• CCI AD FROM 5th April 2021

Special measures to facilitate MSME for AEO-T1 & T2 accreditation

Circular No. ES/403/2020-21                                                        16th January, 2021

To: Members of the Council

Sub: Special measures to facilitate MSME for AEO-T1 & T2 accreditation

Dear Member,

Air Cargo Complex has issued Public Notice No. 5/2021 dated 14th January, 2021 about special measures to facilitate MSME for AEO-T1 & T2 accreditation.

Kind attention is invited to CBEC Circular No. 33/2016 dated 22.7.2016, as amended and Circular No. 54/2020-Customs dated 15.12.2020 issued by Central Board of Indirect Taxation & Customs. The Board has decided to relax the entire gamut of compliance and security requirements for MSMEs. The relaxation has been carried out to ensure that the MSMEs are facilitated through rationalized compliance requirements (MSME Annexure 1 & 2) and minimum but effective security requirements (MSME Annexure 3).

Accordingly, the Board has decided to facilitate MSMEs by further relaxing the current accreditation process and reducing the compliance burden for the AEO accreditation. The procedural modifications/ relaxations for AEO accreditation of MSMEs are as under –

  1. The eligibility requirement of handling a minimum of 25 documents during the last financial year has been relaxed to 10 documents, subject to handling at least 5 documents in each half year period of the preceding financial year.

  2. The requirement for the applicant to have “business activities for at least 3 financial years preceding the date of application” has been relaxed to 2 financial years.

  3.  The qualifying period for legal and financial compliance has been reduced from ‘the last 3 financial years’ to the last 2 financial years.

  4. For AEO T1 and T2 accreditation, the present annexures (Annexures A, B, C, D, E1- E4) have been supplanted with two annexures viz. MSME Annexures 1 and 2.  Similar rationalized annexures 1 and 2 are presently being utilized for AEO T1 accreditation only in accordance with the CBIC Circular No. 26/2018-Customs dated 10th August, 2018.

  5. For AEO T2 certification, the present annexures (Annexures E.5.1- E.5.7) for physical verification have been rationalized to a single annexure viz. MSME Annexure 3. The rationalization has been carried out to ensure that the security requirements for an MSME are objective and cover the minimum verifiable security criteria.

  6. The time limit for processing of MSME AEO T1 & T2 application has been reduced to 15 working days (presently 1 month) and 3 months ( presently 6 months) respectively after the submission of complete documents for priority processing by customs zones.

  7. The benefit of relaxation in furnishing of Bank Guarantee for AEOs has been further relaxed to 25% from 50% and 10% from 25% of that required to be furnished by an importer/ exporter who is not an AEO certificate holder, for MSME AEO T1 and MSME AEO T2 entities respectively.

The aforesaid relaxations shall apply only to an applicant who has a valid MSME Certificate from the line-Ministry. Further, the approved MSME must ensure their continuous MSME status during the validity of its AEO certification, if granted.

Thus, the AEO accreditation for MSMEs now requires submission of only two annexures for AEO T1 and three annexures for AEO T2 applicants respectively. Annexures 1 & 2, two common annexures for AEO T1 and T2 are MSME Annexure 1 (General Compliance), MSME Annexure 2 (Legal, Managing Commercial Records and Financial Solvency Compliance). Further, the third annexure for AEO T2 is MSME Annexure 3 (Safety and Security Requirements). These annexures have been designed to fulfil the aspirations of simpler application procedure with reduced documentation requirement for AEO accreditation of MSMEs.  

In case of any difficulty, members may kindly contact the Deputy/ Additional Commissioner of Customs (PRO), Import, Air Cargo Complex, Mumbai (proaccsahar@gmail.com / 022-26816696).

Members may make a note of the above.

Thanking you,

Yours faithfully,

S.BALARAJU
EXECUTIVE DIRECTOR