Ecommerce Europe

…www.ecommerce-europe.eu | [email protected] | +32 (0) 496 273 060 Rue du Commerce 31, 1000 Brussels (Belgium) Page 1 Position Paper 4 September 2023 Ecommerce Europe’s feedback on the UCC Revision proposal Ecommerce Europe welcomes the opportunity to provide feedback on the European Commission’s proposal for a revision of the Union Customs Code (UCC). This proposal is a clear step forward to strengthening the legal framework for customs and to making it suitable to address the challenges that have emerged in recent years. In this paper, we will structure our position into a general section on the Customs Reform proposal and other sections addressing some specific measures of the proposed revision. 1.

…on the Customs Reform proposal and other sections addressing some specific measures of the proposed revision. 1. General feedback on the UCC revision From a general perspective, Ecommerce Europe welcomes the European Commission’s initiative to introduce further simplification to the customs processes for businesses. The UCC revision lays down several measures that could potentially lead to achievement of a world-leading and data-driven EU Customs, which would provide the benefit of businesses and EU citizens alike. This reform outlines proposals for a simplification of the customs procedures and relief for both authorities and traders, allowing them to navigate efficiently the Customs Union. It is worth commending the EU’s efforts in adapting the customs framework to the developments in the e- commerce and focusing on aligning these rules with the VAT framework.

…customs framework to the developments in the e- commerce and focusing on aligning these rules with the VAT framework. The UCC in combination with the VAT in the Digital Age proposal are a necessary and welcome next step of VAT e-commerce package implemented in 2021. The proposals in the UCC could have the potential to further strengthening fair competition and levelling the playing field in e-commerce. Whether this objective is achieved and whether newly introduced obligations are proportional for e-commerce actors will depend on a lot of operational details which are currently missing. We encourage the European Commission and EU countries to set up structural feedback mechanisms with impacted businesses early in the legislative process, to ensure the legislation is fit for purpose to achieve the desired results. Sufficient lead time for businesses will also be key.

…is fit for purpose to achieve the desired results. Sufficient lead time for businesses will also be key. Depending on the length of the legislative process, the earliest timelines included in the proposal 2028 may need further extending to make sure businesses have sufficient time to prepare. 2. Feedback concerning the €150 threshold removal Ecommerce Europe supports the European Commission’s ambition to introduce a more modern framework for customs that cuts down on the levels of fraud in the sector while introducing more transparency for traders and consumers. Among the several policy proposals, the UCC revision suggests removing the customs duty exemption for goods valued up to €150. Ecommerce Europe understands the European Commissions’ ambition to level the playing field between e-commerce within the EU and from third countries.

European Commissions’ ambition to level the playing field between e-commerce within the EU and from third countries. Additionally, Ecommerce Europe would also like to draw the attention on potential counter-effects that the removal of the €150 threshold could cause on several grounds below. Ref.

…on potential counter-effects that the removal of the €150 threshold could cause on several grounds below. Ref. Ares(2023)7151184 - 20/10/2023 www.ecommerce-europe.eu | [email protected] | +32 (0) 496 273 060 Rue du Commerce 31, 1000 Brussels (Belgium) Page 2 Position Paper 4 September 2023 While the removal of the customs threshold has the potential to level the playing field between EU e- commerce businesses competing with third country direct imports to EU consumer (as these third country sellers are often subject to less regulatory oversight and compliance obligations as well as benefiting from more favourable domestic economic incentives (subsidies, lower tax rates) than EU companies), the aim of levelling the playing field may also be achieved by other means, more direct and efficient than the de minimis removal.

…levelling the playing field may also be achieved by other means, more direct and efficient than the de minimis removal. On the one hand, the Report of the EU Wise Persons Group on Challenges Facing the Customs Union clearly acknowledges the fraud potential caused by the €150 Euro threshold and explicitly recommends the removal. On the other hand, the Copenhagen Economics study (2023) on Customs duty de minimis1 clearly shows that a removal of the EU de minimis could have negative impacts on businesses (esp. small and medium enterprises, SMEs), EU customers and more broadly, the EU’s position in the global trade arena. This recent study does not take into account the EU Customs reform proposal (which includes some trade facilitation measures and simplifications, see next sections) but we believe it is important to highlight the potential impact of the threshold removal.

…see next sections) but we believe it is important to highlight the potential impact of the threshold removal. • Firstly, from a general perspective, increased costs on low value consignments could risk hampering trade opportunities and exports towards the EU especially for the businesses which heavily rely on the EU’s tariff-free regime to profit margins and stay afloat. Many developing countries, particularly those with smaller economies, heavily rely on exports of low-value goods to the EU to stimulate economic growth and create employment opportunities. The increased costs associated with customs duties and the removal of the de minimis can hinder their ability to compete in the EU market. Moreover, the removal may further widen the trade imbalance between developed and developing countries, by placing a disproportionate burden on exporters from less economically advanced regions.

…and developing countries, by placing a disproportionate burden on exporters from less economically advanced regions. As this customs policy reform may provide for less incentives for businesses to export to the EU, this could result in them seeking new opportunities in other third countries. Furthermore, often SMEs utilise the de minimis threshold to import intermediary goods and other items that are important for their business, such as prototypes. In fact, an article recently published in The Well News stated that small and medium size business rely on de minimis to import cutting-edge technology in order to bring ideas to life. Further, many of these companies then “bring their prototypes back […] for manufacturing. De minimis drastically reduces their time to market, supporting the next generation of manufacturing”.

…manufacturing. De minimis drastically reduces their time to market, supporting the next generation of manufacturing”. • In addition, the removal of the customs exemption could trigger other non-EU countries to introduce similar provisions and retaliatory measures. For example, legislation pending before the U.S. Congress (proposed by Louisiana Senator Cassidy) would impose “reciprocal” de minimis treatment on goods entering the U.S. if the European Commission pursues the elimination of the remaining de minimis treatment, the U.S. could be more inclined to adopt the pending bill – thereby removing de minimis treatment for EU products coming to the U.S. which currently stands at 800 USD.

…bill – thereby removing de minimis treatment for EU products coming to the U.S. which currently stands at 800 USD. • Under the new customs system, the H7 declaration would no longer be applicable, which will compel large number of companies, especially SMEs that do not necessarily get the Trust & Check 1 Copenhagen Economics study for EU Express Association (2023) on Customs Duty de minimis. Available at: https://copenhageneconomics.com/publication/study-on-customs-duty-de-minimis/ www.ecommerce-europe.eu | [email protected] | +32 (0) 496 273 060 Rue du Commerce 31, 1000 Brussels (Belgium) Page 3 Position Paper 4 September 2023 status, to abandon the super-reduced dataset and adopt the H1 full declaration dataset. This shift could cause several difficulties and administrative burden on companies, marketplaces and postal and logistics operators.

