End-to-end customs transformation for a processing company: from inward processing authorization to AEO status and simplifications

Gentherm Ukraine LLC, part of Gentherm, a global leader with extensive experience in advanced thermal management technologies, climate comfort systems, thermal control solutions, automotive cable systems, and products for other industries, turned to us for expert support. 

As a processor, the company manufactures products using a broad range of components that were under customs control. The transition to the new regulatory model required a carefully structured transfer of remaining goods from the previous permit to the new authorization, without involving third-party customs warehouses or creating additional financial pressure. 

With this in mind, the company made a strategic decision to move toward a more advanced model of interaction with customs authorities by obtaining AEO-C status and the relevant simplifications. This approach required comprehensive preparation of both operational and control processes.

We carried out an in-depth review of the company’s operating model, including processing and production processes, customs formalities, internal control systems, and accounting in information systems. Based on the findings of this review, we developed a shared view of the company’s needs and a comprehensive approach that enabled several interconnected initiatives to be coordinated without creating risks to the continuity of production processes. 

The priority was to obtain authorization to place goods under the inward processing customs procedure in Ukraine, while simultaneously preparing to obtain AEO-C status and authorizations to use simplifications. Our team organized the project work in a synchronized way, as this was critical given the tight timeline for implementing the new authorization model and the specifics of the company’s operations. 

During the project, we proposed a phased solution that first involved temporarily extending the existing inward processing permit to secure time for obtaining the necessary authorizations and lawfully using the customs warehouse procedure directly at the company’s own production site. The relevant solution was approved by the customs authority, allowing the company to avoid moving goods to public customs warehouses and incurring additional costs for storage, transportation, and related logistics operations. 

As part of preparing the company to obtain inward processing authorization in the customs territory, we provided end-to-end support in organizing the process and aligning operations with the requirements of the authorization model. In particular, we helped structure the processing operating model, streamline accounting and documentation approaches, including the identification of goods with foreign customs status and control over their movement. The measures implemented helped ensure an appropriate level of operational control and prepare the company for successfully obtaining the relevant authorizations. 

In parallel, our team provided comprehensive support to the company in the project to obtain AEO-C status and authorizations to use simplifications. This included assessing whether internal processes met customs law requirements, providing recommendations for improvement, and supporting the documentation of the necessary procedures in line with customs requirements. A key outcome was the ability to obtain certain simplifications later through a simplified procedure by offsetting the relevant criteria.

The result of this comprehensive work was that Gentherm Ukraine LLC obtained authorization to place goods under the inward processing customs procedure in Ukraine, AEO-C status, and authorizations to use simplifications. The model developed enabled the company to manage the transition to the new regulatory environment effectively, maintain continuity of processing operations during the transition period, optimize customs and logistics processes, reduce the financial burden, optimize costs related to goods storage, and improve the predictability of interaction with customs authorities. The tools obtained created a sustainable foundation for the company to operate effectively as a high-tech processor under the updated customs regulatory framework.