Inter Ikea Systems BV

…24 April 2023 PACKAGING FOR THE FUTURE IKEA view on the proposal for an EU Packaging & Packaging Waste Regulation For nearly 80 years, packaging has played a key role in the IKEA business model. Innovative and universal approaches to packaging and labelling enable IKEA to optimize production and distribution and minimize waste on the more than four billion customer packages passing through IKEA value chain each year. On an annual basis, IKEA spends over 1 billion Euros on approximately 920 000 tonnes of packaging material. And with these big volumes come big responsibilities. Like our approach to our products, we aim to make product packaging as sustainable, affordable, and customer friendly as possible.

…to our products, we aim to make product packaging as sustainable, affordable, and customer friendly as possible. For example, we are on a journey to completely phase out plastic from consumer packaging solutions by 2028, although some renewable or recycled plastic packaging might remain in the parts of the IKEA food range where it is needed to secure quality and food safety standards beyond 2028. IKEA supports the efforts of the proposed Regulation for Packaging and Packaging Waste (PPWR), published by the European Commission on 30 November 2022. We applaud the European Commission’s decision to change the Directive to a Regulation and anchor the proposal under the Internal Market legal base, which will bring increased harmonization, support further strengthening of the EU Single Market, and decrease complexity for European businesses.

…harmonization, support further strengthening of the EU Single Market, and decrease complexity for European businesses. Prevention and reduction of waste are fundamental elements for a successful transition from a linear to a circular economy. We recommend to the co-legislators to ensure the following key enablers: 1. A harmonised approach to packaging markings is needed to secure the free circulation of goods and to simplify communication to consumers. 2. Harmonised rules for Extended Producer responsibility (EPR) and ecomodulation will reduce administrative burdens and strengthen incentives aimed at supporting sustainability efforts

…ecomodulation will reduce administrative burdens and strengthen incentives aimed at supporting sustainability efforts 3. Incentivising packaging reuse and refill is important. However waste prevention and recycling play a complementary role and no solution should be assessed in isolation. Reuse targets should be applied only if based on solid evidence for reduced environmental impact. 4. Ensure an adequate transition period, taking into account the complexity of the proposal and step-wise development of requirements

…transition period, taking into account the complexity of the proposal and step-wise development of requirements 5. Industry involvement is key, especially on technical aspects, which are to be discussed in secondary legislation. We encourage setting up a Packaging Forum. To support the transition to the circular economy and a positive framework for packaging sustainability, we encourage the EU to adopt a modern, clear, simple, and harmonised regulatory framework for packaging and packaging waste. We take the opportunity to share our knowledge, insights, and recommendations with co-legislators through this paper and we remain at your disposal for any further clarification. © Inter IKEA Systems B.V. 2022 Ref. Ares(2023)2886394 - 24/04/2023 24 April 2023 1) Harmonisation of packaging markings Packaging labels play an important role in guiding consumer behaviour.

…2023 1) Harmonisation of packaging markings Packaging labels play an important role in guiding consumer behaviour. For example, widespread acknowledgement about the importance of recycling has led to several Member State proposals on symbols and/or instructions to be included on packaging to support customers in sorting packaging waste correctly. While the intent is positive, the lack of EU-harmonised rules has led to a complicated web of misaligned - and sometimes conflicting - actions at National level, preventing the free circulation of goods. Without a common approach across the EU, we will encounter many negative consequences, including logistical disruptions, increased use of materials, trade barriers and, ultimately information overload, which can disincentivize customer action.

…use of materials, trade barriers and, ultimately information overload, which can disincentivize customer action. For these reasons: • We welcome Art 12 of the PPWR proposal to harmonise labels that enable the separate collection of packaging waste fractions. Our recommendation is to establish a set of customer-friendly symbols indicating recyclability and/or sorting. A successful package labelling system needs to be flexible enough to allow for adaptation for both local waste collection schemes and global supply capabilities. To enable it: o The more generic a symbol-based system is, the easier to adapt to local, regional or national waste collection systems. o Symbols on packaging should be monochrome, to allow easy printing in various packaging materials, and not include text, to avoid translations.

…be monochrome, to allow easy printing in various packaging materials, and not include text, to avoid translations. o The same symbols included on-pack should be used at national and local levels to guide consumers in sorting according to local needs. Creating such a common, generic set of symbols could offer a more intuitive, consumer-friendly approach to demonstrate how packaging should be sorted no matter where the consumer sits in the EU. Given the urgency of EU action on this matter, we believe that proposed entry into force in 2028 would be too late. Additionally, any national initiatives by Member States to introduce new packaging labelling requirements should be paused until an EU wide scheme is agreed. • We are concerned by the proposal to maintain local differences for symbols connected to Extended Producer Responsibility Schemes (EPR) (recital 49; article 4 par. 5; art. 11 par.