…cause several difficulties and administrative burden on companies, marketplaces and postal and logistics operators. • On another note, the removal of the de minimis is presented as the solution that will tackle undervaluation. Whilst the issue of undervaluation cannot be denied, pieces of research questions whether it is driven by the de minimis threshold . While the low value consignments will generate customs duty revenue, it may still not reflect actually import values since suppliers of low value goods could still declare a lower value to keep the duty impact as low as possible.

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…www.ecommerce-europe.eu | [email protected] | +32 (0) 496 273 060 Rue du Commerce 31, 1000 Brussels (Belgium) Page 1 24 March 2023 Ecommerce Europe reply to the Call for Evidence on further specifying procedural rules relating to the enforcement of the General Data Protection Regulation 1. Introduction The aim of the initiative on ‘further specifying procedural rules relating to the enforcement of the General Data Protection Regulation (GDPR)’ is to streamline cooperation between national data protection supervisory authorities when enforcing the GDPR in cross-border cases. To fulfil this objective, the initiative proposes to harmonise certain aspects of the administrative procedures applied by the relevant data protection supervisory authorities in such cases.

…aspects of the administrative procedures applied by the relevant data protection supervisory authorities in such cases. Ecommerce Europe generally perceives the European Commission’s initiative to refine the existing procedural rules on GDPR enforcement positively, as current procedural differences, due to lack of harmonisation across the EU Member States, might be highly impactful for the parties involved under investigation – including businesses.

…the EU Member States, might be highly impactful for the parties involved under investigation – including businesses. However, Ecommerce Europe also encourages the European Commission to be mindful of ensuring that the One-Stop-Shop (OSS) mechanism, introduced under Article 56 GDPR, is maintained and strengthened to ensure a level playing field and legal certainty for businesses operating across different EU Member States; that the rights of the parties involved in the investigation procedure, including in particular the right to be heard, also before the EDPB, is ensured; as well as that the right to due judicial process is not constrained by fixed and arbitrary procedural deadlines that do not take into account the specificity and complexity of the subject matter in question.

…deadlines that do not take into account the specificity and complexity of the subject matter in question. Finally, we find it relevant to emphasise that since a general evaluation of the GDPR is expected next year, we argue that the European Commission should refrain from reopening the GDPR, and rather focus its efforts on a targeted proposal only addressing the relevant procedural aspects of enforcement under the GDPR. As such, Ecommerce Europe urges the Commission to ensure that the planned initiative focuses only on the cooperation between national data protection authorities and does not contain provisions that will affect the data subjects, controllers, or processors.

…protection authorities and does not contain provisions that will affect the data subjects, controllers, or processors. As this initiative generally is perceived to respond to the European Data Protection Board’s (EDPB or ‘the Board’) letter of recommendations of 10 October 2022, which identifies procedural aspects of the cooperation between Supervisory Authorities (SAs) in cross-border cases that calls for further harmonisation at EU level, we will address key concerns related to the proposals of the EDPB in the following paragraphs. 2. Scope of the initiative In its Call for Evidence on 'further specifying procedural rules on the enforcement of the GDPR’, the European Commission refers to Article 16 of the Treaty on the Functioning of the European Union (TFEU) as its legal basis for the upcoming legislative initiative.

…the Treaty on the Functioning of the European Union (TFEU) as its legal basis for the upcoming legislative initiative. Article 16 (TFEU) lays down rules on the ordinary legislative procedure, under which the European Commission may introduce regulatory proposals, including within the area of data protection, processing of personal data and the free movement of such data. However, since the Commission has not yet issued any information on what type of legislative initiative they intend to propose, i.e. whether they will revise the existing GDPR, if they will present a completely new regulatory proposal, or if they will make use of implementing acts, Ecommerce Europe calls for further information on this matter and clarification of the legal basis behind the initiative to ensure that the scope Ref.

…on this matter and clarification of the legal basis behind the initiative to ensure that the scope Ref. Ares(2023)2153929 - 24/03/2023 www.ecommerce-europe.eu | [email protected] | +32 (0) 496 273 060 Rue du Commerce 31, 1000 Brussels (Belgium) Page 2 24 March 2023 of the proposal does not go beyond the competences of the Commission, depending on which legislative approach the Commission decides to pursue. For instance, Article 61(9) GDPR empowers the Commission to adopt implementing acts to specify the format and procedures for mutual assistance between Supervisory Authorities (SAs), as well as Article 67 GDPR grants the Commission the power to adopt implementing acts on the arrangements for the exchange of information between SAs, and between SAs and the European Data Protection Board (EDPB).

…for the exchange of information between SAs, and between SAs and the European Data Protection Board (EDPB). Aside from these referred articles, the Commission has no further power to adopt implementing or delegated acts on procedural aspects of enforcement of the legislation. As such, Ecommerce Europe presumes that any regulatory proposals that go beyond this framework could only be established through the ordinary legislative procedure under Article 16 (TFEU). 3.

…beyond this framework could only be established through the ordinary legislative procedure under Article 16 (TFEU). 3. General enhancement of the One-Stop-Shop mechanism under the GDPR The One-Stop-Shop (OSS) mechanism, introduced by Article 56 GDPR, allows companies carrying out cross-border personal data processing to engage with one Lead Supervisory Authority (LSA), rather than the relevant Supervisory Authority of each EU member state, thus ensuring legal certainty for businesses and generally making it easier for companies to operate in different EU Member States.

…legal certainty for businesses and generally making it easier for companies to operate in different EU Member States. A consistent and harmonised application of the GDPR remains essential, and therefore, Ecommerce Europe strongly supports the preservation and strengthening of this mechanism, and notes that the European Commission’s new legislative initiative on GDPR enforcement should only reinforce procedural issues, which will enable more effective cooperation between authorities on cross-border issues. As such, we argue against expanding the ability of the wider community of Data Protection Authorities (DPAs) to review and comment upon factual findings, draft decisions and ultimate sanctions recommend to the lead DPA during the course of the investigation.

…findings, draft decisions and ultimate sanctions recommend to the lead DPA during the course of the investigation. Likewise, we also argue that the role of the EDPB and the cooperation mechanism should be the exception and not function as a general appeal instance for legitimate decisions taken by the lead DPA. Rather, we suggest the Commission to look into ways of simplifying the cooperation mechanism. One of the prerequisites to achieve harmonised enforcement of the GDPR in cross-border cases is for national DPAs to have a common understanding and interpretation of the EU data protection law. Currently, such harmonised interpretation is lacking.

