteria prior to applying for AEO.
• They should ensure that adequate resources are available to facilitate the audit process.
• Once a certificate is issued, they are responsible for informing HMRC of all factors arising that may influence it’s continuation.
Protective marking – Unclassified
Compliance…
we need to consider…
compliance over the past 3 years…
• any non-compliance is viewed in context
• size and complexity of the business
• type of irregularity
• serious or repeated infringements
• remedial actions taken
Protective marking – Unclassified
Records…
we need to check…
systems of managing records are satisfactory…
• systems facilitate audit-based customs controls
• can distinguish customs status of goods
• size and complexity of business taken into account
• internal controls in place
• process for reporting irregular or illegal transactions
Protective marking – Unclassified
Financial solvency…
we need to check…
a good financial standing sufficient to fulfil commitments…
• not been subject to insolvency proceedings
• financial history for past 3 years is good
• sufficient financial resources to meet liabilities
• has no negative assets except where it can be proved they can be covered
Protective marking – Unclassified
Security & Safety…
we need to check…
appropriate security and safety standards are met…
• focus on the integrity of the sites and building/s
• their access controls
• measures for handling goods, information and documentation
• their business partners
• screening of prospective employees
• security training and awareness
Protective marking – Unclassified
• Initially limited to streamlining authorisation process for simplifications etc.
• Enhanced reputation & image
The Union Customs Code (UCC)
Regulation (EU) 952/2013 30th October 2013
Trade benefits of AEO Customs Simplifications
Protective marking – Unclassified
Trade benefits of an AEO certificate
Benefits AEOC AEOS AEOF
a) Fewer physical and document-based
controls
���� ���� ����
b) Priority treatment of consignments if
selected for control
���� ���� ����
c) Choice of the place of controls ���� ���� ����
d) Easier admittance to customs
simplifications
���� ����
e) Reduced data set for summary
declarations
���� ����
f) Prior notification ���� ����
g) Mutual recognition ���� ����
Protective marking – Unclassified
Other benefits
• logistical systems - identify efficiency savings from review of procedures
• Recognised as secure and Improved corporate governance – development of
audit culture
• Improved management of business partners
• A more cohesive relationship forged with Customs
Protective marking – Unclassified
AEO – so what’s changing?
• Two types outlined in UCC:
• AEO standards linked throughout the UCC
• New criteria for practical standards of competence or
professional qualifications
• Provides many benefits including financial
• Scope expands to include taxation rules
Customs
Simplifications
Security &
Safety
Protective marking – Unclassified Union Customs Code | 05/08/2015 | 28
AEO interaction across UCC
Union Customs Code
• Duty deferment
guarantee reduction
• Movements within a
TS authorisation
between different MS
• Centralised
Clearance
• Self Assessment
• EIDR – presentation
waiver
AEO(c)
Mandatory
• Comprehensive guarantee
• Guarantee
reductions/waivers
• Simplified Customs
Declarations
• Entry in declarant’s
records
• Valuation simplifications
• Regular shipping services
• Temporary storage
• Authorised weigher
• Transit simplifications
• Special procedures
Certain AEO(c)
criteria must
be met
AEO(c)
MandatoryCertain AEO(c)
criteria must
be met
Protective marking – Unclassified
AEO update
UK –
628 applications received
Certificates issued = 373
• AEO(F) = 305
• AEO(C) = 57
• AEO(S) = 11
EU – (includes UK figs)
17,707 Applications received
Certificates issued = 13910
• Germany 6325
• Netherlands 1448
• France 1179
• Italy 916
• Poland 746
• Spain 629
• Sweden 321*Figures correct at May 2015
AEO database available on Europa website at
www.ec.europa.eu/taxation_customs/dds/cgi-
bin/aeoaeoquery?Lang=EN
Thank you
Keith Robe
International Trade Development Liaison Officer
BP4002
Chillingham House
Benton Park View
Newcastle Upon Tyne
NE98 1ZZ
Tel: 03000 556 961
Mob: 07899 061 748
keith.robe@hmrc.gsi.gov.uk
AEO – Trade Compliance
July 30 2015
Authorized Economic Operator (AEO)
� AEO legislation – Voluntary – 2007 / 2008
� In simple terms required that:
� Traders evidenced compliance with existing EU Customs legislation, and� Across their supply chains� Generally through written procedures addressing specific questions� Evidencing compliance with mandatory, existing EU Customs (security export control)
legislation� Customs Assumption – Traders already complying with existing laws
� Is this fully documented ?� Raised the standard for demonstrable compliance (and real compliance practice)� Customs auditing / verification is simpler
� Union Customs Code (1st May, 2016):
� Numerous changes� AEO – Mandatory guarantee requirement for all non AEO traders wishing to use
customs processes such as PCC, IPR, Customs Warehousing, End Use, etc.– Guarantee level for non AEO’s equal to what would normally be saved...– AEO – partial exemption / exempt...