…for symbols connected to Extended Producer Responsibility Schemes (EPR) (recital 49; article 4 par. 5; art. 11 par. 8). Such exception would undermine the effort embedded in this Proposal to harmonize markings on-pack, resulting potentially in the co-existence of dozens of different symbols yet only locally relevant. We are concerned that it would offer a legal base for Member States to retain national markings on separate collection. If the aim is to prove the financial contribution to a national EPR scheme, and since such information is not relevant for the consumer, we believe that a marking/symbol is not the most appropriate solution. However, should a symbol be deemed necessary, it should be harmonized across the EU. • We welcome the effort to ensure harmonization and guarantee the free movement of goods (art 4 par.

…across the EU. • We welcome the effort to ensure harmonization and guarantee the free movement of goods (art 4 par. 1,2,3), but the current wording of article 4, paragraph 4, has the potential to undermine these efforts by allowing for national-specific sustainability or information requirements for packaging. To protect the Single Market and in respect of the legal base for the PPWR, National requirements that would introduce changes to packaging requirements would behave as a barrier to trade. • We equally welcome the proposal to harmonise information on material composition, also allowing for new technologies such as digital marking (art. 11 par 1, 6). However, art. 11 paragraph 4 mandates that this information should be included in a label printed or engraved visibly.

However, art. 11 paragraph 4 mandates that this information should be included in a label printed or engraved visibly. While such a label is one of the possible solutions, the legislation should not exclude less visible ways to indicate the material composition (e.g. digital marking), if deemed appropriate for the goal and if aligned with technology development. • We support the proposal to create a voluntary harmonised label to indicate the recycled content of packaging (recital 46; article 11, par 3). While the PPWR proposal focuses on recycled plastic, we believe it would be also a great opportunity to harmonise measurement methods for other packaging material streams. It is also important to ensure consistent principles with other legislations, e.g. the future Ecodesign for Sustainable Products Regulation. 24 April 2023

…principles with other legislations, e.g. the future Ecodesign for Sustainable Products Regulation. 24 April 2023 2) Extended Producer Responsibility (EPRs) Different EPR systems are set at the Member State level, each with different registration rules and reporting obligations. Even when there are common EPR rules in the EU, such as within the Packaging and Packaging Waste Directive (PPWD), the scope, fees, and reporting requirements vary across different Member States leading to a complex, expensive, and inefficient system. A scattered approach to EPR rules, including on modulation of fees, creates uncertainties and inconsistencies, undermining efforts for incentivizing better, circular, practices.

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Inter IKEA Group 2023 10 30 IKEA recommendations for the revision of the Union Customs Code Feedback on Commission adoption, October 2023 Introduction IKEA strongly support the EU Commission’s proposal for the revision of the Union Customs Code (UCC) aiming to simplify, digitalize, and modernize the customs procedures and welcomes the opportunity to provide feedback. The EU’s customs union plays an important role in establishing a predictable and responsive customs environment especially for companies like IKEA with vast EU and international operations. The proposed reform strengthens the legal framework and the competitiveness of the Single Market, the digital capabilities, and the readiness for a greener EU. We look forward to the transformed and new Customs Union removing inconsistent interpretation and distortions in the application of the law at the operational level.

Union removing inconsistent interpretation and distortions in the application of the law at the operational level. As a multinational company with a global footprint, IKEA has extensive experience in handling administration and implementation of customs codes. We therefore want to share our views regarding the proposal to revise the Union Customs Code. The results of this reform will have a substantial impact on the customs evolution for decades. It is paramount that we ensure this fundamental reform improves the current situation and the essential position of EU trade overall, by reducing the administrative burden on both companies and competent authorities and ensuring a more effective and efficient implementation of the updated Union Customs Code.

…and competent authorities and ensuring a more effective and efficient implementation of the updated Union Customs Code. We believe the key considerations to achieve this are: - Including non-EU resident importers of countries within the Schengen or EFTA areas as importer/declarant and allowing Trust and Check Trader status privileges and benefits to those non-EU resident importers that fulfil the obligations and meet the requirements of the program. - Clear guidance and requirements for gaining a Trust and Check Trader status including clearly defining obligations that companies are realistically able to fulfil. - Challenging and realistic timelines for setting up the Customs Data Hub, consulting companies to ensure a smooth implementation with minimum disruption.

…for setting up the Customs Data Hub, consulting companies to ensure a smooth implementation with minimum disruption. - Exploring further all solutions that can offer economic and consumer protections to make sure all LVC shipments are in full compliance with the regulations without necessarily eliminating the De Minimis Threshold. - Full harmonization ensured by an EU Customs Authority aligned with each Member State not to add further layers of administration and bureaucracy. - Legal clarity on the minimum EU-wide penalty regime. Please see more below on the above mentioned considerations: © Inter IKEA Systems B.V. 2023 Ref. Ares(2023)7527417 - 06/11/2023 Inter IKEA Group 2023 10 30 Expanding the Importer/Declarant inclusion In this proposal, the importer/declarant is currently defined as the residents of the EU and with the power to determine which goods are to be brought into the EU.