…understanding and interpretation of the EU data protection law. Currently, such harmonised interpretation is lacking. Based on observed activity of the local European DPA offices, Ecommerce Europe notes that there are visible differences in the interpretation and application of the GDPR across different EU Member States, leading to forum shopping among complainants. This brings about a number of competitive disadvantages for companies based in Member States that interpret and apply the enforcement provisions under the GDPR more strictly compared to other Member States. A concrete example of such differences is, for instance, that there is a general expectation within the German market that e-commerce platforms should always make it possible to make a purchase without registration of the customer. This is, however, not a commonly shared position across all Member States.

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…www.ecommerce-europe.eu | [email protected] | +32 (0) 496 273 060 Rue du Commerce 31, 1000 Brussels (Belgium) Page 1 Position Paper 4 September 2023 Ecommerce Europe’s feedback on the UCC Revision proposal Ecommerce Europe welcomes the opportunity to provide feedback on the European Commission’s proposal for a revision of the Union Customs Code (UCC). This proposal is a clear step forward to strengthening the legal framework for customs and to making it suitable to address the challenges that have emerged in recent years. In this paper, we will structure our position into a general section on the Customs Reform proposal and other sections addressing some specific measures of the proposed revision. 1.

…on the Customs Reform proposal and other sections addressing some specific measures of the proposed revision. 1. General feedback on the UCC revision From a general perspective, Ecommerce Europe welcomes the European Commission’s initiative to introduce further simplification to the customs processes for businesses. The UCC revision lays down several measures that could potentially lead to achievement of a world-leading and data-driven EU Customs, which would provide the benefit of businesses and EU citizens alike. This reform outlines proposals for a simplification of the customs procedures and relief for both authorities and traders, allowing them to navigate efficiently the Customs Union. It is worth commending the EU’s efforts in adapting the customs framework to the developments in the e- commerce and focusing on aligning these rules with the VAT framework.

…customs framework to the developments in the e- commerce and focusing on aligning these rules with the VAT framework. The UCC in combination with the VAT in the Digital Age proposal are a necessary and welcome next step of VAT e-commerce package implemented in 2021. The proposals in the UCC could have the potential to further strengthening fair competition and levelling the playing field in e-commerce. Whether this objective is achieved and whether newly introduced obligations are proportional for e-commerce actors will depend on a lot of operational details which are currently missing. We encourage the European Commission and EU countries to set up structural feedback mechanisms with impacted businesses early in the legislative process, to ensure the legislation is fit for purpose to achieve the desired results. Sufficient lead time for businesses will also be key.

…is fit for purpose to achieve the desired results. Sufficient lead time for businesses will also be key. Depending on the length of the legislative process, the earliest timelines included in the proposal 2028 may need further extending to make sure businesses have sufficient time to prepare. 2. Feedback concerning the €150 threshold removal Ecommerce Europe supports the European Commission’s ambition to introduce a more modern framework for customs that cuts down on the levels of fraud in the sector while introducing more transparency for traders and consumers. Among the several policy proposals, the UCC revision suggests removing the customs duty exemption for goods valued up to €150. Ecommerce Europe understands the European Commissions’ ambition to level the playing field between e-commerce within the EU and from third countries.

European Commissions’ ambition to level the playing field between e-commerce within the EU and from third countries. Additionally, Ecommerce Europe would also like to draw the attention on potential counter-effects that the removal of the €150 threshold could cause on several grounds below. Ref.

…on potential counter-effects that the removal of the €150 threshold could cause on several grounds below. Ref. Ares(2023)6240758 - 14/09/2023 www.ecommerce-europe.eu | [email protected] | +32 (0) 496 273 060 Rue du Commerce 31, 1000 Brussels (Belgium) Page 2 Position Paper 4 September 2023 While the removal of the customs threshold has the potential to level the playing field between EU e- commerce businesses competing with third country direct imports to EU consumer (as these third country sellers are often subject to less regulatory oversight and compliance obligations as well as benefiting from more favourable domestic economic incentives (subsidies, lower tax rates) than EU companies), the aim of levelling the playing field may also be achieved by other means, more direct and efficient than the de minimis removal.

…levelling the playing field may also be achieved by other means, more direct and efficient than the de minimis removal. On the one hand, the Report of the EU Wise Persons Group on Challenges Facing the Customs Union clearly acknowledges the fraud potential caused by the €150 Euro threshold and explicitly recommends the removal. On the other hand, the Copenhagen Economics study (2023) on Customs duty de minimis1 clearly shows that a removal of the EU de minimis could have negative impacts on businesses (esp. small and medium enterprises, SMEs), EU customers and more broadly, the EU’s position in the global trade arena. This recent study does not take into account the EU Customs reform proposal (which includes some trade facilitation measures and simplifications, see next sections) but we believe it is important to highlight the potential impact of the threshold removal.

…see next sections) but we believe it is important to highlight the potential impact of the threshold removal. • Firstly, from a general perspective, increased costs on low value consignments could risk hampering trade opportunities and exports towards the EU especially for the businesses which heavily rely on the EU’s tariff-free regime to profit margins and stay afloat. Many developing countries, particularly those with smaller economies, heavily rely on exports of low-value goods to the EU to stimulate economic growth and create employment opportunities. The increased costs associated with customs duties and the removal of the de minimis can hinder their ability to compete in the EU market. Moreover, the removal may further widen the trade imbalance between developed and developing countries, by placing a disproportionate burden on exporters from less economically advanced regions.

…and developing countries, by placing a disproportionate burden on exporters from less economically advanced regions. As this customs policy reform may provide for less incentives for businesses to export to the EU, this could result in them seeking new opportunities in other third countries. Furthermore, often SMEs utilise the de minimis threshold to import intermediary goods and other items that are important for their business, such as prototypes. In fact, an article recently published in The Well News stated that small and medium size business rely on de minimis to import cutting-edge technology in order to bring ideas to life. Further, many of these companies then “bring their prototypes back […] for manufacturing. De minimis drastically reduces their time to market, supporting the next generation of manufacturing”.

…manufacturing. De minimis drastically reduces their time to market, supporting the next generation of manufacturing”. • In addition, the removal of the customs exemption could trigger other non-EU countries to introduce similar provisions and retaliatory measures. For example, legislation pending before the U.S. Congress (proposed by Louisiana Senator Cassidy) would impose “reciprocal” de minimis treatment on goods entering the U.S. if the European Commission pursues the elimination of the remaining de minimis treatment, the U.S. could be more inclined to adopt the pending bill – thereby removing de minimis treatment for EU products coming to the U.S. which currently stands at 800 USD.

