On the occasion of the European Commission’s call for feedback on the proposed Union Customs Code (UCC) Revision, Ecommerce Europe has submitted its consolidated position paper to show support for the European Commission’s ambition to strengthen the legal framework for customs and make it suitable to address the challenges that have emerged in the past years.
In particular, Ecommerce Europe welcomes the European Commission’s ambition to level the playing field between e-commerce within the EU and from third countries and introduce a more modern framework for customs that cuts down on the levels of fraud in the sector. One of the proposed measures consists in removing the customs duty exemption for goods valued up to €150. With regards to this proposal, Ecommerce Europe Ecommerce Europe would like to draw the attention on potential counter-effects that this removal could cause on several grounds.
Alongside the potential operational difficulties for businesses, especially SMEs, to pass from a simplified H7 declaration to a full H1 declaration, and the risk of other non-EU countries introducing similar or retaliatory measures which could hamper trade opportunities towards the EU, Ecommerce Europe raises also the point of the alignment with other existing legislations. In fact, an international framework for customs relief is already in place at the World Trade Organisation level, and Legal uncertainty between the EU and the global framework for taxation and customs could lead to loopholes and further unfair trading practices, exerting the opposite of fraud discouraging.
The alignment with other legislations or proposals in the EU is of utmost importance as it also includes the implementation dates between the UCC reform and the mandatory IOSS for marketplaces as part of the ViDA proposal. While the ViDA proposal suggests extending the deemed supplier regime and mandating an IOSS registration for marketplaces as of January 2025 (which comes with VAT collection responsibilities), the UCC customs reform proposes to apply the deemed importer regime as of 2028 (which comes with customs collection responsibilities).
Ecommerce Europe would like to point out that a 3-year gap between the implementation of these two massive changes could cause several compliance issues and mismatches for the electronic marketplaces which would fall under the scope of both legislations. In this case, Ecommerce Europe suggests aligning the implementation deadlines and considering a postponement in order to ensure a synchronised approach and application.
Another change introduced by the Customs reform proposal includes the establishment of a new Customs Authority and new partnerships between customs and businesses based on transparency and responsibility, such as the “Trust & Check” scheme. Ecommerce Europe welcomes this proposal, but also points out that the proposal should have provided more sufficient trade facilitation measures for businesses, in particular SMEs. Businesses who are not able to comply with the Trust & Check trader conditions will be confronted with the considerable administrative burden of having to deal with standard customs procedures.
As a last point, Ecommerce Europe supports the idea of increasing the sustainability of the e-commerce delivery sector by encouraging bulk shipments. However, Ecommerce Europe would like to point out that the European Commission has already proposed a substantial enabler in the ViDA proposal, which is the introduction of a Single VAT Registration (SVR) in the EU. A regime covering pan-EU inventory storage in e-commerce would encourage bulk inventory placements close to customers, which cause considerably lower CO2 emissions than orders individually shipped for long distances. Ecommerce Europe is a strong advocate of the introduction of the SVR concept to further strengthen the EU Single Market and remove blockers for cross-border trade.
Whether the objectives set by the Customs Reform will be achieved and whether newly introduced obligations are proportional for e-commerce actors will depend on a lot of operational details which are currently missing. We encourage the European Commission and EU countries to set up structural feedback mechanisms with impacted businesses early in the legislative process, to ensure the legislation is fit for purpose to achieve the desired results. Depending on the length of the legislative process, the 2028 timeline included in the proposal may need further extending to make sure businesses have sufficient time to prepare.
Download our full position paper here .