Simplified procedures

Authorised Economic Operator (AEO) 

Authorised Economic Operator (AEO) is a new legal institute that was introduced into the Customs system of the Republic of Serbia by the Customs Act in 2010, and then was elaborated in details by the Regulation on customs-approved treatment of goods. 

The World Customs Organisation recognizes the AEO as a main, i.e. a key factor for improving and strengthening relations between the Customs - business community. Also, this institute is regulated by the Customs Law of the European Union, where it was defined as an economic operator involved in the activities regulated by the Customs Regulations, that complies with the particular defined conditions which makes it a reliable partner and as such enjoys the benefits in relation to other economic operators that do not possess this status. 

By the Customs Regulations of the Republic of Serbia, the Customs Law stipulates that an economic operator with a registered office in the customs territory of the Republic of Serbia and which meets the requirements of this Law may claim the status of "Authorised Economic Operator".

The main reason for the existence of this institute is the desire to give to economic operators that comply with the regulations and that are reliable, the opportunity to use the customs facilities in respect of customs procedures and customs control that are substantial. Benefits that these operators have in the customs territory of the Republic of Serbia that imply faster customs procedures, reduction of costs, better reputation, better job opportunities, better understanding of customs requirements, and better communication with the customs authorities. Also, the Authorised Economic Operators, under certain conditions, can have these benefits beyond the borders of Serbia. The status of the AEO is accepted on a reciprocal basis, in the countries that have international agreements with the Republic of Serbia. 

It should be noted that obtaining the status of the AEO is available to all economic operators, regardless of the size of enterprise, including small and medium-sized enterprises. Also, on the other hand, it should be noted that economic operators have no legal obligation to become the AEO. It is a matter of choice of an economic operator, depending on its particular situation and business plans.

 

CRITERIA - general

An operator that wishes to obtain this status must fulfill the first requirement that is to have a head office in the customs territory of the Republic of Serbia. However, the applicant does not need to have a head office in the Republic of Serbia, if by an international agreement between the Republic of Serbia and the other countries in whose territory the economic operator has its head office, is provided mutual acceptance of these certificates, or if the applicant for the AEO certificate is an air carrier or shipping company which does not have the head office in the Republic of Serbia, but has a representative office or a branch and is already using certain simplifications (Regulation on customs-approved treatment of goods, Article 481) in the process of transit.

In addition to this general, basic requirement, the applicant must also meet the following criteria: 

1. Compliance, i.e. observance of the customs regulations in the preceding period;
2. Keeping business records up to date, and, if necessary, the records on the transport of goods, which allows appropriate customs control;
3. Financial solvency;
4. If necessary, meeting the appropriate standards for safety and security in international trade of goods. 

CRITERION - Individual 

Compliance with customs regulations in the previous period.

It is considered that this criterion is met if in the last three years before applying for the award of this status, the applicant/its responsible person or its representative in customs procedure, or the person responsible for customs matters, is not legally guilty of serious or repeated violation of customs regulations. 

However, if the applicant did not comply with customs regulations in the previous period, i.e. committed an infringement of customs regulations, and customs authority considers, given the number and volume of work, i.e. customs procedures of the applicant, that the infringement of the regulations is insignificant and does not cast doubt on the "good faith" of the applicant, it shall be deemed that this criterion is fulfilled. 

Keeping business records up-to-date, and, if necessary, evidence of the transport of goods, which allows appropriate customs control.

 

In order to meet this criterion, it is necessary that the applicant: 

1. Keeps accounting records in accordance with generally accepted accounting standards,
2. Allows the customs authority physical or electronic access to its customs records and, preferably, records of the transport,
3. Has separate logistics systems for domestic and foreign goods, 
4. Has an administrative organisation which corresponds to the type and scope of business and which is suitable for the management of the goods traffic, and has an internal control that enables detection of illegal or irregular transactions, 
5. Has, when it is necessary, good procedure for the regulation of permits and approvals related to the measures of commercial policy or the trade of agricultural products,
6. Has tidy archived records and data and protection against data loss, 
7. Indicates to its employees the need to inform the customs authorities about the difficulties they face with, and inform the customs authorities of such cases,
8. Has an appropriate information technology security measures to protect information systems from unauthorized use and to protect documents. 

Financial solvency

Financial solvency of the applicant is evaluated by taking into consideration the last three years, i.e. it is necessary that the financial situation of the applicant in the last three years was such that it was able to fulfill its obligations. It leads to a conclusion that in the future, it will be able to fulfill the obligations arising from the award of the status of "Authorised Economic Operator". 

