Association of European Public Postal Operators

Published by POSTEUROP Brussels, 7 November 2023 Transparency register ID: 092682012915-24 Position on the EU Customs Reform Ref. Ares(2023)7555259 - 07/11/2023 ABOUT POSTEUROP POSTEUROP is the association which represents European public postal operators. It is committed to supporting and developing a sustainable and competitive European postal communication market accessible to all customers and ensuring a modern and affordable universal service. Our Members represent 2 million employees across Europe and deliver to 800 million customers daily through over 175,000 counters. posteurop.org | ©PostEurop Association of European Public Postal Operators AISBL Boulevard Brand Whitlock 114 1200 Brussels Belgium T: + 32 2 761 9650 E: [email protected] POSTEUROP | Position on the EU Customs Reform 3 CONTEXT PostEurop is the trade association that has been representing European public postal…

Reform 3 CONTEXT PostEurop is the trade association that has been representing European public postal operators since 1993. PostEurop is also an officially recognised Restricted Union of the Universal Postal Union (UPU). It is governed by a Board of Directors, which is responsible for supervising and monitoring the implementation of the Association's strategy at operational level.

…is responsible for supervising and monitoring the implementation of the Association's strategy at operational level. PostEurop supports the ongoing consideration of the future of customs and modernisation of the EU legislative and regulatory framework in this area1 and would offer a contribution to the legislative deliberations on: • The Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL establishing the Union Customs Code and the European Union Customs Authority, and repealing Regulation (EU) No 952/2013 [COM (2023) 258 final]; and • The Proposal for a COUNCIL REGULATION amending Regulation (EEC) No 2658/87 as regards the introduction of a simplified tariff treatment for the distance sales of goods and Regulation (EC) No 1186/2009 as regards the elimination of the customs duty relief threshold [COM (2023) 259 final].

(EC) No 1186/2009 as regards the elimination of the customs duty relief threshold [COM (2023) 259 final]. Mission of customs authorities [Article 2 of COM (2023) 258 final] The Proposal does not acknowledge the differentiated nature of State-designated Universal Service Providers (“USPs”) within the EU, operating as part of a single global postal territory, governed by the UPU. Moreover, the Proposal makes no reference to the differentiated nature of postal traffic, at all. This presents clear challenges for citizen-to-citizen postal traffic from 3rd countries, particularly in view of the ongoing humanitarian migration flows occurring due to global security and climate challenges.

…in view of the ongoing humanitarian migration flows occurring due to global security and climate challenges. This is a marked departure from the original COMMISSION DELEGATED REGULATION (EU) 2015/2446 of 28 July 2015, supplementing Regulation (EU) No 952/2013 of the European Parliament and of the Council as regards detailed rules regarding certain provisions of the Union Customs Code, which under Recital 6 explicitly acknowledges the differentiated nature of postal 1 European Commission initiative ‘Revision of the Union Customs Code’ traffic and citizen-to-citizen flows, including postal items sent by private individuals and expressly recognised the need to ensure citizen-to-citizen access to the single global postal territory.

…and expressly recognised the need to ensure citizen-to-citizen access to the single global postal territory. To address this gap, there is a need to acknowledge the differentiated nature of State-designated USPs in the future, to ensure citizen-to-citizen access to the single global postal territory, as per Article 8 of Universal Postal Convention which states any security measures applied in the international postal transport chain “must be implemented without hampering worldwide mail flows or trade by taking into consideration the specificities of the mail network.” These rights are also enshrined in the EU Charter on Fundamental Rights (Article 36) which recognises the right of EU citizens to services of general economic interest, and indeed a consumer’s rights to privacy and family life. In our view, this could be achieved by adding a further subsection to Art.

…rights to privacy and family life. In our view, this could be achieved by adding a further subsection to Art. 2 of COM (2023) 258, after sub-section (e), to firstly recognise the differentiated nature of postal flows and secondly, to include a legislative provision that provides for greatly simplified customs systems to reflect the differentiated nature of postal traffic. It is essential that this is given legislative expression, in the empowering Regulation.

