Allegro sp. z o.o.

September 2022 Allegro input to the revision of the Union Customs Code revision I. Why we are sharing our feedback The process of taking the EU Customs Union to the next level definitely needs to address the challenge on how to manage electronic commerce in the future. Therefore, we, as an EU based e-commerce platform, want to support the European Commission in its attempt to review the EU customs rules with special focus on e-commerce. Based on the introduction provided by the Commission and on the report prepared by Wise Persons Group on Challenges Facing the Customs Union (hereinafter: WPG) on the Reform of the EU Customs Union we may observe that various ideas / directions are being considered and are to be discussed during the reform process.

…we may observe that various ideas / directions are being considered and are to be discussed during the reform process. Although our role in the chain of transactions is limited and we are not engaged in customs operations on a daily basis, as our main role is to facilitate the deliveries between the merchants and consumers, the wide proposed scope of the reform encourages us to express our conclusions at this stage and during further works. Moreover, for many years we have been an active participant in EU works on reshaping e-commerce relevant laws, e.g. VAT reform, and we could observe how important it is to closely cooperate with the European Commission and other stakeholders on the EU law reforms. Only such close cooperation guarantees that the law to be enacted is properly addressing the legislative objectives and targets the adequate business models and transactions.

…be enacted is properly addressing the legislative objectives and targets the adequate business models and transactions. This rule refers not only to cooperation with business representatives but in case of amendment or reforms of customs rules we see a need for a synchronization of customs and VAT EU regulations. II. Key points from the e-commerce platform perspective 1) UCC reforms should focus on establishing as simple and effective as possible processes as well as tools for both customs authorities and trade, limiting its impact on business operations. 2) Before implementing changes to customs eCommerce rules, the IOSS system should first work seamlessly and be safe for both sellers and the platforms.

…customs eCommerce rules, the IOSS system should first work seamlessly and be safe for both sellers and the platforms. 3) In our opinion the obligations of online marketplaces should be adjusted to the role they play in the transaction, and appropriate obligations need to be assigned also to other players such as logistic companies, couriers. 4) For online marketplaces, given the volume of transactions they facilitate and automatization of the processes, the most efficient and reliable solution will be data sharing with relevant authorities.

…of the processes, the most efficient and reliable solution will be data sharing with relevant authorities. 5) Guaranteeing a channel neutrality and a level playing field for all forms of trade and business models, is crucial. In the below, we outline our initial thoughts on the Customs review based on the consultation documents provided by the Commission. We would be happy to provide further data and explain our thoughts in more detail if needed. Allegro sp. z. o. o. ul. Wierzbięcice 1B 60-569 Poznań Allegro sp. z o.o. z siedzibą w Poznaniu, przy ul. Wierzbięcice 1B, 60-569 Poznań, wpisana do rejestru przedsiębiorców prowadzonego przez Sąd Rejonowy Poznań - Nowe Miasto i Wilda w Poznaniu, VIII Wydział Gospodarczy Krajowego Rejestru Sądowego pod numerem KRS: 0000635012, kapitał zakładowy: 40 000 000 złotych, posiadająca numer identyfikacji podatkowej NIP 525-26-74-798, REGON 365331553…

…like to add comments regarding issues covered in the form to be further discussed, if considered interesting - i.e.: 1) Importance of the mentioned customs issues in terms of the administrative workload they generate for business As an e-commerce platform (a marketplace) we are not directly engaged in the process of the customs clearance on a daily basis, thus we do not have much of our own experiences of administrative workload in most of the areas listed by the form. We observe though that the following areas for sure are challenging: a. Classification of goods (from the perspective of our merchants) where obtaining sufficient information to apply the correct CN code is almost impossible in many cases.

…our merchants) where obtaining sufficient information to apply the correct CN code is almost impossible in many cases. An incorrect classification would impact assessment of the origin of goods and at the end of the process, may result in wrongful application of customs rate and calculation of the tax base for import VAT. The other issue with classification is the lack of consistency in customs authorities’ approaches in different EU countries, also well noted by the WPG Report (p. 38): “Here again, the non-uniformity in the application of rules and procedures (including tariff classification) across Member States is of major concern.” In the scope of usefulness of the current system of classification the WPG made the following reference in the WPG Report (p.

…scope of usefulness of the current system of classification the WPG made the following reference in the WPG Report (p. 44): “Another discussed difficulty is that Customs are generally unable to confirm the correctness of the declared data without opening the consignment. The information currently collected by Customs seems largely insufficient to assess the compliance of products. Important information is not available in the customs declaration. To add to the difficulty, there is little if no match between the customs nomenclature and product classification.