…bill – thereby removing de minimis treatment for EU products coming to the U.S. which currently stands at 800 USD. • Under the new customs system, the H7 declaration would no longer be applicable, which will compel large number of companies, especially SMEs that do not necessarily get the Trust & Check 1 Copenhagen Economics study for EU Express Association (2023) on Customs Duty de minimis. Available at: https://copenhageneconomics.com/publication/study-on-customs-duty-de-minimis/ www.ecommerce-europe.eu | [email protected] | +32 (0) 496 273 060 Rue du Commerce 31, 1000 Brussels (Belgium) Page 3 Position Paper 4 September 2023 status, to abandon the super-reduced dataset and adopt the H1 full declaration dataset. This shift could cause several difficulties and administrative burden on companies, marketplaces and postal and logistics operators.

…cause several difficulties and administrative burden on companies, marketplaces and postal and logistics operators. • On another note, the removal of the de minimis is presented as the solution that will tackle undervaluation. Whilst the issue of undervaluation cannot be denied, pieces of research questions whether it is driven by the de minimis threshold . While the low value consignments will generate customs duty revenue, it may still not reflect actually import values since suppliers of low value goods could still declare a lower value to keep the duty impact as low as possible.

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…www.ecommerce-europe.eu | [email protected] | +32 (0) 496 273 060 Rue du Commerce 31, 1000 Brussels (Belgium) Page 1 Position Paper 3 April 2023 Ecommerce Europe’s feedback on the VAT in the Digital Age proposal Ecommerce Europe welcomes the opportunity to provide feedback on the “VAT in the Digital Age” proposal1 of the European Commission, which is a big step forward to delivering a simplified and modernised VAT system in the EU. Our paper addresses first and foremost the pillar on Single VAT Registration in the EU2 as this will be a key simplifier for businesses operating in the EU. However, alongside the comments on the changes to the Union One Stop Shop (UOSS) and the Import One Stop Shop (IOSS), this paper will also touch upon the main changes proposed by the Platform economy and Digital reporting requirements pillars. As technical discussions progress, we encourage the EU…

…concept, including the introduction of the transfer module and the expansion of the Union One Stop Shop scheme. 1. Feedback concerning the Single VAT Registration in the EU (a) Feedback on the Union One Stop Shop Ecommerce Europe warmly welcomes the extension of the UOSS to cross border movement of own inventory across the EU and to domestic sales from distribution hubs by a business that is not established in that country. Ecommerce Europe encourages Member States to reach consensus on this pillar, as it would be a pivotal tool to reduce the need for costly, time-consuming and often prohibitive need for businesses wanting to sell products across the EU to maintain multiple VAT registrations in different Member States. Amendments to the text of the proposal should be in line with the main objective of reducing the VAT administrative burden for businesses.

…of the proposal should be in line with the main objective of reducing the VAT administrative burden for businesses. To achieve this, it is key that there is no (or very limited) negative VAT cash flow impact when businesses opt to report through the UOSS and the transfer module. Any newly introduced obligations for businesses and for electronic interfaces facilitating the transfer and/or the sale of goods should be proportional and ensure a level playing field. The Union One Stop Shop (in place since 1 July 2021) is a great step forward in simplifying VAT for businesses as it provides a great base from which to build an EU single VAT registration. Key to this is the proposed expansion such that taxpayers can use it for use cases that were not included in the 1 July 2021’s VAT E-commerce Package.

…such that taxpayers can use it for use cases that were not included in the 1 July 2021’s VAT E-commerce Package. In particular, in line with our existing campaign on this topic (see https://simplify-vat.eu/), we welcome (i) the introduction of the transfer module for the reporting of intra-EU transfers of own inventory, (ii) the extension of the UOSS to domestic B2C sales and (iii) the introduction of an EU harmonized reverse charge 1 Proposal for a directive as regards VAT rules for the digital age – COM(2022) 701 2 Proposal for an implementing regulation as regards information requirements for certain VAT schemes – COM(2022) 704 Ref. Ares(2023)2412230 - 03/04/2023 www.ecommerce-europe.eu | [email protected] | +32 (0) 496 273 060 Rue du Commerce 31, 1000 Brussels (Belgium) Page 2 Position Paper 3 April 2023 mechanism for domestic B2B sales.

…060 Rue du Commerce 31, 1000 Brussels (Belgium) Page 2 Position Paper 3 April 2023 mechanism for domestic B2B sales. These three components together remove the need for businesses storing and selling across the EU to VAT register in multiple EU countries. An extremely positive reform is the introduction of the transfer module for the reporting of transfers of own goods, which were found to be the most crucial area to solve for in the VAT in the Digital Age Impact Assessment study. This is an important use case for a wide variety of industries, i.e. the benefits are not limited to e-commerce.

…study. This is an important use case for a wide variety of industries, i.e. the benefits are not limited to e-commerce. A well-designed system that includes cross-border transfers of own goods would benefit lessors of moveable property, customers of toll manufacturers, retailers & wholesalers using remote fulfilment, consignment stock sellers, e-mobility providers, agricultural producers, touring events companies, businesses engaged in sale-or-return contracts and many more. We also welcome the introduction of a harmonised reverse charge mechanism for B2B supplies from remote inventory where the supplier is not established for VAT purposes in the Member States in which VAT is due.

…from remote inventory where the supplier is not established for VAT purposes in the Member States in which VAT is due. This solution, to prevent suppliers’ registration obligations as a result of B2B sales, is key as businesses often make supplies to both B2B and B2C customers, and the EU single VAT ID simplification for B2C sales would be undermined if there is no VAT registration relief for B2B sales. From our understanding, the introduction of this reverse charge mechanism is mandatory for Member States, but still optional for suppliers.

…the introduction of this reverse charge mechanism is mandatory for Member States, but still optional for suppliers. To conclude, the expansion of the Union One Stop Shop (‘UOSS’), the introduction of a transfer module and the EU harmonised reverse charge for B2B domestic sales allowing businesses to use one single VAT registration to report transfers of own inventory to locations across the EU, as well as the onward sales in those locations, is a key reform for businesses.

…inventory to locations across the EU, as well as the onward sales in those locations, is a key reform for businesses. Centralising and standardising VAT registration and reporting requirements in this manner is a win-win approach where the European Commission can unlock major benefits for governments, tax authorities, businesses, consumers and the environment: • Tax authorities will benefit from increased compliance, facilitated reporting and auditing of cross- border goods movements and increased on-shoring of goods and services trade. • National governments will benefit from a more competitive EU market and increased trade, leading to additional tax revenues. • Businesses, particularly SMEs, will gain greater access to intra-EU trade, be more competitive and incur fewer tax compliance fees.