…nature of postal traffic. It is essential that this is given legislative expression, in the empowering Regulation. In our view, significant, proactive and intensive engagement is required on the part of the European Commission prior to the publication and finalisation of draft delegated and implementing legislation relating to the recast of the Union Customs Code, in order that key concerns are verbalised, understood and worked through in a productive and efficient manner, which will ensure the consistent and harmonised understanding of the revised legislation. As the Proposal does not address citizen-to-citizen flows including postal items sent by private individuals e.g. gifts, it is unclear how the current gift relief threshold will be maintained or how gifts with a value greater than EUR 45 will be treated.

…how the current gift relief threshold will be maintained or how gifts with a value greater than EUR 45 will be treated. The concept of deemed importer, as explained in relation to eCommerce movements, aims to remove all responsibility for customs from private individuals but there appears to be a gap in relation to gifts. In our view, there is merit in giving this issue closer consideration and we will revert with specific proposals in this regard. POSTEUROP | Position on the EU Customs Reform 4 Trust and Check Trader (T&C Trader) [Articles 24-27 of COM (2023) 258 final] PostEurop acknowledges that the proposal contains positive elements that can benefit several traders. The concept of T&C Trader builds on existing concepts such as Authorized Economic Operator (“AEO”).

…several traders. The concept of T&C Trader builds on existing concepts such as Authorized Economic Operator (“AEO”). The new T&C Trader status could provide benefits and simplifications extending beyond the current advantages provided to AEO, including the possibility to give part of the data on the goods after the release, perform certain controls and release (self-release), self-assessment on the customs debt and deferred payment. It is important that postal operators are involved in the development of the implementing legislation to ensure that T&C Trader status can be easily obtained and maintained. The current text limits access to T&C Trader to importers and exporters. Customs representatives will only be able to benefit from the T&C Trader facilitation measures in a limited number of circumstances when acting as indirect representative.

…the T&C Trader facilitation measures in a limited number of circumstances when acting as indirect representative. When acting as a direct representative, the customs representative will only be recognized as T&C Trader if the represented person has also been granted such status. PostEurop considers that postal operators in their own role and with the associated tasks and responsibilities, play a sufficiently important role in the supply chain to be able to apply directly for the T&C Trader status and benefit directly from the simplifications provided for, also without being considered as importer or exporter. Like AEO, any person should be able to apply for T&C Trader status provided they meet the prescribed criteria.

Like AEO, any person should be able to apply for T&C Trader status provided they meet the prescribed criteria. PostEurop requests further clarification of this concept and the practical implications thereof for the different parties involved, especially seen the phased-in implementation and in combination with the different representation forms. EU Customs Data Hub (“EU CDH”) [Articles 29-40 of COM (2023) 258 final] Although details on how the shift from a declaration- based to a data-led system are not yet defined, it is expected that all relevant information in the context of imports and exports from current and new sources – importers, postal operators, platforms, etc. – are to be provided or made available to the EU and national authorities via a central platform to enable a better customs surveillance of goods, as well as monitoring the compliance of traders.

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Published by POSTEUROP Brussels, 3 April, 2023 Transparency register ID: 092682012915-24 Position on the European Commission’s proposal for VAT in the digital age Ref. Ares(2023)2411461 - 03/04/2023 ABOUT POSTEUROP POSTEUROP is the association which represents 55 European public postal operators. It is committed to supporting and developing a sustainable and competitive European postal communication market accessible to all customers and ensuring a modern and affordable universal service. Our Members represent 2 million employees across Europe and deliver to 800 million customers daily through over 175,000 counters.

…represent 2 million employees across Europe and deliver to 800 million customers daily through over 175,000 counters. posteurop.org | ©PostEurop Association of European Public Postal Operators AISBL Boulevard Brand Whitlock 114 1200 Brussels Belgium T: + 32 2 761 9650 E: [email protected] POSTEUROP | Position on the European Commission’s proposal for VAT in the digital age 3 CONTEXT PostEurop represents 55 Universal Postal Service Providers across Europe and is a restricted (i.e. regional) Union of the Universal Postal Union (UPU). The postal sector is a major contributor to, and facilitator of trade within the European Union and globally.