If necessary, the fulfillment of specific standards for safety and security in international trade of goods.

Standards for safety and security are considered appropriate if: 

1. the structures used for activities covered by the AEO certificate were constructed of a material that does not allow unlawful entry and provide protection against unlawful intrusion,
2. there are the appropriate measures for access control, in order to prevent unauthorized access to the premises for delivery, at loading premises and the areas where the goods are stored, 
3. measures for handling of goods are taken, which include measures of input, exchange or loss of material and unauthorized handling of goods,
4. there is, when necessary, procedures for regulating the import and / or export licences related to the goods whose transport is subject to prohibitions and restrictions, and procedures for distinguishing goods,
5. the applicant has applied measures that clearly define its business partners in order to protect international trade,
6. the applicant, to the extent permitted by the regulations, performs security checks of potential employees who will work on security sensitive positions and carries out regular checks, 
7. the applicant`s employees actively participate in the programs devoted to the development of security awareness.

In addition, if such applicant for the AEO certificate - safety and security, is an air carrier or a shipping company not established in the Republic of Serbia, but it has a representative office or a branch in Serbia and, uses simplification that is reflected in the use of a unique goods manifest as a declaration for transit procedure, then it must have: 

1. internationally recognized safety certificate on safety and / or security that is issued on the basis of international conventions governing these sectors of transport, or 
2. the status of a regulated agent, approved in compliance with the regulations on the air traffic and aviation security, or
3. the certificate issued in another country, if the bilateral agreement concluded between the Republic of Serbia and that country envisaged the acceptance of certificates, under the terms of that agreement. 

TYPES OF CERTIFICATES 

The Regulation on customs-approved treatment of goods envisaged that awarding the status of the Authorised Economic Operator to economic operators shall be implemented through issuance of the AEO certificates. Its form is defined in Annex 6 of the Regulation on customs-approved treatment of goods. 

There are three kinds of certificates: 

1. AEO Certificate - Customs simplifications (abbreviation OPSC or AEO C in English) 
2. AEO Certificate - Safety and Security (abbreviation OPSS or AEO S in English AEO S) 
3. AEO Certificate - Customs simplifications / safety and security (abbreviation OPSCS or AEO F in English). 

WHAT ARE THE BENEFITS?

Bearing in mind the different kinds of certificates, the benefits awarded to economicoperators vary, depending on the type of certificate.

• the AEO certificate holder - Customs simplifications, shall have the following benefits:
  • easier and faster approval of simplified customs procedure, governed by the customs regulations by customs authority (economic operator is not required to have the status of "Authorised Economic Operator "in order to obtain approval for the simplification of customs procedures in accordance with customs regulations. If an operator that requires simplification is already a holder of a specific AEO certificate, the customs authority shall not re-examine the conditions which have already been subject to review in the process of issuance of these certificates);
  • fewer physical and document controls comparing to economic operators that do not have this status;
  • priority position in relation to other economic operators, when the customs authority, on the basis of risk analysis, determines that the subject to control shall be shipment covered by the declaration submitted by the holder of the AEO certificate;
  • the possibility to request another place of control other than the one determined by the customs authorities, in order to speed up the process or reduce the costs of the procedure.
• the AEO certificate holder - safety and security, shall have the following benefits:
  • the summed customs declaration need not contain all the required information, which is normally required for other economic operators, or to make the data available to the customs authority through the business system (electronically);
  • the possibility to notify in advance, i.e. if the holder of the certificate filed input / output summed customs declaration, before the goods entered into / leave the customs area, the competent customs authority can notify the authorized economic operator that the goods will be subject of control, based on the results of the conducted risk analysis in terms of safety and security;
  • fewer physical and document controls comparing to economic operators that do not have this status;
  • priority position in relation to other economic operators, when the customs authority, on the basis of risk analysis, determines that the subject to control shall be shipment covered by the declaration submitted by the holder of the AEO certificate;
  • the possibility to request the place of control other than the one determined by the customs authorities, in order to speed up the process or reduce the costs of the procedure.
• the AEO certificate holder - Customs simplifications / security and safety, can have all the above mentioned benefits (benefits for the AEO certificate holders - customs simplification, as well as benefits for the AEO certificate holders - Safety and Security).

