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Recognition of Authorised Economic Operator status outside the UK in a no-deal Brexit outcome

24 May 2019

As we have written earlier on our Brexit hub, Authorised Economic Operator (AEO) accreditation reduces the risk of delays at the borders. This will become critical in the case of a no-deal Brexit, especially for retailers and manufacturers with complex supply chains or time-critical supplies/deliveries. Read more on AEO benefits and how we can assist traders to become accredited.

On 30 January 2018, The European Commission issued a series of notices to stakeholder on the withdrawal of the UK and EU rules in the field of customs and indirect taxation. One of the points made in the notice was about AEO:

“Subject to any transitional arrangement that may be contained in a possible withdrawal agreement […] 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."

In plain language, AEO certificates issued by HMRC would no longer be recognised in the EU. This would affect UK imports from the EU as well as UK exports to the EU. What exactly would the consequences be?

  1. Goods exported from the EU to a UK AEO-certified consignee would not get “fast track” treatment at the point of export, whether that point is the port of Calais or Amsterdam airport or any other exit point.
  2. Goods imported into the EU, dispatched by a UK AEO-certified consignor, would likewise not get “fast track” treatment at the point of importation. Such shipments would be treated in the same way as shipments from non-AEO certified consignors, whether the shipment was dispatched from Dover, New York or Singapore.

This is something to be aware of, but remember that this refers to the worst-case scenario - which is not necessarily the only or even the most likely outcome. Furthermore, the benefits of AEO accreditation would still apply in the UK, i.e. at the point of import into the UK and at the point of export out of the UK. All other benefits of AEO accreditation offered by HMRC also remain unaffected.

In this context, it is important to keep in mind that the EU has mutual recognition in place with many other countries, some of which have no trade agreements or other trade arrangements with the EU (e.g. the US and China). Therefore, the EU and UK may be able to agree mutual recognition even without an agreement on a future trade arrangement and/or customs union.

Please contact Hakan Henningsson for further information or assistance on AEO status or other Customs Duty matters.

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