(UPU). The postal sector is a major contributor to, and facilitator of trade within the European Union and globally. The postal network is an open access channel and a vital facilitator of trade linking public administrations, businesses and consumers as well as enabling small business enterprises and social customers to access efficient communications and e- commerce services on a global scale.

…enterprises and social customers to access efficient communications and e- commerce services on a global scale. Efficient and effective postal services are essential to the social fabric and economic life of the European Union, and as a Service of General Economic Interest (SGEI), plays an important social function: postal operators are there to provide a quality, accessible and affordable universal postal service to all, as defined not only in the European Postal Services Directive, but also as signatories to the Universal Postal Union Treaty to which all countries, including EU Member States, are members.

…as signatories to the Universal Postal Union Treaty to which all countries, including EU Member States, are members. 1. INTRODUCTION PostEurop and its Members welcome and support the objectives pursued by the VAT in the Digital Age package1 , that should lead to a more advanced level of standardisation and harmonisation of e-invoicing and digital reporting, combat fraud and reducing administrative burden on businesses and suppliers. PostEurop thanks the European Commission for the opportunity granted to business operators to provide comments on the proposed measures and underlines that it is prepared to play an active role in this reform, as an active contributor during the subsequent stages. The proposal to amend the Directive 2006/112/EU2 is an important step to overcome the fragmentation of the VAT reporting requirements and of the e-invoicing requirements in the EU. Nevertheless,…

…for a COUNCIL DIRECTIVE amending Directive 2006/112/EC as regards VAT rules for the digital age - COM/2022/701 final 2. POSTEUROP’S GUIDING PRINCIPLES HIGHLIGHTED DURING CONSULTATION PERIOD In its contribution3 submitted during the consultation period last year to the European Commission, PostEurop pointed out some guiding principles for the reform of the VAT rules in the digital age: 2.1. Extension of the IOSS system and abolishment of Euro 150 threshold The first point PostEurop underlined was the necessity to make the IOSS system mandatory for all economic operators and electronic interfaces acting in the e-commerce sector as well as the abolishment of Euro 150 threshold for applying the IOSS system.

…acting in the e-commerce sector as well as the abolishment of Euro 150 threshold for applying the IOSS system. In the EU’s package, there is the proposal to make the IOSS system mandatory – although only for electronic interfaces acting as deemed supplier – while no provision related to the abolishment of the Euro 150 threshold for the use of the IOSS system was included in the EU’s proposal. PostEurop welcomes the Commission’s statement included in the proposal for a Council Directive amending the VAT Directive 2006/112/EC, in paragraph “Consistency with other Union policies” on page 10, where it is specified that “Any other improvement or extension, such as the removal of EUR 150 threshold below which this simplification scheme can be used4, will be done in the framework of this customs reform”.

…threshold below which this simplification scheme can be used4, will be done in the framework of this customs reform”. According to PostEurop’s perspective, a mandatory use of the IOSS regime together with the abolishment of the current Euro 150 threshold for applying the system would remove some of the critical issues identified, including the phenomena of double taxation (once at the time of purchasing via IOSS and another one at time of importation, linked to the different meaning of “consignment” and “order”) or possible discrepancies between VAT and Customs legislation (linked, for example, to the different exchange rate used for the assessment of Euro 150 threshold for shipments where the total amount is expressed in currencies other than Euro).

…the assessment of Euro 150 threshold for shipments where the total amount is expressed in currencies other than Euro). As underlined in PostEurop’s contribution to the public consultation, making the registration to the IOSS system mandatory for all economic operators acting in the e-commerce arena together with the abolishment of the current Euro 150 threshold would accelerate and simplify the handling of consignments thus significantly contribute to a successful implementation of the new rules. 3 PostEurop’s feedback to the call for evidence on the initiative ”VAT in the Digital Age“ 4 Underlined added POSTEUROP | Position on the European Commission’s proposal for VAT in the digital age 4 2.2.

