The National Board of Revenue (NBR) is set to introduce the Authorised Economic Operator (AEO) system on February 5, aiming to streamline import and export processes by providing a seamless clearance system for businesses.
Under this system, AEO-certified businesses will be able to directly transport cargo from ports to their factories or warehouses through a green channel without undergoing physical inspections.
This will significantly reduce clearance time, lower costs, and improve overall efficiency in trade operations.
According to NBR sources, the revenue authority has been working on implementing the AEO system for a long time. Compliant taxpayers will self-declare their tax status and conduct their own assessments before applying for AEO certification.
A senior NBR official stated that the board has already issued 14 AEO certifications, with several more applications under review. The approved companies include: Popular Pharmaceuticals, Jihan and Shoeniverse Footwear, Fair Electronics, ACI Godrej Agrovet Private, Towa Personal Protective Device Bangladesh, Cutting Edge Industries, Omera Cylinders, MBM Garments, M/S Footsteps Bangladesh, GHP Ispat and BSRM.
The NBR formulated the rules for this system in June last year and finalised the operational procedures in December. Additionally, it has upgraded its digital infrastructure to facilitate AEO operations.
During a recent event on World Customs Day, NBR Chairman M Abdur Rahman Khan stated that once the system is introduced, compliant taxpayers will no longer face interventions from Customs authorities.
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“The imported goods will be directly delivered to their premises from vessels under the self-assessment system,” he said.
He also mentioned that tax payments will be made through bank-to-bank fund transfers.
The AEO system also provides international benefits if reciprocal agreements are in place with other countries, allowing certified businesses to enjoy similar privileges abroad.
Introduced by the World Customs Organization in 2007, the AEO system aims to enhance global supply chains and expedite trade. Countries such as the US, the European Union, Japan, Singapore, India, and China have already adopted the system. India, for example, has more than 5,000 AEO-certified businesses.
Bangladesh initially planned to introduce the AEO system in 2013, and its implementation became mandatory after two-thirds of World Trade Organization (WTO) members ratified the Trade Facilitation Agreement. In 2018, the NBR issued an official order, and in 2019, Square, Beximco, and Incepta Pharmaceuticals were granted AEO status.
A 2022 NBR study on port clearance processes found that 72 to 78 percent of clearance time is spent on collecting and submitting import documents, highlighting the need for automation in trade facilitation.
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Currently, the NBR’s Customs Valuation and Internal Audit Commissionerate is reviewing applications from nearly 60 companies seeking AEO certification.
According to the rules firms that want to be listed as AEOs must have an authorised capital of at least Tk 30 crore and paid-up capital of Tk 10 crore.
Moreover, they must have a minimum annual turnover of Tk 10 crore for three years in a row.
If the firm is not into manufacturing, their annual export or import must be of at least Tk 10 crore for three years in a row.
However, the revenue board has included some criteria enabling small and medium enterprises (SMEs) alongside logistics operators to avail the status.
One criterion for the SMEs says they must have conducted 20 annual shipments on an average over the past three years whereas another for logistics operators say they must have run operations in Bangladesh for the past four years.
According to the rules, all companies will have to ensure at least 70 percent of transactions through formal channels like banks and mobile financial services.
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Interested companies must have operations of at least five years and clean records in duty, VAT and income tax payments.
The inclusion of SMEs and logistics operators in the AEO framework is expected to further facilitate trade and enhance business efficiency in Bangladesh.