MCQs on Authorized Economic Operator (AEO) Scheme
Updated as on 05.10.2015
[For departmental use]
E-exercise
Book
On
Authorized
Economic Operator
(AEO) Scheme
NACEN, RTI, KANPUR (INDIA)
MCQs on Authorized Economic Operator (AEO) Scheme
Note:
In this e-Exercise Book, the reader can check his understanding and
knowledge about Authorized Economic Operator (AEO)
Scheme. Though all efforts have been made to make this exercise
book error free, but it is possible that some errors might have crept
into it. If you notice any errors or if you have any suggestion to
improve this exercise book, the same may be brought to our notice
through email on the e-mail addresses: rtinacenkanpur@[Link]
or goyalcp@[Link]. This may not be a perfect e-Exercise
Book and all are requested to assist us to make it better.
This e-Exercise book has been prepared with active assistance and
contribution by Shri Siddarth Jain, Shri Anand Prakash, and
Shri Abhay Singh Phalke, all IRS officers of 65th Batch. I
appreciate their participation and willingness to prepare e-exercise
book and to help fellow departmental officers in capacity building
and upgrading their knowledge.
Sd/-
(C. P. Goyal)
Additional Director General
NACEN, RTI, Kanpur
goyalcp@[Link]
NACEN, RTI, KANPUR (INDIA)
MCQs on Authorized Economic Operator (AEO) Scheme
SAFE Framework of Standards & Authorized Economic Operator Scheme
Take the following Quiz & Test your knowledge
Identify the most appropriate choice by choosing the correct option out of five
options given below.
[Link].1 Which of the following International Organization has
developed and adopted the SAFE Framework of Standard?
(a) World Trade Organization (WTO)
(b) World Customs Organization (WCO)
(c) United Nations (UN)
(d) Organization for Economic Cooperation and Development (OECD)
(e) European Union (EU)
[Link].2 In which year the SAFE Framework of Standards was
adopted by World Customs Organization?
(a) 2003
(b) 2004
(c) 2005
(d) 2006
(e) 2011
[Link].3 Which one or more of the following indicates the basic aims
of the SAFE Framework of Standards:
(a) To promote trade facilitation worldwide with integrated global supply chain
(b) To act as a deterrent to international terrorism.
(c) Secure Revenue Collections
(d) (a) and (b) above
(e) (a) (b) and (c) above
[Link].4 Which one or more of the following indicate the core
elements of SAFE Framework of Standards?
(a) Sharing of advance electronic information about inbound, outbound and
transit shipments.
(b) to employ a consistent risk management approach to address security threats
(c) Outbound inspection of high risk consignments being exported, preferably
using non-intrusive inspection method.
(d) Customs to provide benefits to businesses that meets minimal supply chair
security standards and best practices.
(e) All of the above.
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MCQs on Authorized Economic Operator (AEO) Scheme
[Link].5 As on date the SAFE Framework of Standards consist of how
many standards?
(a) 28
(b) 17
(c) 4
(d) 3
(e) 22
[Link].6 SAFE Framework of Standards deals with supply chain
management of goods by which one or more of the following
modes of Transports?
(a) Air transport
(b) Road transport
(c) Rail transport
(d) Transport by Sea
(e) All modes of transport
[Link].7 With regard to SAFE Framework of Standards, identify
which one or more of the following statements is correct?
SAFE framework aims to,-
(1) Establish Standards
(2) Provides integrated supply chain management for all modes of transport.
(3) Improve capability to detect high risk consignments
(4) To meet challenges and opportunities of the 21st Century
Out of the above, which one of the following is the right option:-.
(a) (1) above
(b) (2) above
(c) (1) & 2 above
(d) (1), (2) and (3) above
(e) (1), (2), (3) and (4) above
[Link].8 Which one or more of the following is/are the pillars of WCO
SAFE framework?
(a) Custom-to-Custom Pillar
(b) Customs-to-Business Pillar
(c) Customs-to-Other Government and Inter-Government Agencies Pillar
(d) (a), (b) and (c) above
(e) (a) and (b) above
NACEN, RTI, KANPUR (INDIA) Page 2
MCQs on Authorized Economic Operator (AEO) Scheme
[Link].9 Which of the following statement is not correct about the
Columbus Programme?
(a) The Columbus programme is capacity building initiative initiated by
WCO for it’s member countries.
(b) The aim of the Columbus Programme is full implementation of the
SAFE Framework of Standards and other WCO conventions and
Instruments
(c) The implementation of Columbus Programme consists of three
phases, namely, need assessment, planning & implementation; and
monitoring and evaluation.
(d) Diagnostic Mission carried out by WCO Capacity Building Experts is
part of third phase i.e. monitoring and evaluation phase of the
Columbus Programme.
(e) The development of project proposal and business case for submission
to stakeholders and potential donors is part of the Phase 2 of the
Columbus Programme.
