The EU Plans to Do Away with its de minimis Customs Benefit: EFA is Greatly Concerned

EFA has held a meeting with our European colleagues at the Ecommerce Europe to discuss the new EU proposals on customs. The draft circulated by the European Commission proposes that the de minimus benefit, which was harmonised for all 27 EU states at 150 Euros in 2021, will be dropped. The de minimis rule allows imports into the EU of up to 150euros in value to be passed through customs without any duties imposed. It is particularly useful for small businesses and individuals selling low-value goods to the EU. There is little detailed paperwork required. Small businesses using their national posts or courier companies can therefore sell into the EU with the minimum of red tape. The EU, however, is concerned that some importers are under-valuing their parcels in order to slip through and that some importers, particularly from China, are abusing the system by sending multiple parcels through.

The EU also points out that most African products can be imported duty free under the various trade agreements, however, importing into the EU under these tariff-free agreements requires a lot of red tape – which is impossible for small ecommerce users. The Ecommerce Europe is presently preparing its views on the proposed EU customs system. EFA understands that most Ecommerce Europe members are in favour of keeping the de minimis rule. If that is the case Ecommerce Europe will cooperate with EFA on a PR plan to swing the EU’s opinion via articles in the press and support from European Parliamentarians. We will continue to report on developments over the next months.

For those readers interested in the EU proposals here is a link –  EU Customs Reform (europa.eu)

This issue is tied up with the benefits given under the Universal Postal Union (UPU) agreement on “terminal dues”. Postal operators from developing countries pay small terminal dues to developed countries’ postal operators. The UPU sets a percentage of the postal cost (the stamp value) for all mail (letters, packages or parcels) sent from one country to the other. The receiving country therefore receives an amount for sorting and delivering mail from the postal service of the country of origin. In the case of a developing country sending mail to a developed country there is an agreement to ‘subsidise’ that incoming mail by charging a very low amount to the country of origin. As cross-border ecommerce deliveries grew between China and the USA and EU in the 2010s, Chinese ecommerce companies benefited because China was considered to be a developing country. The US Post lost money on each delivery of Chinese goods and complained to the then US President, Mr Trump, who threatened to withdraw from the UPU unless the situation was rectified. This lead to a new classification of “developing country” at the UPU, however, we need to be aware that there is a feeling, particularly among US Republicans, that ecommerce mail from developing countries enjoy too many benefits.

Meanwhile,  our colleagues at Ecommerce Europe and its members are actively contributing to the European Union’s policymaking process to deliver a simplified and modernised VAT system in the EU. In response to the European Commission’s call for feedback on the proposed VAT in the Digital Age (ViDA) legislation, Ecommerce Europe has submitted its consolidated position to show support for the EU’s efforts to address the shortcomings of the VAT Ecommerce Package, and for suggesting recommendations and improvements to the new set of rules introduced.