Nowadays, AEO and compliance are indispensable in international trade. However, this does not mean that the maintenance of the AEO authorisation and/or retaining a high compliance level is straightforward. Procedures, internal controls, audits and monitoring are key themes in this respect. Furthermore, an AEO- or Compliance Control Framework can help to ensure compliance completely.
A company that has obtained AEO status has also completed a self-assessment. The basis of this self-assessment lies in the company’s own procedures and internal control measures. Furthermore, the company’s manager has declared that after the issuance of the authorisation, the company will, on their own initiative, report any changes and will regularly determine whether the AEO requirements are still being met – in other words, “I will monitor.”
The question is whether companies are aware of the requirements in this regard and whether they are acting accordingly. In practice, the reality is often challenging. Only a limited group of companies has measures or a control framework in place within which procedures related to customs and AEO can be implemented.
However, monitoring is not a voluntary activity but a requirement. It must be part of the company’s own internal control system, and the AEO must be able to demonstrate that and how the controls were performed. It is also important that the results of monitoring are recorded and can be presented.
Internal controls, internal audits, and an external audit are by no means a luxury to establish whether the company is “in control.” Are the controller or managing director fully and timely informed by everyone about changes in the AO/IC (Administrative Organisation/Internal Control)? Or about incidents in customs formalities or safety incidents? Have the procedures ever been updated or reviewed for actual implementation or execution?
These are all relevant questions in the context of maintaining AEO, and the time has come to adopt an integrated and structured approach. An approach that should result in an AEO Control Framework, where various measures ensure that the AEO remains “in control.”
1. Document procedures, internal controls, and internal audits
As an AEO, you must be able to demonstrate that you are in control. This entails working according to procedures and performing internal controls and audits. Describe these procedures and document how you conduct controls and audits. Then prepare a report of the internal controls and audits performed.
2. Follow up on findings from internal controls, internal audits, and external audits
Performing controls or audits is one thing; following up on them is another. If internal controls or internal or external audits yield findings, these findings must be acted upon. For example, if an incorrect commodity code has resulted in insufficient duties being paid, you should submit a request for additional payment. Conversely, if excess duties have been paid, you can request a refund. Additionally, take measures to prevent recurrence in the future. Our experts are happy to assist you with the proper recording and follow-up of findings from controls and audits.
3. Prepare for an audit by Customs
Customs periodically assesses whether you meet the AEO requirements. If you have a well-functioning AEO Control Framework, an audit by Customs should not be a cause for concern. You may opt for an additional external audit to ensure every detail is addressed.