…currently defined as the residents of the EU and with the power to determine which goods are to be brought into the EU. Under several EU legislations such as Carbon Border Adjustment Mechanism (CBAM), Ecodesign for Sustainable Products (ESPR), EU Timber Regulation, Corporate Sustainability Due Diligence Directive (CS3D) and EU Forced labour, the importer/declarant is responsible for reporting, forecasting, geolocation and much more. However, not all importers into the EU are residents of the EU. This is a significant change to the importer definitions in the current UCC and will have wide ranging impact to companies currently operating as a non-EU resident importer.

…in the current UCC and will have wide ranging impact to companies currently operating as a non-EU resident importer. Companies in countries such as Norway, Switzerland or US would have to set up permanent establishment in the EU or ask their multiple service providers who are currently acting as either a direct or indirect declarant to act as an indirect declarant, and to take on the risk of legal liability and all the compliance obligations on the companies’ behalf. It will still be the non-EU resident’s obligation to secure sufficient controls and processes are in place to meet the compliance obligations towards all EU legislation and regulations, including the UCC, however, none of benefits will inure to them.

…towards all EU legislation and regulations, including the UCC, however, none of benefits will inure to them. Additionally, it is not the indirect declarant, acting on behalf of a client that will have the most knowledge and influence over a client’s due diligence processes and controls. This would add significant administrative, financial and resources burdens to all non-EU resident importers who have been compliantly importing into the EU for years. As a minimum, we ask the Commission to consider these non-EU resident importers of countries within the Schengen or EFTA areas as importers and declarants, and as such, included in the definition of an importer/declarant and Trusted and Check Trader provisions. Clarifying requirements for the Trust and Check Trader IKEA welcomes the new “Trust and Check Trader” category is introduced for businesses.

…for the Trust and Check Trader IKEA welcomes the new “Trust and Check Trader” category is introduced for businesses. It strengthens the already existing Authorised Economic Operators (AEO) programme for trusted traders and can be given to an actor who formally has demonstrated good customs management in the past three year. This development where an operator can release their goods into circulation into the EU without any active circumvention is appreciated. However, clarity on requirements to becoming a Trust and Check Trader and guidance for ensuring compliance with these requirements are needed. For example: does this new status apply to AEO for EU-entities only or can also non-EU entities, who meet the stringent requirements apply; is one Trust and Check Trader sufficient for the entire Single Market or applied for within each member state?

…apply; is one Trust and Check Trader sufficient for the entire Single Market or applied for within each member state? If there is a mutual recognition agreement (MRA) in place for AEO purposes between countries, where the non-EU resident importer is a resident of, and the non-EU resident importer is AEO, could that be used to grant Trust and Check Trader status? Establishing an integrated EU Customs Data Hub Streamlining customs formalities and reducing red tape through the introduction of the EU Customs Data Hub is most welcomed in this current fragmented and decentralized IT landscape. Removing compliance with 27 different Member State’s systems and requirements requires full EU level and member state level harmonization. Compatibility across all EU member states is a challenge, making © Inter IKEA Systems B.V.

…state level harmonization. Compatibility across all EU member states is a challenge, making © Inter IKEA Systems B.V. 2023 Inter IKEA Group 2023 10 30 sure all new systems integrate seamlessly with existing national systems for other government agencies and customs authorities, as well as with business systems. Therefore, it is essential the development and roll out of this hub is made in consultation with businesses and competent authorities to ensure the key principles such as harmonisation, simplification, and business- friendliness are maintained.

…to ensure the key principles such as harmonisation, simplification, and business- friendliness are maintained. For example: data submission must be automated and eliminate the need for paper documents and certificates, eliminate redundancies of data between and across multiple government agencies and customs, limited to what is needed for easy cross-border entry, business sensitive data must be safe and secure ensuring that only crucial data is shared on a need- to-share basis, limiting the volume of information. In addition, as the EU Customs Data Hub will be providing authorities with a 360-degree overview of supply chains and the movement of goods, it is necessary that the provision of movement milestones obligations be placed on the appropriate supply chain provider for the milestone, and that operational conflicts for companies are avoided to the greatest extent.

…chain provider for the milestone, and that operational conflicts for companies are avoided to the greatest extent. A clear roadmap with objectives for each milestone is therefore needed to bring success to the reform and to avoid costly investments in operations and technology solutions for both companies and authorities. De Minimis Threshold an important step toward consumer protection IKEA is in favour of a fair and safe trading environment where all companies placing products on the EU market should comply with the same rules and regulations. Therefore, the aim of the reform to respond to the current pressures facing the EU Customs such as reducing fraud, increasing transparency for traders and consumer to reduce/remove non-compliant products from the EU market are important steps forward.

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