Low-cost internet retailers

Retail presents action plan against Temu and Co

Among other things, the trade association is calling for the duty-free limit to be reduced to zero euros.

(Bild: AP)

Cheap products from China are flooding the European market via "Quick Commerce" platforms. According to the trade association, the customs authorities are overwhelmed, as the lobby group announced in a press release on Wednesday. An eight-point action plan for fairness in digital trade aims to improve the situation. For example, the duty-free limit is to be reduced to zero euros, i.e. de facto dropped.

"Up to 35 air freight flights a day from China are overburdening the customs authorities," says the trade association. The customs authorities are therefore unable to guarantee the necessary controls. In addition, there are incorrect declarations, poor data quality and complaints due to a lack of product safety. In addition to lowering the duty-free limit to zero euros, the association is calling for more resources and more staff as well as improved data exchange.

Over the past 18 months, Chinese platforms have implemented the new "direct eCommerce" business model, which emerged during the coronavirus pandemic in China, in cross-border retail. Consumers are connected directly with manufacturers and suppliers of products and delivery is organized "on demand". The products on offer are only finished once they have been ordered.

Neither intermediate warehouses nor wholesalers or middlemen are necessary, explained Rainer Will, Managing Director of the trade association. While domestic consumption in the People's Republic of China is now weakening, this model is being rolled out worldwide. The end consumer price (including shipping costs) is 30 to 40 percent lower than that of comparable European products.

"Gaps in customs law deliberately exploited"
Current EU law is often poorly enforced, criticized Will. At the same time, "loopholes in customs law are deliberately exploited", with Austrian trade and its more than 700,000 employees suffering as a result. The EU had already adapted the rules for low-value consignments (up to 150 euros) around ten years ago.

The following applies to all consignments: Advance data including clear identification of the supplier, the recipient and the tax debtor are mandatory. Buyers would have to pay import sales tax, but customs duty would only be payable on goods worth 150 euros or more.

Eight-point action plan presented
The following next steps are necessary for the enforcement of customs law to arrive in the digital age:

• the mandatory collection of import VAT for cross-border B2C goods shipments below a goods value of 150 euros when purchased via platforms,
• the mandatory advance dispatch of a standardized e-invoice as part of the data set for the electronic customs import declaration,
• standardized UID numbers to adjust digital reporting obligations throughout the EU for direct and indirect charges,
• a reduction in the customs threshold for B2C goods shipments from 150 to zero euros,
• a simplification of tax rates in the EU,
• data harmonization of postal transport documents,
• the digital identification of operators along the entire goods management and delivery chain
• and the creation of a digital customs data platform in the EU to ensure real-time data exchange on retail movements in the Union.