eBay EU liaison office

…9 October 2023 1/7 eBay’s Feedback on the reform of the Customs Union *** INTRODUCTION We welcome the opportunity to share feedback on the package recently brought forward by the Commission, composed of a proposal for a new Regulation on the Union Customs Code, EU Customs Data Hub and EU Customs Authority, a proposal for amending the Regulation on the system of reliefs from customs duty and the tariff and statistical nomenclature, and a proposal for amending the VAT Directive on its provisions related to distance sale of imported goods. While we support the EU’s ambition to make customs processes and controls more efficient and harmonized, we think that this important evolution should be carefully conducted and carry proportionate obligations and responsibilities for all players involved, including online marketplaces like eBay.

…carry proportionate obligations and responsibilities for all players involved, including online marketplaces like eBay. We also challenge the proposal made by the European Commission of entirely removing the 150 EUR de minimis exemption on customs duties, for reasons further detailed in this document. As one of the first online marketplaces to be launched over 25 years ago, eBay has in-depth long-time experience connecting buyers and sellers online. Today, eBay gathers more than 132 million active buyers and millions of sellers globally, both individuals and businesses, which include a large number of small and medium-sized companies (SMEs). At any point in time there are around 1.9 billion listings live on eBay platforms around the world. eBay empowers SMEs to create their own digital storefront and to control their strategy, customer relationship, product marketing and delivery.

…their own digital storefront and to control their strategy, customer relationship, product marketing and delivery. In fact, as a pure third-party marketplace, eBay never sells its own products and never competes with its sellers. Moreover, eBay does not hold, ship or deliver any of the goods sold via its platform. EBAY’S FEEDBACK ON THE EU CUSTOMS REFORM – KEY RECOMMENDATIONS ● Explicitly rule out any non-financial liability stemming from the deemed importer status ● Implement good faith clauses to protect deemed importers against miscategorized goods ● Align the date of application of the deemed importer regime with the availability of the EU Customs Data Hub ● Rescind the removal of the 150 EUR de minimis Ref. Ares(2023)7524677 - 06/11/2023 9 October 2023 2/7 1.

Data Hub ● Rescind the removal of the 150 EUR de minimis Ref. Ares(2023)7524677 - 06/11/2023 9 October 2023 2/7 1. The role of online marketplaces in the reformed Customs Union The proposal seems to sustain the preconceived expectation that all e-commerce players are by nature involved in the logistics and customs clearance processes. This is, however, not the case for a pure third- party marketplace like eBay. a. Implications of the deemed importer status As reformed in 2017, the Directive 2006/112/EC (or EU VAT Directive) created the so-called “deemed supplier” regime.

…reformed in 2017, the Directive 2006/112/EC (or EU VAT Directive) created the so-called “deemed supplier” regime. Through its new Article 14a, the Directive states that a taxable person that “facilitates, through the use of an electronic interface such as a marketplace” distance sales of goods imported from outside the EU in consignments of value <150 EUR, or the supply of goods within the EU by a taxable person established outside the EU to a non-taxable person, then said facilitating person (marketplace provider) “shall be deemed to have received and supplied those goods himself”.

…said facilitating person (marketplace provider) “shall be deemed to have received and supplied those goods himself”. Although the concept of supplier appears in other areas of EU legislation, such as consumer law or corporate due diligence, the deemed supplier status assumed by online marketplaces under the VAT Directive does not extend to those areas as its sole objective is “to ensure effective and efficient collection of VAT”, as the European Commission clarified in its own Explanatory Notes on VAT e-commerce rules. The same Explanatory Notes reiterate it in the most explicit way: “the deemed supplier provision is a ‘fiction’ created for VAT purposes. The deemed supplier is usually not in possession of the goods and the transfer of ownership of the goods occurs between the underlying supplier and the customer.

…of the goods and the transfer of ownership of the goods occurs between the underlying supplier and the customer. Hence, the deemed supplier will often (…) depend on the accuracy of the information provided by the [underlying] suppliers”. The situation is not at all as clear when it comes to the “deemed importer” concept introduced by the present reform. First, the role of the traditional importer within the Union Customs Code already goes beyond taxation, unlike that of the traditional supplier within the VAT Directive. Second, the Commission has so far not provided any explicit clarification of the fact that the deemed importer obligations would be strictly limited to the financial aspect of the customs import process.

…that the deemed importer obligations would be strictly limited to the financial aspect of the customs import process. In fact, it has even stated in its Impact Assessment accompanying the reform package: “The concept of ‘deemed importer’, however, would go beyond the financial liability for the collection of customs duties and VAT and would also cover non-financial aspects, within the limitations of the Digital Services Act” (page 129). Yet, imposing liability for non-financial risks on third-party marketplaces like eBay would infringe the principles of intermediary liability enshrined in the e-Commerce Directive and upheld by the EU institutions as part of the Digital Services Act. Further adverse effects could be expected, such as the over-blocking of sellers even for involuntary mistakes and following abusive reports (e.g.

…be expected, such as the over-blocking of sellers even for involuntary mistakes and following abusive reports (e.g. of ill-intentioned competitors), given marketplaces’ inability to independently assess the illegality of products. In the meantime, actual bad players would be further disincentivized from abiding by the rules, with compliant marketplaces having to shoulder the legal and financial hit of non-compliant product sales in their place1. The proposal needs to clarify that the deemed importer status would carry implications strictly limited to the financial aspect of importer obligations, namely the effective and efficient collection of customs duties. 1 This does not preclude eBay, like many other online marketplaces, to deploy important efforts towards ensuring the safety of products sold on its platform. To read more about eBay’s commitments to product safety, click here.

…safety of products sold on its platform. To read more about eBay’s commitments to product safety, click here. 9 October 2023 3/7 b. Challenges with declaring as a deemed importer ● Unavailable or unreliable goods information Recital 14 of the proposed Regulation states that “the deemed importer should provide to the customs authorities not only the data necessary for the release for free circulation of the goods sold to consumers in the EU, but also the information that they must collect for VAT purposes.” This information includes, as per Article 88 paragraph 3(a), information such as the manufacturer, or the product supplier where different from the manufacturer. This information may be challenging to obtain for a deemed importer like eBay, especially from sellers of second-hand goods who may simply not have the information readily available.

…like eBay, especially from sellers of second-hand goods who may simply not have the information readily available. In the same logic, it would be important to clarify that the origin as required on the declaration refers to the origin of the shipment (which may be communicated by the seller to the marketplace) as opposed to the actual origin of the good (i. e. where it was manufactured, for example). As per the same Article, the deemed importer would have to provide a “tariff classification” and a “description of the goods”. An online marketplace may of course be able to relay the description as provided by the third-party seller offering the goods on its platform. However, if the online marketplace is to become the deemed importer, we cannot allow for an erroneous description (or resulting erroneous tariff classification) to generate any liability to the platform.

…for an erroneous description (or resulting erroneous tariff classification) to generate any liability to the platform. In a pure third-party marketplace business model, the platform cannot inspect products physically. As a result, the proposal should include a “good faith clause” whereby the liability of the deemed importer should not be incurred, unless it can be proven that the deemed importer has failed to exert due commercial care. Such a provision is already included in the European Commission’s Explanatory Notes on VAT e-commerce rules for the application of the current “deemed supplier” framework: “The deemed supplier rule should not put a disproportionate burden on electronic interfaces and does not aim to require a wide-spread standard of checks to be performed for every supply”.

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