Brad Ashton

Written by:

Brad Ashton

Partner

Will AEO status protect businesses against Brexit customs changes?

  • June 2018
  • 3 minutes

The question of how goods will move between the UK and the EU in a post- world has cast a shadow over businesses for nearly two years. Yet, even with negotiations in full swing, we still have few answers. We know that the government wants frictionless trade with the EU to continue. What we don’t know is whether it will be able to pull this off. 

Pundits have continued to issue warnings about any changes to existing rules. And recent BBC-commissioned study showed just how sensitive the system could be: if vehicle inspections at ports were just two minutes longer, it would create a butterfly effect down UK motorways, leading to tailbacks of up to 29 miles long. This would have immediate repercussions for delivery times, productivity and bottom lines.

Businesses are now looking at ways to protect themselves. In recent months, attention has turned to the EU’s Authorised Economic Operator (AEO) programme. Introduced over a decade ago, it offers accredited businesses quicker access to certain simplified customs procedures and, in some cases, the ability to fast-track shipments through customs.

Under current arrangements, AEO businesses have few tangible benefits. One of them is almost certain customs clearance at the border, so goods can move smoothly, and quickly, into the EU. We don’t know if the AEO kite mark will give UK businesses these advantages after Brexit. But many are hedging their bets.

Before the EU referendum in June 2016, fewer than 350 UK businesses had been authorised for AEO status. That’s starting to change. Over the past two years, applications have nearly doubled to over 600. Many think AEO accreditation will shield them from many of the changes to the customs relationship between the UK and EU. But it’s important to recognise that this is not guaranteed.

So, should you apply for AEO status?

In some respects, you haven’t got much to lose. But it’s worth noting that the application process is drawn out and time intensive. It can take up to a year to get the information you need. Once the government has accepted your application, it then takes up to 120 days to issue the authorisation, sometime longer.

If you decide that it’s right for you, now is the time to do it. With negotiations continuing, we may soon have clarity on the UK’s future trading relationship with the EU. There’s a clear risk that after more than two years of waiting, businesses will not like the answer. If a worst-case scenario plays out, AEO application volumes will only increase, and with this, the time it takes to get accreditation will inflate significantly.

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