…particularly SMEs, will gain greater access to intra-EU trade, be more competitive and incur fewer tax compliance fees. • Customers will be able to access more competitive prices, faster delivery and a greater choice of goods. • The environmental impact of EU consumption will be reduced. For example, a regime covering pan-EU inventory storage in e-commerce would encourage bulk inventory placements close to customers, which cause considerably lower CO2 emissions than orders individually shipped for long distances. • Customs authorities will have a reduced workload as bulk shipments from third countries for onward distribution within the EU will be encouraged. This will reduce the current influx of individual packet shipments from third countries.

…the EU will be encouraged. This will reduce the current influx of individual packet shipments from third countries. Ecommerce Europe’s recommendations - Ecommerce Europe strongly supports the introduction of the transfer module, the extension of the UOSS and the EU harmonized reverse charge mechanism for B2B domestic sales. We encourage www.ecommerce-europe.eu | [email protected] | +32 (0) 496 273 060 Rue du Commerce 31, 1000 Brussels (Belgium) Page 3 Position Paper 3 April 2023 EU countries to prioiritise negotiations on this part of the proposal, given the significant simplification potential for businesses it holds.

…negotiations on this part of the proposal, given the significant simplification potential for businesses it holds. - Taking account of the massive and consistent changes and improvements for the e-commerce sector in Europe that the VAT in the Digital Age proposal puts forward, there are a number of areas in the proposal that would merit further clarification to avoid any legal uncertainty. Taking stock of the implementation of the different UOSS schemes in the EU Member States throughout 2021 and 2022, Ecommerce Europe would also like to call on the European Commission to provide for Member States’ technical solutions and guidance for OSS returns. In this regard, the Member States have sometimes failed to provide a file upload / technical solution for the OSS returns.

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Ecommerce Europe - www.ecommerce-europe.eu - Rue d’Arlon 69-71 B-1040 Brussels - +32 (0) 2 502 31 34 [email protected] - Twitter - LinkedIn 29 April 2020 Ecommerce Europe’s Contribution to the European Commission’s Roadmap1 on the GDPR Report Introduction Ecommerce Europe is a member of the European Commission’s Multistakeholder expert group to support the application of Regulation (EU) 2016/679 (GDPR) and has actively contributed to the work of the group, including with answers to internal consultations. Therefore, this document, which gathers members’ feedback and experiences in relation to the application of the GDPR, also includes elements already shared with the Commission’s expert group. 1. General issues reported in complying with the GDPR Ecommerce Europe’s members highlighted that there is still legal uncertainty with regard to several rules in the GDPR.

Europe’s members highlighted that there is still legal uncertainty with regard to several rules in the GDPR. For example, how detailed must the documentation be, in particular the record of processing activities according to Art. 30 GDPR? Which circumstances fall under Art. 28 GDPR (processing is carried out on behalf of a controller)? What is the correct legal basis for the use of cookies, analysis and marketing tools for websites? How detailed must the information be according to Art. 13 and 14 of the GDPR, how should this information be provided during phone calls? For which types of processing is a data protection impact assessment mandatory? In Germany, the DPAs try to help answer those questions and provides a lot of guidelines and information. Unfortunately, there are 18 DPAs in Germany and often they do not have the same opinion on several questions.

Unfortunately, there are 18 DPAs in Germany and often they do not have the same opinion on several questions. Furthermore, the German DPAs declare parts of the new Federal Data Protection Act (FDPA), in particular Section 4 “Video surveillance of publicly accessible spaces”, as incompatible with the GDPR. In this context, a business may not know exactly how to be compliant with the GDPR. This leads not only to frustration and aversion for the GDPR but also to a decline of investments. Furthermore, members highlighted that there are too many obligations for SMEs in the GDPR, especially regarding the obligations on documentation. SMEs have to spend a lot of resources just to fulfil formal documentation obligations. In Germany, the same applies for the designation of the data protection officers.

…formal documentation obligations. In Germany, the same applies for the designation of the data protection officers. While the GDPR demands a DPO only for certain situations and big enterprises, the German FDPA demands the designation of a DPO already if the enterprise constantly employs - as a rule - at least 10 people dealing with the automated processing of personal data. Therefore, a wide range of SMEs are forced to designate a DPO even if the risk of data protection infringements is very low. So, again, a lot of resources have to be spent by SMEs. That is why it is of utmost importance to achieve full harmonization across the EU in this field, with same rules for all SMEs within the scope of the GDPR. This leads to the issue that the GDPR lacks exceptions for SMEs. Currently, the GDPR makes no differences between a huge data driven enterprise and a small business with 15 employees.

Currently, the GDPR makes no differences between a huge data driven enterprise and a small business with 15 employees. All enterprises have to fulfil the same obligations regarding documentation and DPO. That is why it is of utmost importance to consider the introduction of exceptions for SMEs. Indeed, the GDPR can be an extraordinarily challenging and investment-killing, particularly for start-ups. Supporting SMEs and encouraging start-ups exceptions for them in the GDPR would be absolutely necessary. 1 https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12322-Report-on-the-application-of-the-General-Data- Protection-Regulation Ref. Ares(2020)2297001 - 29/04/2020 Ecommerce Europe - www.ecommerce-europe.eu - Rue d’Arlon 69-71 B-1040 Brussels - +32 (0) 2 502 31 34 [email protected] - Twitter - LinkedIn 2.

- Rue d’Arlon 69-71 B-1040 Brussels - +32 (0) 2 502 31 34 [email protected] - Twitter - LinkedIn 2. Information obligations: Impact of the GDPR on the exercise of the rights Before the GDPR, in countries like Germany, there were already similar regulations to inform the data subjects. So, the practice as such has not changed much. Nevertheless, a problem exists regarding how detailed the provided information has to be. On the one hand, the controller should use “clear and plain language”. On the other hand, data processes are often highly technical and very complex. It is therefore not clear how to inform about such data processes in an easily comprehensible way. Furthermore, by using plain language, the information will be even more, the privacy policy even longer. So, the data subject probably will not like to read such long texts.

…will be even more, the privacy policy even longer. So, the data subject probably will not like to read such long texts. The goal of the GDPR of providing more transparency cannot thus be reached. Moreover, the way to provide the information is not clear in every case, for example in the case of orders by phone. According to a strict application of the GDPR, the information has to be provided during the call. However, this is not practical, neither in the interest of the controller nor in the interest of the data subject. Other members reported that, for Articles 12-14 GDPR, companies had to implement crucial changes to business processes and systems and invest a lot to become GDPR-proof and enable information obligations. Some examples of changes implemented are the following: • Upgrades to e-commerce databases to allow for the automated erasure of data.

