European Commission ‘toolbox’ for safe and sustainable e-commerce

The European Commission (EC) recently published a Communication with plans for making the e-commerce sector safer and more sustainable. These plans require finetuning before further implementation is discussed. Our experts discuss the key elements of the new EC ‘toolbox’.

 At least 70% of all Europeans regularly purchase products online. Every day, an average of 12 million small items arrive in the EU, often from China. Overall, total e-commerce trade flows have more than tripled since 2022.

But this growth presents significant challenges. For example, many of the products are unsafe and violate EU consumer protection laws. The short life cycle of certain products has severe environmental and climate-related consequences. Counterfeiting continues to be an issue, as does failure to comply with (tax) regulations. Overall, these challenges significantly impact EU competitiveness as well.

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. Proposed initiatives such as ViDA and Customs reforms underline this continued commitment. 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.

Do you have any questions about the Commission’s toolbox? Or would you like to discuss the potential impact on your business? Please contact our VAT & Customs specialists Marisa Hut or Stevie Mols.

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.