circular economy,  compliance e AEO

The legal nature of AEO between circular economy, compliance and environment protection

The AEO status represents an accidental and non-mandatory element of the customs obligation. This is given by the authorization which is the unique customs decision able to “defining and qualifying” its owner. Indeed, in this way the economic operator becomes reliable within the context of a participatory cooperation relationship with the customs administration.

The AEO authorization is an administrative deed released by the national customs entity/bodies in accordance with the EU regulations. This is valid throughout the EU customs territory and, if a mutual recognition agreement is valid, also with third countries; furthermore, despite being regulated in customs regulatory acts, it is important to highlight that it constitutes an authorization based on an overall evaluation of the structure and functioning of the object being requested. It therefore has an all-encompassing nature of the business complexity; the “complexity” covers all the processes which directly or indirectly impact on the compliance of the customs obligation.

Specifically, the AEO requires a number of checks, centered on the audit, including, as above mentioned, not only the purely customs aspects (such as the management of the symptomatic elements of the customs debt) but also the structural and subjective aspects of the applicant  which are substantiated in the possession of certain criteria in terms of the ability to control, monitor and react to the corporate structure in relation to the occurrence of harmful or potentially harmful events; in other words, the holder of the aforementioned authorization must demonstrate an adequate ability to control and correct his activities together with other requirements indicated by EU legislation and, in any case, attributable to the criterion of qualified care.

This authorization is, especially, based on the participatory cooperation  between the economic operator and the customs body.

The latter figure, in fact, is reliable because it owns an authorization that qualifies the economic operator as having an all-encompassing, global reliability based on its own qualified care which, in turn, requires continuous monitoring of the corporate functions of greater importance and constant attention to regulatory changes that impact corporate business; the development of the circular economy, of EU regulations such as the carbon border adjustment mechanism, the greater control powers regarding environmental sustainability are just some of the examples of legislation and legislative policies that must be taken into consideration in order to avoid damaging the criterion of compliance with customs legislation. In other words, the AEO is based on monitoring also characterized by knowledge of the legislation since its own qualified diligence requires adequate and qualified knowledge with respect to the commercial activities of the economic operator.

On the other hand the qualified care typical of the AEO represents not only a behavioral standard for the owner but even a characterizing element of the customs decision in question since it summarizes, in a transversal way, all the criteria envisaged by the article 39 UCC.

Finally, it is worth highlighting the following points of attention for, hopefully, an ongoing doctrinal and operational debate:

  • The AEO must be considered as a tool to simplify customs operations regardless of the size of its owner. Therefore, it would be interesting for the legislator to provide general facilitative rules for “small” and “medium” businesses, thus guaranteeing greater understanding of the institution;
  • The AEO is an authorization characterized by continuous monitoring which must be written, tracked and capable of providing solutions to problems that emerge from risk management in the company;
  • The AEO, due to its legal nature must adapt its architecture to the development of legislation; for example, it could be interesting to recall again the CBAM regulations and deforestation due diligence;
  • The legal nature of the AEO must be taken into consideration for the sanctioning aspects and for the management of administrative processes;
  • The reliability of the AEO must be based on the demonstration of adequate diligence which in turn is expressed in all the aspects indicated by the SAQ questions.