…changes implemented are the following: • Upgrades to e-commerce databases to allow for the automated erasure of data. • Changes to customer service processes and tools so data subjects’ access requests can be initiated by the agents via CRM software. • Training of customer service agents to facilitate data subject rights requests. • Subscription to third-party tools to surface personal data so that it can be provided to customers in report format. • Updates to our registration processes to reinforce and better document opt-in consent. • Updates to customer account sections of our websites to enable user self-management of updates to their account data. • Investment in tools to manage content to cookies and advertising tags.

…of updates to their account data. • Investment in tools to manage content to cookies and advertising tags. With regards to the implementation of the obligation to facilitate the exercise of data subjects’ rights, members reported the issue of making clear to some data subjects that requests to erase all their data will be denied as long as the contractual relation with the controller continues and the issue on how to deal with access requests that are very broad or general and not specific (i.e. in every file where my name appears) and whether it is allowed to ask for more specification before handling the request or to handle the request providing relevant information in a layered way. Members also reported an issue related to the right of access by the data subject, which is frequently used, too extensive and often abused as a form of instrument of “vigilante justice”.

…data subject, which is frequently used, too extensive and often abused as a form of instrument of “vigilante justice”. This abusive use of the right of access is extremely burdensome for companies. Therefore, our members ask for a clear limitation of this right and more safeguards to avoid abuse, for instance in guidelines on Article 12 § 5.2 GDPR, to ensure that the right is used in a justified and proportional way only and to provide data processors with efficient means and instruments to tackle this abuse and avoidable costs. In terms of amount of requests from data subjects, our members reported that most of the requests relate to the right to erasure and access to data, which are often claimed together. With regards to the right to object, no specific increase could be noticed.

…to data, which are often claimed together. With regards to the right to object, no specific increase could be noticed. The objection right was exercised more significantly after GDPR became effective, but that has substantially dropped. Members also highlighted very seldom requests for meaningful explanation and human intervention in automated decision making, for data portability and for rectification rights. Ecommerce Europe - www.ecommerce-europe.eu - Rue d’Arlon 69-71 B-1040 Brussels - +32 (0) 2 502 31 34 [email protected] - Twitter - LinkedIn However, in some countries, the exercise of the right to data portability diverted from its original purpose and could raise serious issues for merchants in terms of competition and commercial law.

…from its original purpose and could raise serious issues for merchants in terms of competition and commercial law. Several digital marketing companies in some Member States (including France and Italy) are requesting the exercise of the right to portability on behalf of consumers who have mandated them. Those companies have been contacting merchants and requesting them all the information concerning the purchases made by the clients (products, prices, dates, times, means of payment) as well as the navigation data to be transmitted in machine-readable format and updated every month, or even every week. These companies seem to be testing an economic model by which it promises to pay consumers in return of this mandate to exercise the right to portability of their personal data, allowing the company to recover all their buying habits from the various brands they are customers of.

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…www.ecommerce-europe.eu | [email protected] | +32 (0) 496 273 060 Rue du Commerce 31, 1000 Brussels (Belgium) Page 1 Position paper 24 April 2023 Position paper on the Packaging and Packaging Waste Regulation Ecommerce Europe welcomes the publication of the proposal for a Regulation on Packaging and Packaging Waste. We are supportive of the European Commission’s ambition to clarify and harmonise packaging rules across the EU, while proposing to raise ambition to improve the sustainability of packaging and the reduction of packaging waste.

EU, while proposing to raise ambition to improve the sustainability of packaging and the reduction of packaging waste. Measures aimed at the reduction of packaging in retail have to take into consideration the multiple trade- offs that take place when defining the most sustainable way to package a product, but also the actual control that companies have over packaging throughout the supply chain (e.g., certain e-commerce business models do not allow stakeholders to control either primary or secondary packaging). Improving the sustainability of packaging is the responsibility of the whole supply chain, and packaging should be assessed through the net environmental impact over the whole life cycle of the product.

…chain, and packaging should be assessed through the net environmental impact over the whole life cycle of the product. The right balance must be found between reducing packaging or new packaging solutions and possible unintended consequences on the environment (e.g., risks of returns of damaged products if there is a lack of adequate protection, the possible challenge brought by reusable packaging and reversed logistics, and so on). Harmonisation of labelling Ecommerce Europe particularly welcomes the European Commission’s efforts to further harmonise packaging and packaging waste rules across the EU. One of merchants’ key concerns regarding packaging in the EU remains the diverging rules on issues such as labelling or extended producer responsibility.

…packaging in the EU remains the diverging rules on issues such as labelling or extended producer responsibility. The fragmentation of the EU legislative landscape creates a substantial administrative and financial burden on companies, especially when it comes to navigating various requirements or complying with differing registration and reporting procedures across markets. Moreover, variations in labelling rules create challenges for companies operating cross-border and can lead to additional packaging having to be produced just to comply with different requirements from importing countries or preventing economies of scale for certain types of packaging. The current situation creates significant direct and indirect barriers to companies’ sustainable efforts for packaging. Therefore, we strongly encourage policymakers to maintain this level of ambition throughout the discussions.

Therefore, we strongly encourage policymakers to maintain this level of ambition throughout the discussions. Key Recommendations 1. Maintain the current level of ambition for the harmonisation of requirements for packaging in the EU. 2. Pursue the ambitious objective to develop a simplified, harmonised, digitalised European system for Extended Producer Responsibility to prevent the creation of further barriers to the Single Market 3. Carefully assess the existing challenges and limits encountered by companies when trying to reduce packaging and void-space, to focus on the most efficient and feasible approach 4. When setting and defining ways to reach the proposed targets for reusable packaging, consider the full life-cycle and the environmental impact of such packaging, the feasibility of its roll-out as well as the role of other waste prevention measures Ref.

…impact of such packaging, the feasibility of its roll-out as well as the role of other waste prevention measures Ref. Ares(2023)2892256 - 24/04/2023 www.ecommerce-europe.eu | [email protected] | +32 (0) 496 273 060 Rue du Commerce 31, 1000 Brussels (Belgium) Page 2 Position paper 24 April 2023 We strongly welcome the Commission’s proposal (article 11 on labelling of packaging) to draft secondary legislation (implementing act) to establish a harmonised label and specifications for the labelling requirements and formats for the labelling of packaging (regarding material composition, deposit and return system, reusability, recycled content and the labelling of waste receptacles). This will lift a burden for merchants, while considerably facilitating consumers sorting out domestic waste.

