OEA Certification: Facilitating Foreign Trade with Security and Agility

In the dynamic landscape of foreign trade, there are many stages, companies, and agencies involved in the processes. With the continuous growth of activities and businesses, maintaining quality, reliability, and agility in operations becomes increasingly important. An essential tool to achieve these goals is the Authorized Economic Operator (AEO) Certification.

In this article, we will delve into the AEO Program and its benefits for the logistics and foreign trade sector. We will understand what AEO is, who can be certified, the types of available certification, the process to obtain certification, and most importantly, the benefits it offers.

What is the Authorized Economic Operator – AEO?

AEO, an acronym for “Authorized Brazilian Economic Operators,” is a certificate created and issued by the Brazilian Federal Revenue Service. This recognition is granted to operators who commit to conducting import and export activities correctly and securely.

After meeting the requirements and criteria of the AEO Program, the company is certified as a low-risk operator, resulting in exclusive benefits offered by the Brazilian Customs. This includes simplification and greater agility in international trade operations.

The concept of the Authorized Economic Operator was introduced by the World Customs Organization (WCO) to establish international standards to guide Customs Administrations of different countries. This harmonized approach based on cooperation and partnership among businesses aims to facilitate trade and ensure greater security in international transactions.

Which Companies Can Be AEO?

The AEO Program is open to all types of companies involved in foreign trade operations with international movement of goods. According to Article 1, Paragraph 1 of Normative Instruction RFB No. 1985/2020, eligible companies for AEO certification include:

• Importers;
• Exporters;
• Carriers;
• Freight Forwarders;
• Goods Depositories under customs control in customs warehouses;
• Depositories in Special Warehouses for Export Clearance (Redex);
• Port Operators;
• Airport Operators.

It is important to note that the AEO Program is voluntary, meaning that participation is not mandatory, and the lack of certification does not hinder or limit companies’ participation in regular foreign trade operations.

What Are the Types of AEO Certification?

For AEO certification, there are two available modalities, each with specific criteria:

AEO-Security (AEO-S)

Is one of the certification modalities within the AEO Program (Authorized Economic Operator) and is based on security criteria applied to the logistics chain in the flow of foreign trade operations. This modality can be requested by all types of companies listed in Article 5 of Normative Instruction RFB No. 1985/2020.

To obtain AEO-Security certification, the company must meet a series of security requirements aimed at ensuring the integrity of operations and the protection of goods throughout the logistics process. These requirements encompass different aspects related to the physical and operational security of the company, as well as awareness and preparedness to deal with threats and risk situations.

Security Requirements for AEO-S

Below, we detail the main security requirements for obtaining AEO-Security certification:

• Cargo Security: The company must demonstrate that it has effective security procedures and measures to ensure the integrity of the cargo during transportation, handling, and storage. This includes the use of appropriate packaging, tracking and monitoring systems, access control to cargo areas, among others.
• Physical Access Control: It is essential for the company to rigorously control access to its facilities and storage areas, allowing only authorized and properly identified individuals to enter. Additionally, it is important to maintain detailed records of accesses made.
• Threat Awareness and Training: Company employees must undergo periodic training that equips them to identify potential threats to operations’ security. This includes training on theft and robbery prevention, emergency procedures, identification of suspicious goods, among others.
• Physical Security of Facilities: The company must implement physical security measures in its facilities, such as surveillance camera systems, security alarms, fences, control of vehicle entry and exit, among others. These measures aim to protect the facilities against possible invasions and incidents.
• Management of Business Partners: The company must establish criteria and procedures to select and evaluate its business partners, such as suppliers, carriers, and customs agents. It is important to ensure that these partners also adopt appropriate security practices and comply with the standards required by the AEO Program.

AEO-Compliance (AEO-C)

A modality that incorporates criteria for compliance with tax and customs obligations. This modality is divided into the following levels, differentiated by required criteria and granted benefits:

• AEO-C Level 1;
• AEO-C Level 2.

Tax and Customs Compliance Requirements for AEO-C

• Complete Description of Goods: The company must provide a complete and detailed description of the imported or exported goods in its foreign trade operations. This description must be accurate and comprehensive to allow for correct product identification.
• Fiscal Classification of Goods: It is crucial for the company to correctly classify the goods according to the Common Mercosur Nomenclature (NCM) or the Harmonized System of Designation and Coding of Goods (HS). The fiscal classification determines the tax rates and customs treatments applicable to the goods.
• Indirect Operations: The company must ensure that its indirect operations, i.e., those carried out through intermediaries, comply with tax and customs regulations. It is important to ensure that all fiscal obligations are fulfilled correctly.
• Tax Calculation Base: The company must comply with the calculation rules for taxes incurred in its import and export operations. This includes the correct calculation of import duties, ICMS (Tax on Circulation of Goods and Services), PIS (Program for Social Integration), COFINS (Contribution for Social Security Financing), and other applicable taxes.
• Origin of Goods: The company must ensure that imported or exported goods have their origin correctly declared, in accordance with the rules established by international agreements and treaties.
• Immunities, Tax Benefits, and Suspensions: It is important for the company to comply with the rules governing immunities, tax benefits, and tax suspensions applicable to its foreign trade operations. These fiscal advantages must be applied in accordance with current legislation.
• Professional Qualification: The company must have qualified and trained professionals to handle tax and customs issues related to its operations. This includes having personnel with technical knowledge and expertise in this area.
• Exchange Control: The company must comply with the rules and regulations of exchange control applicable to its international operations.

