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Authorised Economic Operator (AEO) Program

29th April, 2024 Economy

Authorised Economic Operator (AEO) Program

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  • The Centre has extended Authorised Economic Operator (AEO) status to the gem and jewellery sector, as announced by the Gem & Jewellery Export Promotion Council (GJEPC).

Authorised Economic Operator (AEO) Program


  • The AEO is a programme under the World Customs Organisation (WCO) SAFE Framework of Standards to secure and facilitate global trade.


  • The AEO programme, initiated in 2011 by the Customs department, aims to simplify export operations across various sectors, facilitating ease of doing business and resulting in significant time and cost savings for exporters.


  • The aim is to enhance international supply chain security and facilitate movement of legitimate goods.

Objective of AEO Programme:

  • Aligned with the World Customs Organisation (WCO) SAFE Framework of Standards, the AEO programme aims to enhance international supply chain security and facilitate the movement of legitimate goods.


  • Under this programme, an entity engaged in international trade is approved by the Customs as compliant with supply chain security standards, and granted AEO status and certain benefits.

India’s AEO Programme

  • India’s AEO Programme is in sync with the commitments made under Article 7.7 of WTO Trade Facilitation Agreement (TFA).
  • AEO is a voluntary compliance programme.
  • It enables the Indian Customs to enhance and streamline cargo security through close cooperation with the principal stakeholders of the international supply chain importers, exporters, logistics providers, custodians or terminal operators, custom brokers and warehouse operators, according to the Central Board of Indirect Taxes (CBIC).

Benefits for Gem and Jewellery Industry:

  • The extension allows units within the gem and jewellery industry to apply for participation in the AEO programme, enabling them to avail associated benefits.


  • The extension of AEO status to the gem and jewellery sector signifies a significant step towards enhancing trade facilitation and security in the industry, fostering greater efficiency and competitiveness.

SAFE Framework of Standards to Secure and Facilitate Global Trade

At the June 2005 World Customs Organization Council Sessions in Brussels, members adopted the SAFE Framework of Standards to Secure and Facilitate Global Trade. This international instrument introduced a novel approach to managing goods across borders, emphasizing the crucial partnership between Customs and business. Over time, the Framework has evolved to address emerging developments in the international supply chain, incorporating provisions such as Authorized Economic Operators (AEO), Coordinated Border Management, and Trade Continuity and Resumption.  The SAFE Framework was updated again in 2021. This latest version strengthens cooperation between Customs and Other Government Agencies, promotes the use of smart security devices for enhanced monitoring, and includes provisions for regional Customs union AEO programs and mutual recognition. Furthermore, the updated Framework aligns air cargo security data with the WCO's Data Model and streamlines reporting mechanisms, reinforcing its commitment to fostering a secure and facilitative international trade environment.

Gem & Jewellery Export Promotion Council (GJEPC)

The Gem & Jewellery Export Promotion Council (GJEPC) is a Government of India (GOI) organization established to promote the Indian gem and jewellery industry and its products. Founded in 1966 by the Ministry of Commerce and Industry, it operates as the apex body for the industry, representing nearly 7,000 exporters. The GJEPC gained autonomous status in 1998 and is headquartered in Mumbai, with regional offices in New Delhi, Kolkata, Chennai, Surat, and Jaipur. The Council advocates industry issues to the Government and advises on policy interventions. Additionally, it has set up Common Facility Centers (CFCs) in Gujarat, offering services like diamond processing and cutting. The GJEPC also manages educational institutes, including the Indian Institute of Gems & Jewellery (IIGJ) in Mumbai, Jaipur, Delhi, Varanasi, and Udupi, along with the Indian Diamond Institute in Surat. Furthermore, it operates gemological laboratories such as the Gemmological Institute of India (GII) in Mumbai and the Gem Testing Laboratory in Jaipur, catering to the industry's testing and certification needs.

WTO Trade Facilitation Agreement (TFA)

The Trade Facilitation Agreement (TFA), confirmed in Bali, Indonesia in December 2013 at the Ninth Ministerial Conference, represents a significant milestone in global trade governance. Following nearly two decades of negotiations, the agreement was formally presented to the 160 members of the World Trade Organization (WTO) on December 27, 2014, marking an unprecedented multilateral effort since the inception of the WTO in 1995. However, the agreement will only be ratified once 2/3 of the members have informed the WTO of their agreement. The TFA aims to streamline the complex procedures governing international trade, with a primary focus on delivering tangible benefits to both developed and Least Developed Countries (LDCs). Projections suggest that implementation of the TFA could reduce trade costs by an average of 14.5%, potentially adding up to one trillion dollars to global trade. This reduction in bureaucratic barriers is particularly advantageous for small and medium-sized enterprises, facilitating their integration into global value chains. Notably, the agreement introduces a novel principle whereby the commitments of developing and LDCs to implement TFA provisions are contingent upon their acquisition of necessary technical capacity, ensuring a more equitable and effective implementation process.

The Trade Facilitation Agreement has three sections:

Section I: Provisions for expediting the movement, release, and clearance of goods, as well as customs cooperation, improving articles of the General Agreement on Tariffs and Trade (GATT) 1994.

Section II: Special and differential treatment (SDT) provisions for developing and least-developed countries (LDCs), allowing them to determine implementation timelines based on technical assistance and capacity building support. Categories include A (immediate implementation), B (transitional period), and C (requiring assistance).

Section III: Establishment of a permanent committee on trade facilitation at the WTO, mandating national committees for domestic coordination and implementation of TFA provisions, along with final provisionsTop of Form.


Q. Which of the following statements about the Trade Facilitation Agreement (TFA) is/are correct?

1.The TFA was confirmed in Geneva, Switzerland, in December 2013.

2.The ratification of the TFA is contingent upon 2/3 of WTO members informing the organization of their agreement.

3.India is yet to ratify WTO TFA.

4.Section II of WTO TFA contains special and differential treatment (SDT) provisions for developing and least-developed countries (LDCs).

Choose the correct code.

A)  1 and 3 only

B) 2, 3 and 4 only

C) 2 and 4 only

D) 4 only

Answer: B) 2, 3 and 4 only