This will lift a burden for merchants, while considerably facilitating consumers sorting out domestic waste. We do however call on policy-makers to accelerate the timeline for the drafting and adopting of the implementing acts to establish a harmonised label and specifications for the labelling requirements (Article 11.5), which is currently set at 18 months after the date of entry into force of the Regulation. We would also like to stress that the transition period for companies to implement new labelling requirements should only start after the publication of secondary legislations, and sufficient time should then be granted.

…should only start after the publication of secondary legislations, and sufficient time should then be granted. We also, encourage policymakers to clarify provisions that could allow for diverging labelling rules at national level, including articles 4(5) and 11(8) which seem to leave the door open for Member States to provide for further EPR or deposit and return system labelling requirements. Extended Producer Responsibility The EPR landscape in Europe is extremely fragmented, with a wide variety of systems and rules from one Member State to another, and sometimes within a given Member State with different compliance schemes or procedures and for different product categories. Developments at national level, without sufficient coordination or basis for harmonization, risk reinforcing existing barriers to trade and the contribution to EPR in the EU.

…or basis for harmonization, risk reinforcing existing barriers to trade and the contribution to EPR in the EU. The impact of such fragmentation, in particular for small and medium-sized enterprises, has been highlighted repeatedly by the industry over the past years. We welcome the European Commission’s attempt at harmonizing certain aspects of EPR requirements for packaging and facilitating, to some extent, registration and compliance monitoring. The implementing act in Article 39(11) is a crucial first step towards further harmonisation and should be a priority for the Commission.

Article 39(11) is a crucial first step towards further harmonisation and should be a priority for the Commission. We however strongly encourage the extension of the scope of the implementing act to other crucial aspects such as key definitions (e.g the definition of what is an “authorised representative”); the target of the registration requirement, when how and how often should the reporting occur and finally eco-modulation criteria. However, while further harmonisation would simplify the work of companies, it is still far from sufficient to make EPR workable in the EU, especially for SMEs. This is one of the most important barriers to cross- border trade for companies in the EU today. Ecommerce Europe believes that a much wider overhaul of EPR requirements and systems is needed, and this Proposal should set the tone for future reform of EPR.

…overhaul of EPR requirements and systems is needed, and this Proposal should set the tone for future reform of EPR. While we welcome the Commission’s intention behind the introduction of national registers (Article 39.1), we strongly believe that this is a missed opportunity to create a truly European solution. We strongly encourage the European Commission and policy-makers to consider a much more ambitious approach, with the creation of a one-stop-shop solution that could facilitate one single registration and reporting across all Member States for companies operating across borders (either through a unique EU register and reporting system or through the automatic sharing and mutual recognition of registration and reporting data among national scheme), similar to the system created for VAT in the EU.

…recognition of registration and reporting data among national scheme), similar to the system created for VAT in the EU. Recommendations: • Maintain harmonisation labelling packaging, and accelerate the timeline for the drafting of the implementing act in Article 11.5 • Clarify provisions that could allow for diverging EPR and DRS labelling at national level, including articles 4(5) and 11(8) www.ecommerce-europe.eu | [email protected] | +32 (0) 496 273 060 Rue du Commerce 31, 1000 Brussels (Belgium) Page 3 Position paper 24 April 2023 Finally, it is important to engage in a discussion on how EPR systems can adapt to digitalisation.

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…www.ecommerce-europe.eu | [email protected] | +32 (0)2 502 31 34 Rue d’Arlon 69-71, 1040 Brussels (Belgium) Page 1 Response to Call for Evidence 6 April 2022 Ecommerce Europe’s Evidence Paper on the Single VAT ID Ecommerce Europe welcomes the opportunity to reply to the call for evidence on the VAT in the Digital Age proposal of the European Commission. Ecommerce Europe fully supports the European Commission’s ambition to reduce VAT-related barriers for cross-border trade in the EU, in particular the work towards a single EU VAT registration. A single VAT ID will be a huge simplifier to reduce the need for costly and time-consuming multiple VAT registrations that are today still required despite the 2021 changes introduced by the VAT E-commerce Package.

VAT registrations that are today still required despite the 2021 changes introduced by the VAT E-commerce Package. In the current system, neither movements of retail inventory across EU countries, nor the onward sale of that inventory, are eligible for the VAT One-Stop Shop (OSS) system, resulting in VAT registration requirements for every EU country of storage. This means that, despite the expansion of the VAT OSS scheme on 1 July last year, businesses will still be required to VAT register in every country in which they store stock (even in situations where sales activities are not undertaken in the storage location). Businesses should be able to choose to store inventory closer to their customers to shorten delivery times, and to report VAT on their entire EU logistics chain through a single portal.

…customers to shorten delivery times, and to report VAT on their entire EU logistics chain through a single portal. In particular, it is key that the upcoming VAT in the Digital Age reform extends to: (1) cross-border movement of own inventory across the EU (with no or limited cash-flow cost for businesses), and (2) domestic B2C sales of goods by a seller that is not established in that EU country. It should also be allowed to report domestic B2B sales unless a wide-ranging pan-EU reverse charge mechanism is implemented for domestic sales. Without this change, the EU VAT system will continue to disadvantage European businesses and put administrative borders across the Single Market.

VAT system will continue to disadvantage European businesses and put administrative borders across the Single Market. Currently, a business must file an average of 13 documents to complete one VAT registration process, wait for 100 days on average to receive a VAT number, submit up to 60 VAT & statistical filings per country yearly, and spend thousands of Euros in compliance costs. The importance of this matter to the European businesses, particularly small and medium-sized enterprises (SMEs), is also highlighted in a dedicated Campaign on this topic that we launched to raise awareness of the need for this reform: https://simplify-vat.eu/ The benefits of a Single VAT ID extend to tax authorities, customs authorities, national treasuries, businesses, consumers and the environment.

VAT ID extend to tax authorities, customs authorities, national treasuries, businesses, consumers and the environment. • Tax authorities will benefit from increased compliance, facilitated reporting and auditing of cross- border goods movements. • National governments will benefit from a more competitive EU market and increased trade, leading to additional tax revenues. • Businesses, particularly SMEs, will gain greater access to intra-EU trade, be more competitive and incur fewer tax compliance fees. Besides e-commerce, benefits extend to other sectors too such as toll manufacturing, leasing of moveable property, wholesaling, manufacturing with movement of machinery etc. • End-consumers will be able to access more competitive prices, faster delivery and a greater choice of goods. • The advantages of a Single VAT ID also extend to environmental concerns.

