E-commerce: the many problems of an omnipresent phenomenon
This edition of Customs NL inSight is written largely in the theme of e-commerce – a very current theme, certainly during these dark December days. And an area requiring special attention, which has given Customs plenty to do. The tasks of Customs also concern monitoring internet purchases from outside the EU – a veritable deluge of packages in all shapes and sizes, to which numerous fiscal and security risks are attached. But at the same time it is a goods flow that is sensitive to the smallest delay; if speed counts anywhere, it counts here. In a series of articles, we show in what way Customs will endeavour to maintain a grip on a steadily growing wave of cross-border postal and courier shipments without significantly disrupting trade. Moreover, we will speak about how the business community itself can contribute to this – certainly where it is also in their own interests. And we focus on the impending, major, European legislative amendments that will affect the international webshop sector.
The arrival of internet has caused revolutionary changes, not least in the shopping behaviour of consumers. Spending in webshops is steadily increasing worldwide, at the expense of the income of physical shops. A recent survey* showed that 90% of the Dutch order goods on the internet; 10% every week – clothing and accessories are their favourite. In the Netherlands alone, this form of retail trade is increasing by approximately 500 million Euros a year. Furthermore, online shopping has blurred the borders of countries and resulted in a global market; retailers increasingly operate internationally. The Dutch also order a lot of products from abroad, especially from the Far East. In a relatively short time, this trend has resulted in a massive supply of packages from all over the world. The peak is consistently around the national holidays.
Just like the goods arriving by sea or air freight, the flow of internet purchases entering the European Union is also subject to customs control. The impetuous growth of this modality also imposes increasing pressure on the control capacity of Customs. An additional difficulty is that e-commerce is characterised by logistical chains with a relatively high number of links. And of the many players involved, there are actually only two players who know what is actually in the box or bubble-wrap envelope: the person who ordered the product and the person who sold the product. This fact presents a problem to Customs, since neither of these parties submits the declarations to Customs. So some doubt about the correctness of the information provided – and so thus also about the content of the postal or courier shipment concerned – can be expected. Other than declared, the goods in question could easily be forbidden or at the very least require a permit. Or they could have a higher customs value than indicated, and therefore not be exempt from the payment of VAT and/or import duties…
In this publication, Han Bosch, Customs e-commerce strategic policy consultant and file coordinator, describes how his agency tries to tackle these types of problems in detail. Furthermore, we zoom in on specific issues associated with the new fulfilment business model, where as-yet-unsold goods are brought to the European Union and warehoused before being sold. And we look forward to the period from 1 January 2021, the day on which the new Brussels legislation regarding cross-border e-commerce takes effect. In particular, this must ensure fairer competition between physical shops within the EU and webshops abroad, and for a more balanced payment of VAT over the individual member states concerned.
* See the report ‘The State of Online Shopping’ (Trustly Group, 2018).