It is important to highlight that the AEO-C modality is exclusive to importers and exporters. Level 1 is not a prerequisite for Level 2, meaning that a company can directly seek certification in AEO-C Level 2, as long as it meets the criteria required for this category.

How to Obtain AEO?

The certification process for the AEO Program involves several stages that assess the company’s management process. This is done to minimize risks in foreign trade operations. The certification application is made through the AEO System, available on the Siscomex Single Portal on the Internet.

The process of obtaining AEO certification includes:

• Formalizing the AEO certification application;
• Meeting the admissibility requirements;
• Completing a self-assessment questionnaire.

The stages of the certification process are as follows:

1. Admissibility Requirements: These are mandatory requirements that must be met by the company to initiate the AEO certification process. If the company does not meet any of the items, the process is archived;
2. General Information: This includes data about the company’s foreign trade operations, among other information;
3. Eligibility Criteria: In this stage, the submitted information is evaluated by the Brazilian Federal Revenue to classify the operator’s reliability;
4. Specific Criteria: This includes additional information related to the requested modality (AEO-Security or AEO-Compliance) and the Brazilian Federal Revenue’s assessment for potential risks and compliance with requirements;
5. Physical Validation: This involves verifying the submitted information to form a conviction about compliance with the requirements and criteria of the AEO Program.

It is important to note that, due to the Covid-19 pandemic, virtual validations were used more extensively to complete pending requests, new requests, and revalidations.

What Are the Benefits of the AEO Program?

The AEO certification offers a range of benefits for both the certified company and foreign trade operations. Some of the key benefits include:

General AEO Benefits

• Publication of the certified company on the Federal Revenue’s website;
• Use of the “AEO” logo and the logo of the Brazilian AEO Program;
• Exclusive communication channel with the Federal Revenue for clarification of doubts related to the AEO Program and customs procedures;
• Priority analysis in another AEO modality;
• Benefits granted by foreign customs authorities of countries with Mutual Recognition Agreements (MRA);
• Participation in the Consultative Forum: The certified company can participate in proposing changes to legislation and customs procedures aimed at improving the Brazilian AEO Program;
• Waiver of requirements already met in the AEO: Customs clearance units of the Federal Revenue will waive the operator from requirements formalized in special customs regimes or applied in special areas that have already been met in the certification procedure of the Brazilian AEO Program;
• Participation in seminars and training sessions.

AEO-Security Modality Benefits

• Reduced percentage of inspection channels in exports compared to other exporters;
• Priority inspection of Export Declarations (EDs) selected for inspection;
• Exemption from providing guarantee for Customs Transit;
• Priority access of AEO carriers to Customs Warehouses.

AEO-Compliance Modality Benefits

• Response to fiscal classification queries within 40 days;
• Exemption from providing guarantee for Temporary Admission for economic use;
• Directly imported goods will receive priority storage treatment and will remain under the custody of the depository for customs clearance for 24 hours;
• Batch rectification requests allowed for importers certified as AEO (Coana ADE No. 17/2016).

AEO in the International Scenario

The AEO Program in Brazil has Mutual Recognition Agreements (MRA) with other countries. These agreements are established between the Customs of the involved countries, which have compatible AEO programs.

The main objectives of these agreements are:

• Mutual recognition of AEO certifications among countries;
• Priority treatment of goods and reduction of associated storage costs;
• Reciprocal commitment to offering comparable benefits;
• Transaction predictability;
• Improvement in the competitiveness of AEO companies in international trade.

Thus, a Brazilian company certified as AEO can enjoy benefits and facilities in countries with which Brazil has mutual recognition agreements. Some of the countries that have already signed agreements with Brazil are Uruguay, China, Mercosur, Bolivia, Peru, Mexico, and Colombia.

In the national scenario, as of June 2021, AEOs represented 26.03% in the quantity of registered declarations (import + export) and 25.28% in FOB value. This demonstrates the significance of the Program and its importance in making Brazilian companies increasingly prepared and capable for international trade, offering facilities that foster economic activities.

In summary, AEO certification is a powerful tool to boost Brazilian foreign trade, providing greater security, agility, and competitiveness to companies that choose to join the program. The international recognition obtained through mutual recognition agreements reinforces the prestige and reliability of authorized economic operators, solidifying them as excellent business partners in global trade.

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