[Link].10 Which one or more of the following statement is not correct
about AEO?
(a) It is a party involved in the international movement of goods.
(b) It is to be approved by or on behalf of a national Customs
administration as complying with WCO or equivalent Supply
Chain Security Standards.
(c) AEO may be a party involved in import or export of goods.
(d) Insurance company can also apply for grant of AEO Status.
(e) AEO may be party whose business is of custodian, or consolidator
or warehousing of goods, being imported or exported.
[Link].11 In India, which one of the following is the notified agency for
implementation of Scheme of Authorized Economic
Operator?
(a) The Directorate General of Human Resource Development
(DGHRD)
(b) The Directorate General of Central Excise Intelligence (DGCEI)
(c) The Directorate General of Inspection of Customs and Central
Excise (DGICCE)
(d) The Directorate General of Export Promotion (DGEP )
(e) The Directorate General of Revenue Intelligence (DGDRI)
NACEN, RTI, KANPUR (INDIA) Page 3
MCQs on Authorized Economic Operator (AEO) Scheme
[Link].12 The Business entity having an Authorized Economic
Operator (AEO) Status is considered to be of, …….. .
(a) Low risk
(b) High risk
(c) Moderate risk
(d) Illegal
(e) No risk
[Link].13 In India, in which year the scheme of Authorized Economic
Operator was first notified?
(a) 2008
(b) 2009
(c) 2010
(d) 2011
(e) 2015
[Link].14 Which one or more of the following types of Business entity
is eligible to acquire AEO status in India?
(a) An Importer
(b) An exporter
(c) Warehouse Owner
(d) Custom House Agent
(e) All of the above
[Link].15 The status of Authorized Economic Operator in any country
is granted by, -
(a) World Customs Organization (WCO)
(b) National Customs Administration
(c) National Police Agencies
(d) Trade Chamber
(e) Export Promotion Council
[Link].16 The essence of AEO programme is to promote and facilitate
(a) Business to Business partnership
(b) Customs to Business partnership
(c) WCO to Business partnership
(d) Cooperation among Custom formations within the country
(e) Customs to Other Government Agencies Cooperation within the country
NACEN, RTI, KANPUR (INDIA) Page 4
MCQs on Authorized Economic Operator (AEO) Scheme
[Link].17 Which one of the following is not eligible to apply for AEO
Status in India?
(a) Bank
(b) Insurance Companies
(c) Customs Consultants
(d) (a) and (b) above
(e) (a), (b) and (c) above.
[Link].18 Which one or more of the following are the conditions and
requirements taken into consideration before grant of AEO
status?
(1) Financial viability
(2) Demonstrated compliance with Customs requirement
(3) Satisfactory System for management of commercial record and appropriate
transport record.
(4) Maintenance of Approved Security and Safety standards.
Please identify the correct option.
(a) (1) & (2)
(b) (2) & (3)
(c) (3) only
(d) (1), (2) & (3)
(e) (1), (2), (3) & (4)
[Link].19 What are the benefits granted to an AEO in India?
(a) Reduced Bank Guarantee wherever applicable.
(b) Faster approvals and full/partial waiver from payment of fee.
(c) Reduced procedural requirements.
(d) Reduced examination norms for import and export cargo
(e) All of the above.
[Link].20 How much years of customs related business experience is
required for the business entity engaged in international
trade supply chain for getting AEO status?
(a) No experience required
(b) One year
(c) Two years
(d) Three years
(e) Five year
NACEN, RTI, KANPUR (INDIA) Page 5
MCQs on Authorized Economic Operator (AEO) Scheme
[Link].21 To obtain AEO status, the Business entity needs to be
registered with, which one of the following agencies?
(a). Directorate General of Inspection of Customs and Central Excise.
(b). Registrar of Companies
(c). Directorate General of Foreign Trade
(d). Income Tax Department
(e). VAT Department of State Government
[Link].22 Which one or more of the following can apply for grant of
AEO status?
(a) Anyone involved in the International Supply Chain
(b) Anyone undertakes Customs related activity
(c) Anyone who is engaged in selling of imported goods in domestic market
(d) Both (a) and (b)
(e) a), (b) and (c) above
[Link].23 In case of suspension of AEO status, which is the correct
option before the AEO status business entity?
(a) He can file appeal before Director General, Directorate of Inspection within
30 days of the decision of suspension and the Directorate General,
Directorate of Inspection is required to decide the appeal within a period of
30 days of receipt of appeal
(b) He can file appeal before Director General, Directorate of Inspection within
60 days of the decision of suspension and the Directorate General,
Directorate of Inspection is required to decide the appeal within a period of
30 days of receipt of appeal
(c) He can file appeal before Director General, Directorate of Inspection within
30 days of the decision of suspension and the Directorate General,
Directorate of Inspection is required to decide the appeal within a period of
60 days of receipt of appeal
(d) He can file appeal before Director General, Directorate of Inspection within
60 days of the decision of suspension and the Directorate General,
Directorate of Inspection is required to decide the appeal within a period of
60 days of receipt of appeal
(a) He can file appeal before Director General, Directorate of Inspection within
30 days of the decision of suspension. However, no period has been
prescribed for the Directorate General, Directorate of Inspection to decide
the appeal.