To add to the difficulty, there is little if no match between the customs nomenclature and product classification. The nomenclature is not dynamic enough and not connected to the reality of the business world.” We agree that the classification of goods for tariff and non-tariff obligations is an obstacle for traders, but also for authorities, which cannot cross-check already obtained data (we are referring to this point also below in larger scale). b. Keeping up with new business models and technologies and execution of both tariff and non-tariff customs obligations (from the perspective of the whole system), we believe that swifter responses to new business models and technologies could significantly increase safety on the EU borders and assure fair competition on the EU market.

…and technologies could significantly increase safety on the EU borders and assure fair competition on the EU market. We are referring here also to the WPG Report (p.42), where it is expressed that: “Therefore, several experts call for making the legislation clear and coherent (“better written rules”) as vital to allow for good faith compliance by all traders. They consider that Customs legislation must be more dynamic and future-proof to adapt to new products and new business processes. When rules are complex, guidance and due diligence instructions could help companies to know what needs to be done.” We could not agree more, the response to new business models should get along with clear and self-explanatory rules to assure simplicity of following the rules on a daily basis, even for SMEs. Allegro sp. z. o. o. ul. Wierzbięcice 1B 60-569 Poznań Allegro sp. z o.o.

…the rules on a daily basis, even for SMEs. Allegro sp. z. o. o. ul. Wierzbięcice 1B 60-569 Poznań Allegro sp. z o.o. z siedzibą w Poznaniu, przy ul. Wierzbięcice 1B, 60-569 Poznań, wpisana do rejestru przedsiębiorców prowadzonego przez Sąd Rejonowy Poznań - Nowe Miasto i Wilda w Poznaniu, VIII Wydział Gospodarczy Krajowego Rejestru Sądowego pod numerem KRS: 0000635012, kapitał zakładowy: 40 000 000 złotych, posiadająca numer identyfikacji podatkowej NIP 525-26-74-798, REGON 365331553 Although we are focused on the above-mentioned topics, we would like to follow developments in every point relevant to customs, as amendments to the customs law could also affect our and our merchants' future business decisions about undertaking cross-border transactions.

…law could also affect our and our merchants' future business decisions about undertaking cross-border transactions. 2) Main achievements, improvements or positive impacts of the Customs Union to date From the perspective of our merchants we can observe that coping with measures of UCC could be challenging for SMEs, and as merchants currently are putting significant effort to follow customs requirements to keep the trade fair and safe for customers, any simplifications to be introduced should consider the position of diligent merchants. As mentioned in the WPG Report (p. 43): “There is also economic and social damage to consider: where EU industries have to work to high standards (e.g. consumer, environmental and employment protection) and e-commerce imports do not respect these standards, competition is unfair and systematically damages Union and national interests, including jobs and…

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originalus šaltinis (PDF) ↗

September 2023 Allegro initial comments on the revision of the Union Customs Code Allegro welcomes the publication of the Revision of the Union Customs Code, aiming at adjusting the Customs Union to an increasingly digitalised economy and timely accommodating the rise of e-commerce. Allegro supports the overall direction of the proposal with the introduction of a European Customs Authority, and EU Data Hub being all promising concepts. However, as things currently stand, the proposal also creates significant uncertainty around the role of online marketplaces. Online marketplaces generally do not have control and physical oversight on the goods - they facilitate transactions between the seller and the buyer.

…not have control and physical oversight on the goods - they facilitate transactions between the seller and the buyer. To this regard their role in the customs procedures should be adapted to this fact and should be proportional in comparison with other actors, like logistic operators, who have direct relations with customs authorities. The deemed importer is currently not defined clearly enough, especially when it comes to liability, which creates uncertainty. Furthermore, as currently worded, the implementation of the proposal would be incredibly complex, and as a consequence it would push out smaller EU based online marketplaces from EU import transactions, as it would not make economic sense to implement costly solutions. The EU would therefore risk giving up the market to global platforms.

…economic sense to implement costly solutions. The EU would therefore risk giving up the market to global platforms. As a result it would reduce the seller’s ability to choose its business partner and weaken their - in particular SMEs - position in respect to global giants, e.g. with a high share of own retail sales competing with the platforms’ merchants. In order to promote EU based businesses and help develop EU markets, regulators should focus on addressing main challenges stemming from the current proposal (indicated below): ● The proposal creates significant legal uncertainty for online marketplaces, as the deemed importer regime is not clearly defined, especially when it comes to the Ref. Ares(2023)6576126 - 28/09/2023 responsibilities and liability of the deemed importer.

…when it comes to the Ref. Ares(2023)6576126 - 28/09/2023 responsibilities and liability of the deemed importer. Companies need to understand the respective liabilities and responsibilities in order to make informed business decisions and correctly assess and mitigate potential risks. Otherwise business would act in uncertainty, which is difficult to accept. ● The proposal prioritises large 3rd country platforms with a large share of imports, over smaller EU based ones, for which the import scheme doesn’t represent a significant share of transactions. As the cost of complying with the new regime will be disproportionately expensive for these smaller EU based platforms it might push them out from importing goods all together. Moreover, the 3rd country platforms can easily change their business model to the retailer one in order to avoid the new obligations imposed on marketplaces (e.g.