� Professional Standards for employees� All business taxation review – not just EU Customs
32
Driving Behaviour...� HMRC approvals/renewals of saving programs delayed – examples have seen up to 6
months and increasing
� Anticipate initial submission returned – time period starts again / plan...
� Gain AEO and fail audit – non – compliant – can’t re-apply for 3 yrs
� HMRC expect AEO (c) Standard now – not when UCC is law in May 2016
� Client realization of fiscal implications and potential for delay
� AEO still about benefits – Think about continued improvement & management. Control of audits.
� Client recognition of level of complexity in customs, security, export control legislation and requirement for experienced personnel / professional competency
� Part of UCC
� Client sourcing supply chain partners that can provide:� AEO status
� AEO support for Client to achieve
� Professional competency in the subject matter
� Commitment to engage
� Consistency in supply chain / long term support / maintain AEO credibility for HMRC33
Kuehne + Nagel – Confidential Page 34
Functional Roles and Trade Compliance
35Functional Roles and Trade Compliance
Awareness Subject Areas� Trade Compliance Requirements in Functional Roles
� Functions – All
� Incoterms
� Functions – Engineering, Product Mgrs, Purchasing, Sales, Contracts, Operations, Supply Chain, Logistics, Legal
� Import / Export Classification
� Functions – Engineering, Product Mgrs, Purchasing, Sales, Contracts, Operations, Supply Chain, Logistics,
� Customs Valuation
� Functions – Purchasing, Contracts, Operations, Supply Chain, Logistics
� Country of Origin and Origin Marking for Customs
� Functions – Engineering, Product Mgrs, Purchasing, Sales, Contracts, Operations, Supply Chain, Logistics,
� End-Use & End-User Identification
� Functions – Purchasing, Sakes, Contracts, Operations, Legal
� Restricted Party Screening
� Functions – Purchasing, Sales, Contracts, Operations, Supply Chain, Logistics, Finance, HR, Legal
� Sanctions & Embargoes
� Functions – All
� Restrictive Trade Practices or Boycotts
� Functions – Purchasing, Sales, Contracts, Operations, Supply Chain, Logistics, Finance, Legal
� International Trade Transaction Recordkeeping
� Functions – Purchasing, Sales, Contracts, Operations, Supply Chain, Logistics, Finance, Legal
36
International Trade Compliance – Suite of Services
� KN Healthcheck
� An in-depth review of the client’s activity focusing on
processes and compliance , to mitigate risk
� From discussions in-house with the client key stakeholders
the KN Healthcheck delivers an expansive report for action.
� The report sets out a timetable with timelines that allows
the client to demonstrate progress.
� The KN Healthcheck provides KN support where our
services can provide further assistance, such as training,
process delivery.
� Provides full business compliance awareness
� Classification of Items � Required to determine admissibility, duty rate, preference
program eligibility and licensing requirements
� Import items must be classified according to the Harmonized
Tariff System (HTS or HS)
� Export classification applies in numerous jurisdictions to
military and dual use items
� KN Footprint � A single slide view of the client’s compliance world.
� Based on client information
� Recognises risk and how to control & improve.
� Can be provided for multi site clients
� Offers evidence of how a client plans to develop markets &
opportunity within compliant processes
� Market Entry Information.
� Designed to provide market information at the earliest point to
ensure smooth progress in transit
� Ensures duties, taxes and documentation requirements are
known in advance
� Action plan to meet local challenges avoid delay & cost
� AEO Gap Analysis
� Supports clients with Customs processing benefits (Duty & tax
relief)
� Provides detailed report on HMRC AEO self assessment
questionnaire with gap analysis risk assessed feedback
� Offers support through the accreditation process
� Customs Processing Application Support
� KN will provide help & support to ensure application for Customs
processing reliefs is completed in line with timelines.
� Training
� Provision of training support on all compliance aspects
� KN Processes
� The ability to provide proven business processes to help
manage the client’s business.
• KN Retention
� KN is able to provide a hot-line support service for clients who
need professional assistance on transactions & regulations
37Trade Compliance
AEO – Trade ComplianceThank you.
July 2015