Age“ 4 Underlined added POSTEUROP | Position on the European Commission’s proposal for VAT in the digital age 4 2.2. Data quality for ITMATT flows Another key point highlighted by PostEurop in the previous position paper were the challenges associated with data quality for ITMATT flows for postal operators PostEurop would like to underline how, in order to have a system which works at its full speed and capacity, it’s crucial that the data quality included in the ITMATT messages are complete and of high quality. The Universal Postal Union, PostEurop and individual postal operators are working hard and are investing a lot in the continuous improvement of the ITMATT data but it has to be reminded that this process will take time and the data quality within the postal stream is closely monitored by the UPU and key indicators regularly reported to DG TAXUD for ICS2 purposes.

…the postal stream is closely monitored by the UPU and key indicators regularly reported to DG TAXUD for ICS2 purposes. Moreover, postal operators from outside the EU base their efforts on the data required by the current ITMATT standard defined at UPU level. For this reason, we would like to bring the Commission’s attention on the fact that each additional new data required for flows entering the EU but non-aligned with the standards defined at UPU global level (see paragraph 3.10 on the unique consignment number) will be difficult to obtain from non-EU posts which, in return, may cause potential consequent operational issues. 3. POSTEUROP COMMENTS ON THE PROPOSED LEGISLATIVE PACKAGE “VAT IN THE DIGITAL AGE” 3.1. Fight against fraud The main reason for the proposed changes in the EU VAT Directive is the VAT gap and the fight against fraud.

…fraud The main reason for the proposed changes in the EU VAT Directive is the VAT gap and the fight against fraud. Although the fight against fraud is of course something that PostEurop supports, it’s necessary to weigh whether the proposed changes – placing a substantial administrative burden on businesses – are proportional. We agree on the fact that Digital Reporting Requirements (DRRs) may help in the fight against fraudulent activities, but – as previously emphasised – it’s important to better evaluate at what cost this will be achieved. According to PostEurop’s point of view, a clear statement is needed on how digital reporting of data will effectively contribute to fight fraud. 5 Or even in any MS. 3.2.

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Published by POSTEUROP Brussels, April 12, 2022 Transparency register ID: 092682012915-24 Position on the European Commission’s initiative “VAT in the digital age” Ref. Ares(2022)2975698 - 12/04/2022 ABOUT POSTEUROP POSTEUROP is the association which represents European public postal operators. It is committed to supporting and developing a sustainable and competitive European postal communication market accessible to all customers and ensuring a modern and affordable universal service. Our Members represent 2 million employees across Europe and deliver to 800 million customers daily through over 175,000 counters.

…represent 2 million employees across Europe and deliver to 800 million customers daily through over 175,000 counters. posteurop.org | ©PostEurop Association of European Public Postal Operators AISBL Boulevard Brand Whitlock 114 1200 Brussels Belgium T: + 32 2 761 9650 E: [email protected] POSTEUROP | Position on the European Commission’s initiative “VAT in the digital age” 3 CONTEXT The postal sector is a major contributor to, and facilitator of trade within the European Union and globally. The postal network is an open-access channel and a vital facilitator of trade linking public administrations, businesses and consumers as well as enabling small business enterprises and social customers to access efficient communications and e- commerce services on a global scale.

…enterprises and social customers to access efficient communications and e- commerce services on a global scale. Efficient and effective postal services are essential to the social fabric and economic life of the European Union, and as a Service of General Economic Interest (SGEI), plays an important social function: postal operators are there to provide a quality, accessible and affordable universal postal service to all, as defined not only in the European Postal Services Directive, but also as signatories to the Universal Postal Union Treaty to which all countries, including EU Member States, are members. The members of PostEurop appreciate the opportunity to contribute to the thinking on, and the development of a modernised VAT mechanism which is designed to implement changes in the way customers and business apply the rules within the European Union.

…which is designed to implement changes in the way customers and business apply the rules within the European Union. We welcome the drive to make the application of VAT simpler, and at the same time reduce the administrative burden on businesses and suppliers, which, according to our view, should not be done at the expense of consumers and / or intermediaries. Therefore, we support the Commission’s consultation process on “VAT in the digital age”1: PostEurop is prepared to play an active role in this reform, not only by replying to the public consultation, but also as an active contributor to the subsequent stages. 1.