…change their business model to the retailer one in order to avoid the new obligations imposed on marketplaces (e.g. by transferring to the drop-shipping model). ● Mandating “deemed importer” provisions for the marketplaces before final implementation of the UCC rules for all imports puts the marketplaces (including non-global EU ones) in competitive disadvantage over direct sellers (as according to the timeline it may take up to 10 years before enforcing it over the nonEU retailers) as the marketplaces would account customs duties in order to be compliant but it is not secured that the customs duties over direct B2C shipments of retailers would be paid.

…to be compliant but it is not secured that the customs duties over direct B2C shipments of retailers would be paid. To address these challenges we urge EU lawmakers to: ● Create clarity - by ensuring that the concept of the deemed importer is in line with the recently introduced EU Regulations such as the DSA1 and ensures that online marketplaces, because of their purely facilitation role, are not liable for non-financial risks. ● Focus on step by step implementation - as the reforms are very complex, and to ensure that there is time to adjust potential flaws before firms have to make significant investments, certain parts of the regulation should be implemented in a step by step approach. New marketplaces’ obligations should be introduced in two steps.

…should be implemented in a step by step approach. New marketplaces’ obligations should be introduced in two steps. The first step would be (1) an obligation to report data collected from the merchants (data sharing 1 DSA - Article 6 - Hosting obligations) in the EU Customs Data HUB. Only once it works, some initial problems are solved and the collected data is used for customs audit procedures, the second stage could include (2) the obligation regarding calculation and payments of customs duties. ● Provide for more flexibility - since the EU resident e-commerce platforms, which in comparison to the non EU origin platforms, in most cases have no experience with customs will now be involved in the customs procedures, it should be assured that they can benefit from respective simplifications if applicable, i.a. Trust and Check trader status, from the very beginning.

…can benefit from respective simplifications if applicable, i.a. Trust and Check trader status, from the very beginning. ● Harmonise the implementation of ViDA and the UCC revision - by considering the whole value chain of a good and allow this to be implemented automatically as part of the customs process. This would greatly increase the value for business of both the deemed importer and deemed supplier regime2. ● Aim for constant improvement - the reforms to the UCC are very ambitious and will take a long time to implement. The successful implementation of this overhaul therefore requires continued dialogue between regulators and industry, to ensure that adjustment can be made when necessary.

…requires continued dialogue between regulators and industry, to ensure that adjustment can be made when necessary. We therefore would wholeheartedly support the creation of a dedicated platform for dialogue where industry experts and regulators meet, discuss the suggested proposals, and reflect on the changes that have been implemented (i.a. as platforms cannot be directly represented within the Trade Contact Group). If the above mentioned issues are properly addressed, we think the revision of the UCC will put the EU at the forefront of customs and tax policy and ensure that EU based firms thrive in their home market. Detailed explanations can be found below. Please note that we are still analyzing the proposal so additional comments may follow. In case of questions please contact [email protected].

…still analyzing the proposal so additional comments may follow. In case of questions please contact [email protected]. 2 For a more detailed analysis of Regulation COM(2023)262), please see our additional paper attached in the annex. ANNEX Create clarity around the new role of e-commerce platforms The proposed Regulation defines two statuses – importer and deemed importer. According to Article 5 point 12 of the Regulation, ‘importer’ means any person who has the power to determine and has determined that goods from a third country are to be brought into the customs territory of the Union or, except otherwise provided, any person who is considered a deemed importer”.

…into the customs territory of the Union or, except otherwise provided, any person who is considered a deemed importer”. The ‘deemed importer’, following Article 5 point 13 of the Regulation, “means any person involved in the distance sales of goods to be imported from third countries into the customs territory of the Union who is authorised to use the special scheme laid down in Title XII, Chapter 6, Section 4 of Directive 2006/112/EC”. General obligations for both importers and deemed importers are presented in Article 20 and 21 of the Regulation.

General obligations for both importers and deemed importers are presented in Article 20 and 21 of the Regulation. According to Article 20 paragraph 1 of the Regulation, the importer shall comply with the following obligations: − providing, keeping and making available to customs authorities, as soon as it is available and in any event prior to the release of the goods, all the information required in respect of the storage or the customs procedure under which the goods are to be placed; − ensuring the correct calculation and payment of customs duties and any other charges applicable; − ensuring that the goods entering or exiting the customs territory of the EU comply with the relevant other legislation applied by the customs authorities and providing, keeping and making available appropriate records of such compliance; − any other obligation on the importer established in customs…

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originalus šaltinis (PDF) ↗