The EU publishes its plan for safer and sustainable e-commerce

Earlier this year, the European Commission (EC) published a Communication outlining its plans with the goal of making the e-commerce sector safer and more sustainable. The plans outline the urgent customs reform and the need for coordinated enforcement actions to combat the surge in e-commerce imports. Our experts discuss the key elements of the new EC 'toolbox'.

The communication provides statistics that confirm the significant increase in e-commerce imports into the EU, with 70% of Europeans regularly purchasing products online. Every day, an average of 12 million small items arrive in the EU, often from China. This is an increase of 230% since 2022 with an average of 12 million small item imports per day (or 8,333 items per minute!).

However, this growth presents significant challenges. Many products are unsafe and violate EU consumer protection laws. The short life cycle of certain products has severe environmental and climate-related consequences. Counterfeiting remains an issue, as does non-compliance with (tax) regulations. These challenges significantly impact EU competitiveness.

Targeting non-compliant e-commerce companies

The EC proposes a ‘toolbox’ to address these issues. The toolbox includes a number of measures, such as:

• Following previous legislative initiatives in 2023, the Commission urges the EU Council to swiftly adopt new customs legislation for the establishment of an EU Customs Authority and an EU Customs Data Hub. These should aid the regulation of e-commerce flows from non-EU countries. The legislation proposed earlier includes plans for eliminating the current €150 import duty exemption for small consignments.

• The Commission proposes the introduction of a ‘handling fee’ for imported e-commerce items sent directly to consumers. The fee would be collected from the importer (e-commerce retailers and intermediaries) rather than the consumer, and is levied to help cover the costs of compliance supervision by authorities.

• The plans also include a range of new sustainability regulations, such as a Circular Economy Act, and calls for the swift adoption of (revisions for) existing initiatives for matters such as waste management, recycling, and encouraging environmentally friendly product design.

European developments continue to unfold

The EU remains focussed on digital developments and regulating e-commerce. The European Commission’s toolbox program is intended as a ‘holistic’ approach to tackling the current challenges in e-commerce.

How can you prepare for the new e-commerce rules?

Since the proposed approach contains plans that must first pass through the EU’s legislative process, it remains uncertain whether all aspects will be implemented as envisaged by the European Commission.

However, as this proposal coincides with many other initiatives, businesses in the e-commerce sector are advised to take note of these developments. Legislative developments may significantly impact compliance obligations, supply chain optimisation and future business strategies.

The legislation and regulations in this area may be subject to change. We recommend that you discuss the potential impact of this with your Baker Tilly advisor.