Actions to be taken before applying 

Before a certain economic operator decides to apply for the AEO certificate, it is recommended to carefully and seriously analyse and plan its activities. Specifically, as stated in the Guidelines for Authorized Economic Operator, it is important that economic operator take the following steps before the official submission of the request: 

• decide upon the type of certificate – an economic operator must be fully aware of the different types of the AEO certificates, and to apply for the type of certificate after a proper assessment. During the assessment the main question to be answered is “Which are the customs procedures that I participate in, and in which aspects the AEO certificate can be useful to me?”
• the appointment of a contact person - during the various stages of the application procedure, various departments / persons will participate in the process. The Customs Law stipulates that an economic operator is obliged to designate the person who will be the contact person with the customs authorities. However, it is recommended to do so even before the official submission of the request and, especially in big companies, to be appointed a Manager, who has the authority to make decisions, supervise and coordinate the application procedure; 
• exchange of information with the customs authorities - exchange of information and discussion with the customs authorities before the official submission of the request will save a lot of time after the first formal procedure for granting the status of AEO;
• integrating data of different services - after reviewing documents and preparing the necessary data, it is recommended to inform the competent authorities of their responsibilities related to the conditions and the entire procedure for granting the status of AEO; 
• self-assessment according to the conditions for obtaining the AEO status – it is recommended to use a Self-assessment questionnaire listed in Annex 1 of the Guidelines for the assessment of the readiness of an economic operator to meet the criteria for the AEO status;
• completing the documents for the request - as a result of the above steps, it may be necessary to amend the request and other documents. While it can consume the extra time, it is more appropriate if the recommendations of the customs authorities are taken into account at this stage.

Submitting the application for the AEO certificate 

The application for the AEO certificate is submitted on the application form regulated in Annex 5 of the Regulation on customs-approved treatment of goods and may be submitted in written or electronic form, as follows: 

1. To the customs authority in the area where the applicant keeps the main accounting records in respect of the customs procedures and, where at least a part of the activities that should be covered by AEO certificate are carried out, or
2. To the customs authority which, by the application of information technologies and computer networks, though the computer system of the applicant, has access to the main book-keeping records of the applicant in relation to the customs procedures, and where the business activities of the applicant are organised, or at least a part of the activities that should be covered by AEO certificate.

If the competence of the customs authority cannot be determined as described above, then the application is submitted: 

1. To the customs authority in the area where the applicant keeps the main accounting records in respect of the customs procedures, or 
2. To the customs authority which has access to the main book-keeping records of the applicant in relation to the customs procedures, and where the business activities of the applicant are organized.

For clarification purposes, the term "main accounting records" include records and documents that enable the customs authority to verify and monitor compliance with the conditions and criteria required for the AEO certificate.

 

The customs activities upon reception of an application

After receiving an application for the AEO certificate, the customs authority shall determine whether it contains all the necessary information. If it finds that the application does not contain all the necessary information, the customs authority shall, within 30 days demand the economic operator to submit the required information. 

The application will be denied if: 

1. it is not submitted in accordance with Articles 23 and 24 of the Regulation on customs- approved treatment of goods,
2. the applicant is guilty of an offense for which is provided a protective measure of confiscation of the goods connected to his economic activity, or if at the time of application  bankruptcy proceedings of the applicant has already been instituted,
3. the responsible person is guilty of an offense for which is provided a protective measure of confiscation of the goods and which is related to violations of customs regulations, and is connected to his activities as a responsible person;
4. the request is submitted before the expiry date of three years from the release of AEO certificate.

Procedure for issuing AEO certificate 

The time required to customs authority to process the request and to assess the fulfillment of the criteria for granting the status of "Authorized Economic Operator" will depend on a number of factors, such as: 

• the size and complexity of the activities of the applicant; 
• skillfulness of the applicant; 
• existing information available to the customs authity and other approvals given by the customs authorities; 
• necessary consultation with other customs authorities;
• necessary consultation with other governmental bodies.

In order to accelerate the process, as well as to lower costs of the procedure, the customs authority shall, wherever possible, use information and data related to the applicant which are already available. It is data known to the customs authority from: 

• the previous request for specific approval;
• the previous controls;
• the customs procedures already used by the applicant;
• the self-assessment carried out by the applicant before submitting the application;
• the existing standards fulfilled by the applicant; 
• the existing findings and conclusions of experts in the relevant fields.

