The speed of global trade increases demands for compliance, security, and efficiency. Compliance of the company with these regulations is testified by the AEO T2 Certificate. AEO T2 accreditation can substantially simplify operations and enhance the global reputation for Indian importers & exporters.
What is an AEO T2 Certificate?
Definition and Overview
AEO T2 Certificate is a medium-level accreditation of the Indian Customs’ AEO scheme, formulated to identify organizations that have higher standards of compliance with customs regulations, financial prudence, and security measures. The certification gives various advantages to make customs handling easier and faster.
Why It Is Critical to Indian Importers and Exporters
AEO T2 accreditation is an indicator of dependability and trustworthiness for businesses involved in global trade. Besides ensuring faster customs clearance, it makes the company a preferred supplier in the global value chain, paving the way for new partnerships and relations.
AEO T1, T2, and T3 Certificate Differences
To optimise trade facilitation, companies must understand the distinctions between the three AEO certification levels:
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| Feature | AEO T1 | AEO T2 | AEO T3 |
|---|---|---|---|
| Eligibility | Basic compliance requirements | Enhanced compliance and security standards | Highest level of compliance and security |
| Benefits | Basic facilitation | Advanced facilitation, reduced inspections | Maximum facilitation, minimal inspections |
| Validity | 3 years | 3 years | 5 years |
| Application Process | Online | Online with physical verification | Online with comprehensive verification |
When and Why Businesses Upgrade from T1 to T2
Firms usually progress from AEO T1 to T2 so that they can experience additional advantages such as fewer customs checks, priority handling, and greater facilitation in international trade. The upgrade reflects the higher compliance and operational levels observed by a company.
Advantages of AEO T2 Certificate
Obtaining the AEO T2 certificate opens up a wide range of benefits:
Below are the two benefits that are available in AEO T2 but not in AEO T1 Certification:
- Deferred Duty Payment Facility
This benefit allows AEO T2-certified businesses to delay the payment of customs duties instead of paying them upfront at the time of import.
- This improves cash flow and financial flexibility, helping businesses manage working capital better.
- Duty payments can be made periodically (e.g., monthly), reducing administrative work and simplifying accounting.
- Mutual Recognition Agreements (MRA Benefits)
MRAs are agreements between India and partner countries to mutually recognize AEO certifications.
- AEO T2 holders get faster customs clearance, reduced inspections, and priority treatment in partner countries.
- This leads to smoother international trade, lower compliance costs, and a competitive edge.
- India currently has MRAs with South Korea, Hong Kong, UAE, and Taiwan, with more in progress.
Below are the advantages that are common to all AEO Categories but in T2 it comes with higher degree of facilitation.
- Increased Facilitation & Quicker Customs Clearance
Certified organizations enjoy faster customs procedures, avoiding delays and increasing supply chain effectiveness.
- Waiver of Seal Verification
Eliminates routine seal verifications, simplifying the export-import process.
- Direct Port Delivery (DPD) & Direct Port Entry (DPE)
Allows direct movement of goods, reducing handling and storage time at ports.
- Reduced Customs Inspections
Lower physical inspection frequency, resulting in quicker clearance times.
- Priority Scanning & 24×7 Clearance
Access to priority scanning facilities and customs clearance services 24 hours a day.
- 75% Bank Guarantee (BG) Waiver
Major reduction in bank guarantee requirements, reducing financial burdens.
- Refund/Rebate Processing Within 45 Days
Rapid refund and rebate processing, enhancing cash flow.
- Improved Duty Drawback & Dispute Resolution
Reduced disputes with faster resolution and faster processing of duty drawback claims.
- Self-Sealing of Containers
Permitted to self-seal containers, minimizing reliance on customs officers.
- Assigned Client Relationship Manager
A permanent customs officer is allotted to handle questions and streamline procedures.
- ID Cards & Space in Customs Warehouse
Issuance of ID cards to authorized personnel and allocation of space in customs warehouses.
- Email Intimations on Shipment Arrivals & Departures
Automated alerts on the movement of shipments provide prompt updates.
Who is Eligible for AEO T2 Certificate?
Eligibility conditions for receiving the AEO T2 certification are:
- Business Operations: Should be an importer/exporter with international trade operations.
- Operational Tenure: At least 3 years of business operations. (This requirement may be exempted for deserving cases.)
- Document Handling: Should have processed at least 25 shipping documents (Shipping Bills & Bills of Entry) during the previous financial year. (In case of MSMEs, the requirement is 10 documents.)
- Compliance Record: Track record of compliance with customs law and regulations.
- Financial Health: Good financial health with audited accounts.
- Security Measures: Strong security measures are taken in operations.
AEO T2 Application Form: How to Apply?
Step-by-Step Process
- Registration: Go to the AEO India Portal and register your business entity.
- Login: Upon verification, log in to the portal with your credentials.
- Application Form: Go to the AEO T2 application area and provide the requisite details.
- Submission of Documents: Submit the necessary documents as per the instructions.
- Physical Submission: Provide a physical submission of the application to the jurisdictional Principal Chief Commissioner/Chief Commissioner (AEO Cell).
- Verification: The Customs officials will conduct a verification procedure, involving visits to the sites and evaluation.
- Certification: Upon successful verification, the AEO T2 certificate will be issued.
Documents Required for AEO T2 Application
- Annexure A: Application Form
- Annexure B: Security Plan
- Annexure C: Process Map
- Annexure D: Site Plan
- Annexure E: Self-Assessment Forms (E.1 to E.5)
- Financial Statements: Audited financial statements of the last three financial years.
- Compliance Records: Records of compliance with customs rules.
- Security Protocols: Proof of security measures implemented.
Timeline: How Long Does It Take to Get AEO T2 Certified?
The AEO T2 certification processing time usually takes 3 to 6 months from the submission date of the application. The following factors determine the timeline:
- Completeness of Application: Proper and complete documentation can speed up the process.
- Customs Verification: Scheduling and completion of site visits and audits in a timely manner.
- Response Time: Quick response to any questions or requests for additional information from customs authorities.
Cost Incurred in AEO T2 Application
- Direct Charges
- Government Charges / Fees.
- Indirect Expenses
- Preparation of Documents: Expenses incurred in gathering and preparing required documents.
- Consultancy Services: Charges for expert help in application preparation and filing.
- Infrastructure Upgrades: Investments in security features or system improvements to ensure compliance.
General Issues in AEO T2 Application & How to Overcome
Documentation Setbacks
Challenge: Incorrect or incomplete documentation may cause delays or rejections in the application.
Solution: Hire experts to verify that all papers are properly prepared and submitted.
Physical Inspections
Challenge: Customs officials’ site visits might reveal gaps in compliance.
Solution: Perform internal audits and rectify possible problems prior to the official inspection.
Understanding Compliance Requirements
Challenge: It is intimidating to navigate the intricate compliance environment.
Solution: Consult professionals with expertise in customs regulations and AEO requirements.
How We Can Help You Get AEO T2 Certificate
At Afleo, we focus on streamlining the AEO T2 certification process:
Master Consultation & Eligibility Analysis
Our consultants determine whether your company is qualified and walk you through the requirements for eligibility.
Guidance for Documentation & Certification
We aid in the collation, editing, and filling of all requisite papers to smooth out the application procedure.
Comprehensive Follow-Up & Interaction with Customs Officers
Our experts continuously interface with customs representatives to accelerate verification proceedings.
Backup at Physical Inspection
We will prepare your premises and personnel for the customs inspection, ensuring compliance with all standards.
Post-Certification Support & Renewals
Afleo offers continuous support in maintaining compliance and helps with certificate renewals when necessary.