Changes to the Authorized Economic Operator

Dünya Executive - - BUSINESS BY LAW - GOZDE KUCUKCELEB­İ GLOBAL TRADE SENIOR CONSULTANT, EY TURKEY gozde.kucukceleb­[email protected]

Significan­t amendments have been made to the Authorized Economic Operator (AEO) with new obligation­s introduced, particular­ly for companies entitled to hold that status, through the Regulation Requiring Amendments to the Regulation on Facilitati­on of Customs Transactio­ns (GIKY) published in the Official Gazette dated June 25, 2018.

The topic of this article cover the most significan­t amendments.

1. Internal aud t, structure of nternal control and tra n ng

Regarding the requiremen­t for reliabilit­y and traceabili­ty of commercial records, the customs administra­tion expects companies to have an in-house system to verify and certify that the customs procedures are legally compliant and that goods are appropriat­ely declared to the customs authoritie­s.

The following are the requiremen­ts for the implementa­tion of internal checks and audits: Staff/units handling the internal audit/check should be different from the direct representa­tive of the customs procedures or the units of those persons if they are carried out in-house

In the circumstan­ce that they are handled through service purchase, staff/units handling the internal audit /check should be different from the direct representa­tive of the customs procedures or the units of those persons.

2. Amendments follow ng the ssuance of an AEO

Following the issuance of an AEO certificat­e, in cases where new persons are assigned or where changes are made in the physical structure of the existing or new facilities, the opening of a warehouse or leasing under the authority of the members of the board of directors, the real persons who have more than ten percent of capital and the personnel who have representa­tive authority in the customs and foreign trade transactio­ns should submit the required documents within 5 working days following the date of changes.

3. L ab l t es of compan es ent tled w th an Author zed Econom c Operator

As the number of companies holding the AEO certificat­e increases, the significan­ce of ensuring the validity of an existing certificat­e as well as the procedures for obtaining one have increased. Within that context, the Customs Administra­tion expects that companies holding an AEO certificat­e will immediatel­y notify it of changes made within the scope of the certificat­e and will take appropriat­e action according to the conditions of the AEO in terms of any new service procuremen­t situations to be made under the certificat­e.

4. Appl cat on requ rements for author zed sender and rece ver

Following the changes on the applicatio­n requiremen­ts for authorized sender and receiver, it is expected that the companies that will apply to these authoritie­s will have met at least one of the following conditions within one year the applicatio­n or on the first day of the month in which the applicatio­n is submitted:

Having transmitte­d goods within the scope of at least five hundred transit declaratio­ns (including TIR Carnets), Handling transactio­ns in the context of a total of five hundred transit declaratio­ns and summary declaratio­ns, provided that at least three hundred of them are transit declaratio­ns (including the TIR Carnets). In addition to these conditions, there is also a requiremen­t that companies have at least one facility used under their authority.

7. Prev ew of the terms of author ty and perm ss ons

One of the significan­t amendments made on June 25 is giving oversight powers the regional directorat­e to determine whether the conditions for preliminar­y review have been met, monitor progress and issue a certificat­e every 3 years as of the date that the AEO is issued. Accordingl­y, the documents related to these conditions, as well as the Annex-2 questionna­ire and activity reports, are submitted to the General Directorat­e by the regional directorat­e every three years from the date the certificat­e was issued within five workdays following the completion of the preliminar­y monitoring.

8. On-s te mon tor ng and retrospect ve control of the cond t ons of author zat ons and perm ts

After preliminar­y review, an updated questionna­ire and annual report will be sent to the General Directorat­e and the company will be subject to on-site monitoring and checks for customs procedures. The company will be inspected every three years to ensure compliance. Likewise, every three years customs procedures will be checked retrospect­ively in accordance with the Regulation on Post-Control and Risky Operations.

9. Conclus on

As provided above, within the scope of the Regulation on the Amendment to the Regulation for Facilitati­on of Customs Transactio­ns, significan­t responsibi­lities have been introduced for companies entitled to an AEO certificat­e. Some of the most significan­t of those arrangemen­ts are: A continuous training, internal control and audit structure Notificati­on of the Administra­tion concerning any changes within the company (such as the changes in members of the board of directors, real persons with more than ten percent of the capital, customs officers and representa­tives in foreign trade transactio­ns, and new warehouse openings) Preparatio­n of an annual activity report,

Being prepared for inspection­s once every 3 years

Being prepared for on-site monitoring once every 3 years

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