Further, customs authority during the processing of the request shall take into account  internationally recognized certificates that the applicant possesses, and which are issued in accordance with one of international conventions. 

In any case, the customs authority is required to decide (accept or reject) within 120 days from the date of receipt of application. If there are justified reasons, the customs authority may extend the deadline for another 60 days. 

 LEGAL IMPLICATIONS of issuing AEO certificates 

1. AEO certificate shall take effect ten days from the date of issue;
2. period of validity of the AEO certificate is not time-limited; 
3. customs authority will monitor, i.e. check regularly fulfillment of the criteria by an Authorized Economic Operator. Related to this is an obligation of the Authorized Economic Operator to notify the customs authority of all events and facts which occurred after the issuance of the certificate, which could have an impact on qualification;
4. audits, i.e. re-evaluation and meeting the criteria set-up for status of the Authorized Economic Operator, always takes place in the following cases:

• significant changes in the relevant regulations;
• reasonable suspicion that the Authorized Economic Operator no longer meets one of the criteria.

Suspension of the status of "Authorised Economic Operator" 

• ex officio - the customs authority shall suspend this status when it finds its non-compliance with the criteria for AEO certification, or in the case of reasonable suspicion that the Authorised Economic Operator performed the action for which can be instituted specific proceeding which is associated with the violation of customs regulations. Before the decision on suspension, the customs authority shall notify the Authorised Economic Operator of its intention and leave a deadline of 30 days to correct the irregularities and / or to express their arguments. In any case, when the nature or degree of danger to the safety and security of people, public health or the environment, the status will be suspended immediately. 

If the Authorised Economic Operator within 30 days does not rectify the deficiencies identified, the competent customs authority shall notify the Authorised Economic Operator that its status is suspended for a period of 30 days and allows it to take appropriate measures to eliminate shortcomings. When an economic operator is not able to remedy the deficiencies within 30 days but can provide evidence that the conditions can be met if the suspension period is extended, the customs authority shall suspend the status of authorized economic operator for 30 days more.

• ex privato – the Authorised Economic Operator that is temporarily unable to fulfill any of the criteria, may request the customs authorities to require the suspension of the AEO status. In this case, the Authorized Economic Operator shall notify the customs authority responsible for issuing a certificate, stating the date on which they will again be able to meet the criteria of any measures it plans to take, as well as the planned timeframe. 

If the Authorised Economic Operator fails to remedy the deficiencies within the period stated in its notification, the customs authority responsible for issuing the certificate may grant a reasonable extension of time, provided that the Authorised Economic Operator has acted in "good faith". 

LEGAL CONSEQUENCES OF SUSPENSION 

• suspension will not affect the customs procedures that were started before the suspension, but have not yet been completed; 
• suspension shall not automatically affect existing authorisations for customs simplifications, unless the reasons for the suspension of the status of " Authorised Economic Operator " do not have an impact on this authorization;
• suspension shall not automatically affect existing authorisations for customs simplifications that are issued on the basis of AEO certificates, for which the conditions are still fulfilled;
• in case the economic operator which has been AEO certified - Customs simplifications / security and safety, is no longer eligible for the AEO certificate.
  • safety and security, the status of " Authorised Economic Operator " will be partially suspended and the same economic operator will be issued a new certificate which is AEO certificate - customs simplifications. 

TERMINATION OF SUSPENSION 

If the economic operator with the suspended status of authorized economic operator, take all necessary measures to fulfill criteria for granting the status of OPS, the customs authority terminates the suspension and inform the economic operator. 

If, however, the undertaking which the suspended status of authorized economic operator for the duration of the suspension does not take all necessary measures to recover suspended status, the customs authority will definitely abolish this status. 

Decertification of "Authorized Economic Operator" 

AEO Certificate will be discontinued by the customs authority which issued it, in the case: 

1. when the authorized economic operator for the duration of the suspension does not take all necessary measures to recover suspended status; 
2. if the authorized economic operator committed a serious violation of customs regulations and has no further right of appeal; 
3. upon the request of authorized economic operator.

The abolition of the certificate shall take effect on the day of the reception of notification by the entity that had the status of Authorised Economic Operator suspended.

In contrast, to the economic operator is, within three years from the date of termination of AEO certificates, cannot be issued a new AEO certificate, except in cases where the AEO certificate was canceled upon the request of an Authorised Economic Operator or has been discontinued because the period of the suspension at the request of an authorized economic operator, it failed to take the necessary measures for the defined period.