…not only by replying to the public consultation, but also as an active contributor to the subsequent stages. 1. INTRODUCTION The members of PostEurop supported from the beginning the initiative of the Commission to establish new rules in particular in the e-commerce sector, submitting a specific position paper in response to the previous EC public consultation on modernising VAT for cross-border e-commerce and taking part in several workshops and technical meetings organised by the Commission during last years. 1 https://ec.europa.eu/info/law/better-regulation/have- your-say/initiatives/13186-VAT-in-the-digital-age_en 2 ITMATT (ITeM ATTributes) electronic data interchange (EDI) messages are used to communicate attribute information about postal items.

…electronic data interchange (EDI) messages are used to communicate attribute information about postal items. An origin postal operator collects postal item data and transmits the data in an ITMATT message to the destination postal operator, to be used for transport security and customs clearance purposes. The ITMATT message contains the data corresponding to the content of the paper postal form Despite the huge work done together with European Commission to find the better solutions in order to minimise the operational impacts deriving from the application of the new VAT e-commerce rules, after the deadline of 1 July 2021 some issues were found in postal operators’ daily activities.

VAT e-commerce rules, after the deadline of 1 July 2021 some issues were found in postal operators’ daily activities. PostEurop members believe that the current public consultation on “VAT in the digital age” will help to reduce the difficulties which operators acting in the e-commerce arena are encountering in their daily activity. 2. SPECIFICITIES OF THE POSTAL SECTOR We would like to highlight some of the specificities of the postal sector and the challenges related to the new rules we encounter daily: • The challenges of the postal sector are unique as designated postal operators normally do not handle end-to-end flows. In principle they process and deliver postal items that are transferred to them by the postal operator of the country of the sender.

…they process and deliver postal items that are transferred to them by the postal operator of the country of the sender. Designated postal operators have an obligation to process and deliver these postal items under the terms of the UPU Convention signed by their Governments, in contrast to other operators who do not have such an obligation. • Designated postal operators in the country of destination do not have a contract or any other form of contact with the sender. As a consequence, the destination designated postal operators have no or very limited information on the identity and status of the sender and the recipient (i.e. whether the shipments are B2B, B2C or C2C) and on the nature, content or value of the postal item. It is the sender’s responsibility to complete Postal Customs Declaration, often resulting in limited or poor quality data.

…is the sender’s responsibility to complete Postal Customs Declaration, often resulting in limited or poor quality data. • As underlined before, postal operator in the country of destination fully depends on data received from the designated operator in the country of origin: the higher the data quality indicated in the ITMATT2 flows are, the faster the customs clearance operations will be.

…the higher the data quality indicated in the ITMATT2 flows are, the faster the customs clearance operations will be. On this aspect there is a challenge of getting – from the postal operator in the country of origin – the data requested the EU legislation, considered the discrepancy existing with UPU legal framework: for this reason, at the moment, the quality of data CN 22 or CN 23 customs declaration, including critical data elements such as: sender and recipient’s full name, address and contact details, and tax code/VAT number; category, total value, and total weight of the item; the complete contents of the item including for each article contained within the item the description, quantity, weight, value, harmonised system (HS) tariff number, origin country; postal charges including insurance; information about associated documents such as a licence, certificate, or invoice.

…charges including insurance; information about associated documents such as a licence, certificate, or invoice. POSTEUROP | Position on the European Commission’s initiative “VAT in the digital age” 4 included in the ITMATT flows from postal operators in the country of origin is very poor. This will be the challenge for the next few years. • The global postal network (through the UPU) enables easy and relatively inexpensive access to a trusted network of designated postal operators. The current customs processes for postal items enable customers easy access through standard WCO approved documents (the CN22 and CN23). Most remuneration agreements do not include the cost of handling items through a customs clearance process.

…and CN23). Most remuneration agreements do not include the cost of handling items through a customs clearance process. Service or operational delays in the processing of the postal items could therefore have a direct negative impact on the cost of the service for both the supplier and the consumer. Moreover, the delivery remuneration for this service is regulated, for quite all postal operators, at UPU level (terminal dues) and depends on the quality of the service (i.e. speed of delivery including time in customs). For these reasons, for postal sector it’s crucial to establish a system which work at its full potential and, most important thing, in the fastest way without setbacks. 3. GUIDING PRINCIPLES FOR “VAT IN THE DIGITAL AGE” 3.1.

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