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The introduction of the Union Customs Code imposes some unwelcome restrictions for thousands of UK organisations. Our Customs Manager Dave Bradbury explains why this should be viewed as an opportunity rather than a problem for logistics providers…

The new Union Customs Code (UCC), which comes into effect next May, is being introduced to standardise the movement of goods across EU member states, simplifying Customs rules and improving security and safety of both imported and exported products. Failure to be compliant with the new conditions of the UCC and one of its cornerstones, the Authorised Economic Operator (AEO) scheme, could have a huge effect on the logistics industry, which is worth over £74billion to the UK economy.

The role that transport and logistics play in the UK and global economy should not be underestimated – in 2014 Britain was ranked fourth in the World Bank’s list of top logistics performers – however of the 196,000 UK businesses involved in the sector currently less than 400 have AEO certification, which is a long way behind their main European competitors such as Germany which has over 11,000.

AEO – An Unnecessary Burden or a Chance to Expand?

I’m sure many logistics providers will view this legislative change as a problem that they could do without. However in reality I believe they should look at it as an opportunity to expand their operations by offering extended services to those businesses unwilling or unable to apply for Authorised Economic Operator status themselves.

It’s worth noting that more and more of our trading partners around the world, particularly  the United States, have developed (or are in the process of developing) an equivalent standard and many firms will only trade with organisations in possession of an AEO certificate.

Application form for Authorised Economic Operators (AEO) Certificate

Mandatory Guarantees will be imposed on operators of Customs Procedures as well as pre-notification of release and dwell times for any business that fails to comply with the AEO standard.

These guarantees are going to be expensive and will apply not just to a Customs Debt but in some cases an undertaking to cover all business debts might be required. This will certainly deter some businesses from operating their own facilities and make them seek alternative arrangements through third-party providers. They won’t be able to unload the liability however as due diligence will limit any liability to a sound provider.

Having AEO Certification Can Avoid Costly Delays

Arrivals

This new Customs requirement does depend on where in the international supply chain a company sits operationally. Even if a logistics provider does not provide Bonded Warehousing services, they may still face lengthy delays and incur additional penalties if a driver exceeds their operating times when picking up from another business that does.

So it seems apparent that AEO status will become a necessity for almost every business that trades internationally. It’s important therefore that those providing logistics services are aware of the implications and impact on them when dealing with businesses authorized for Customs activities.

However most freight forwarders, transport companies and warehouse owners involved in importing and exporting goods often have little experience of what the new legislation entails.

Applying for AEO Status

At Langdon Systems we provide a dedicated service for those intent on achieving AEO (C) status for businesses established in the UK and urge them to ensure their operations are compliant by the May 1st 2016 deadline.

We host one day “Introduction to AEO” seminars and complete AEO training programmes which can be tailored to be delivered in-house for your own specific requirements.

Next Steps

  • Visit our dedicated AEO website to find out more about the Union Customs code and the Authorised Economic Operator scheme
  • Contact us for more information about our AEO training programmes
  • Follow us on Twitter, LinkedIn and Google+
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