In 2008 the EU rolled out the Authorized Economic Operator (AEO) program to secure the international supply chain. Since transport and logistics companies play a vital role in the international supply chain, it is not surprising that in the meantime many of them stepped into this program.
The AEO status allows transport and logistics companies to be recognized as reputable trade partners (kite mark) and to benefit from less and/or fast-tracked controls through customs. AEO is a means of attaining a lower risk profile and to enhance customs and trade compliance by setting up practical work formulas and effective internal control procedures.
Currently, the AEO program is voluntary. However, in the near future, economic operators will have to comply with the AEO criteria (except for security) in order to continue to benefit from simplified customs procedures.
A global logistics player assigned KPMG to provide assistance in order to obtain AEO status.
KPMG guided several key departments (customs, logistics and security) through the self-assessment questionnaire taking into account the functions and role of the company (customs agent, warehouse keeper, freight forwarder, etc.) within the international supply chain.
Based upon our input, the company carried out an in-depth risk mapping to benchmark the strength of the current supply chain against AEO accreditation standards. KPMG established a full report with a gap fit analysis of remedial actions to help meet the AEO criteria. As a result, the company introduced new and/or amended work practices and internal control procedures in order to achieve a higher level of customs and trade compliance.
The project proved to be successful when the global logistics provider gained AEO accreditation. The effort received further recognition when Belgian Customs used the AEO application as the benchmark to screen other global logistics players. Moreover, the global logistics provider successfully shared its experience and knowhow with intergroup-companies allowing them to obtain AEO status.
A key element in the successful completion of the AEO project proved to be the coordination between both KPMG and the in-house quality manager of the company in teaming up several of the key departments thereby enhancing uniform work and internal control procedures. In addition, accurate and transparent communication both within the organization and with the customs authorities made this a winning project.