With the Union Customs Code fast approaching, Langdon’s Customs Manager Dave Bradbury looks at the benefits for businesses in the fashion and textiles industries of achieving AEO status and what might lie ahead if they don’t…

Fashion is a dynamic UK industry with a global reach which makes a huge contribution to the economy thanks to the dazzling creativity of the nation’s designers. With the growth of online shopping changing the retail landscape, speed of turnaround is essential and has prompted most businesses to invest substantially in their delivery capabilities.

As most finished articles or textiles are manufactured internationally and imported, anything that holds up the process through delays at Customs or involves financial penalties will have a very adverse effect on the fashion industry, estimated to be worth around £26billion to the UK economy, part of a nearly £40billion sector if you include general clothing and footwear.

The approaching introduction of the Union Customs Code (UCC) will benefit those involved in the fashion, clothing and footwear sector that have Authorised Economic Operator (AEO) status, or alternatively, hinder businesses who are non-compliant.

Interest and action in achieving AEO accreditation, one of the cornerstones of the UCC scheme, has been limited and it is concerning that many companies, in particular SMEs, are unaware of the potential impacts of the legislation.

European Union legislation from 1st May 2016 is intended to standardise the movement of trade across EU member states, simplifying Customs rules and improving security and safety of both inwards and outwards goods. Failure to be compliant could result in some unwelcome and potentially damaging financial and operational constraints for businesses involved in fashion.

AEO Status Will Help You Keep Your Delivery Times Short!

In an evolving retail sector even shoppers in-store have access to an electronic service whereby if they don’t see what they require in style or size, the item can be ordered for next day delivery or even, in some cases, can be collected from the retailer later the same day. This flexibility and high-end, time sensitive, door-to-door service is threatened if the correct accreditation is not in place.

Without AEO status your deliveries may be delayed

The internet has made short delivery deadlines the fashion (if you pardon the pun!). The rapid turnaround of orders and small window for delivery means that the sector is far more at risk than other importers and exporters. Failure in getting clothes to the customer by the time specified can result in future lost sales or return of goods.

In a fast moving goods market, there are benefits for importers in the fashion and clothing sector as they will be able to sell unhindered from a Customs Warehouse if they are AEO accredited. For those who are not, prior notification of removal of goods will need to be given to HMRC before goods are removed and a dwell time imposed resulting in delays. Additionally, non-AEO accredited/compliant companies will be subject to much higher guarantees to operate customs procedures.

At Langdon Systems, we have some major importers on our client base and we have advised them to get their AEO applications in sooner rather than later. HMRC have stated that due to the high number of applicants for AEO accreditation, if you haven’t already got your application in it’s unlikely that you’ll be authorised by the 1st of May deadline when UCC is enforced. Fortunately, there are transitional arrangements that will apply but, whereas some aspects of the UCC will be phased in over time, others will apply immediately so time is running out.

Applying for AEO Status

Application form for Authorised Economic Operators (AEO) Certificate

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
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