NACEN, RTI, KANPUR (INDIA) Page 6
MCQs on Authorized Economic Operator (AEO) Scheme
[Link].24 Which of the following is not required to be submitted by an
applicant for grant of AEO?
(a) Security plan
(b) Site plan
(c) Process map
(d) Business plan
(e) Self Assessment form
[Link].25 With which of the following country, India has signed
Mutual Recognition Agreement /arrangements?
(a) South Korea
(b) United States of America
(c) Hongkong
(d) Singapore
(e) Japan.
[Link].26 What is the Time line prescribed for grant of AEO status to
the applicant from the date of receipt of complete
Application form :
(a) Within 90 days
(b) Within 100 days
(c) Within 120 days
(d) Within 150 days
(e) Within 60 days
[Link].27 The Acronym “ISCM” stands for __
(a) Integral Supply Chain Mechanism
(b) Integrated Supply Chain Management
(c) Internal Statutory Compliance Mechanism
(d) Integrated Supply Chain Mechanism
(e) International Supply Chain Management
[Link].28 What are the key themes for Customs to Business Pillar?
(1) Partnership
(2) Security
(3) Manual Data Entry
(4) Strict Physical Control
(5) Technology, Communication and Facilitation
NACEN, RTI, KANPUR (INDIA) Page 7
MCQs on Authorized Economic Operator (AEO) Scheme
Out of the above, which one of the following is the right option:-.
(a) (1), (2),(3) & (5)
(b) (2), (3) & (5)
(c) (1), (2) & (5)
(d) (1), (2), (3), (4) & (5)
(e) (1), (4) & (5)
[Link].29 The AEO Programme Manager may suspend the Certificate
of AEO Status in the following cases:
(1) Where there is a reasonable belief that an act has been perpetrated
that is liable to lead to prosecution and /or is linked to a serious
infringement of Customs
(2) Where non-compliance with the conditions or criteria for the
Certificate of AEO Status is detected and no remedial steps have
been taken within 30 days thereof.
Out of the above, which one of the following is the right option:-.
(a) Only (1)
(b) Only (2)
(c) Both (1) and (2) above
(d) Neither (1) nor (2)
[Link].30 What is the purpose of signing Mutual Recognition
Agreement / Arrangements with other trading partner
countries?
(a) To avoid double taxation
(b) To mutually cooperate with each other in all customs matters
(c) To exchange import and export data on real time basis
(d) To mutually recognize the AEOs certification granted by
respective Customs Administration.
(e) To assist each other in capacity building programme on Trade
Facilitation Agreement
NACEN, RTI, KANPUR (INDIA) Page 8
MCQs on Authorized Economic Operator (AEO) Scheme
[Link].31 Carefully go through the following statements and find out
whether the same is True or False.
(i) Under AEO programme, an entity engaged in international trade
is approved by Customs as compliant with supply chain security
standards and granted AEO status & certain benefits.
[True/False]
(ii) Financial Solvency is an important eligibility criteria for AEO.
[True/False]
(iii) A mutual recognition agreement (MRA) is an international
agreement by which two or more countries agree to recognize one
another's conformity assessments of AEO.
[True/False]
(iv) AEO is a voluntary Programme and those business entities in the
global supply chain, who are interested in getting benefits of the
programme, may apply for authorization or certification as per the
procedure prescribed by the Government.
[True/False]
(v) The basic purpose of SAFE Framework of standards is to secure
and to facilitate International Trade.
[True/False]
(vi) SAFE Framework of Standards are based on four core principles
and three pillars.
[True/False]
(vii) Third Pillar of SAFE Framework Standards is based on the
concept of Coordinated Border Management and has been
incorporated in the SAFE Package in the year 2015.
[True/False]
NACEN, RTI, KANPUR (INDIA) Page 9
MCQs on Authorized Economic Operator (AEO) Scheme
ANSWERS OF MULTI CHOICE QUESTIONS (MCQs)
Q.
Sub-
Ques Answer
12. a 25. c
No.
tion 13. d 26. a
1. b 14. e 27. b
2. c 15. b 28. c
3. e 16. b 29. c
4. e 17. e 30. d
5. a 18. d 31. (i) T
6. e 19. e (ii) T
7. e 20. d (iii) T
8. d 21. b (iv) T
9. d 22. d (v) T
10. D 23. a (vi) T
11. c 24. d (vii) T
*******
NACEN, RTI, KANPUR (INDIA) Page 10