…delivery and a greater choice of goods. • The advantages of a Single VAT ID also extend to environmental concerns. For example, a regime covering pan-EU inventory storage in e-commerce would encourage bulk inventory Ref. Ares(2022)3439367 - 04/05/2022 www.ecommerce-europe.eu | [email protected] | +32 (0)2 502 31 34 Rue d’Arlon 69-71, 1040 Brussels (Belgium) Page 2 Response to Call for Evidence 6 April 2022 placements close to customers, which have considerably lower CO2 emissions than orders individually shipped for long distances1. • As well as being green, bulk shipments from third countries also reduce burdens on national customs authorities compared to individual packet shipments.

…from third countries also reduce burdens on national customs authorities compared to individual packet shipments. Given the wide-ranging benefits, Ecommerce Europe calls on the EU Institutions, and in particular the European Commission, to publish and adopt legislative proposals for a single EU VAT registration number in order to complement the VAT OSS and enable businesses selling online to have a unique VAT ID and report all the VAT through the single digital VAT portal. About Ecommerce Europe Ecommerce Europe is the sole voice of the European Digital Commerce sector. As a result of joining forces with EMOTA, Ecommerce Europe now represents, via its national associations, more than 150,000 companies selling goods and services online to consumers in Europe.

…via its national associations, more than 150,000 companies selling goods and services online to consumers in Europe. Ecommerce Europe acts at European level to help legislators create a better framework for online merchants, so that their sales can grow further. 1 “A direct air e-commerce shipment from a distribution centre in Asia causes 25 times more CO2e than an e-commerce shipment from a mass storage facility in the EU which first sources products by sea, before shipping them to end consumers by road.” Wyman, O. (2020) Is E-commerce Good for Europe? Economic and Environmental Impact Study. Executive Summary, p. 8. Available at: https://www.oliverwyman.com/content/dam/oliver-wyman/v2/publications/2021/apr/is-ecommerce-good-for- europe-english.pdf

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…www.ecommerce-europe.eu | [email protected] | +32 (0)2 502 31 34 Rue d’Arlon 69-71, 1040 Brussels (Belgium) Page 1 Response to Call for Evidence 19 September 2022 Call for evidence for an impact assessment for the reform of the Union Customs Legislation Evidence Paper Ecommerce Europe welcomes the EU’s ambition to make customs smarter, more data centric, fit for the twin digital and green transitions. We strongly believe we have a shared interest with the EU to make customs processes and controls more efficient and harmonised as this reduces the costs and time to process imports, facilitates international cross-border trade and minimises delivery delays and unexpected costs for our customers.

…facilitates international cross-border trade and minimises delivery delays and unexpected costs for our customers. Increased customs control capabilities and proactive control measures through the use of technology are equally key, as well as enhancement of customs relevant data in order to minimise safety risks for customers, to help fight customs duty and VAT fraud and to protect and grow revenues for Governments. We welcome this opportunity to provide feedback to the call for evidence for an impact assessment for the reform of the Union Customs legislation. More details on our feedback are provided in the annex.

…assessment for the reform of the Union Customs legislation. More details on our feedback are provided in the annex. Overarching principles for a successful reform of the Customs Union As the initiative aims to tackle a broad range of complex customs issues that will affect a broad range of stakeholders, we believe it is helpful to firstly set out the overarching principles which should be the basis of the reform: • The reform should safeguard channel neutrality and a level playing field for all forms of trade and commerce business models, regardless of where they are established. • The reforms should be data driven and based on thorough economic research, in particular when identifying and prioritizing the problems that need to be solved. • The policy solutions considered should be based on economic reality of how businesses operate.

…need to be solved. • The policy solutions considered should be based on economic reality of how businesses operate. Proportionality of any new obligations for businesses should be safeguarded. • The reform should facilitate genuine trade to and from the EU. Control and enforcement should focus on the highest risk area’s (risk-based approach). • The reformed rules should be effectively enforceable by customs authorities, also against non-EU actors. • Any interaction with other legislation such as for example VAT should be considered early on in the customs reform process. Ref. Ares(2022)6465744 - 19/09/2022 www.ecommerce-europe.eu | [email protected] | +32 (0)2 502 31 34 Rue d’Arlon 69-71, 1040 Brussels (Belgium) Page 2 Response to Call for Evidence 19 September 2022 Annex 1.

…502 31 34 Rue d’Arlon 69-71, 1040 Brussels (Belgium) Page 2 Response to Call for Evidence 19 September 2022 Annex 1. Harmonisation and Standardisation: Customs functioning ‘as one’ Increased harmonisation and standardisation of customs processes across the EU are key to facilitate trade whilst ensuring that bad actors cannot direct their import flows towards countries with lower risk perception. While moving towards more uniform application of Customs law, the EU must be aiming at the highest quality solutions that allow meeting facilitation and control goals at the same time and avoid, by all means, equalling to the common denominator among the Member States. Businesses are regularly confronted with a non-unified approach by the customs authorities of different member states in terms of the interpretation and practical application of customs legislation.

…authorities of different member states in terms of the interpretation and practical application of customs legislation. Combined with a highly diverging risk perception across member states, this results in very significant differences in pre- clearance and clearance processes as well as average lead times and inspection rates across member states and – also –among various customs offices within single members states. An example of where harmonisation of customs systems and processes is urgently needed are the lists of goods subject to Prohibitions & Restrictions (P&R). The lists vary across the different Member States and trigger complex documentation requirements for businesses. In addition, the lists are not transparently available in each Member State, making it very difficult for businesses to anticipate the customs treatment at the EU border.

…in each Member State, making it very difficult for businesses to anticipate the customs treatment at the EU border. Import One Stop Shop (IOSS) shipments containing P&R goods are currently also triggering double VAT taxation as an H1 customs declaration is required for these, and customs authorities in some Member States are unable to recognise IOSS numbers in this type of declaration, even though P&R shipments are IOSS eligible. We recommend the EU Commission to address this issue by increasing transparency of the P&R lists, while working towards an EU harmonised P&R list on longer term. It is not just about the practical ‘act as one’. The lack of legal harmonisation on a number of issues is also detrimental to the competitiveness of the EU and within the EU, and the way companies can organise themselves in an economically viable and efficient way.

…of the EU and within the EU, and the way companies can organise themselves in an economically viable and efficient way. This is true for both large companies and SMEs. One example is the empowerment of the customs representative, which is subject to its own formalities (and associated uncertainties) in each of the member states, which does not promote the single market. Another example is the approach to non-compliance and the sanctions policy, which for the same violation leads to completely different results in the member states. 2. Simplifications for trusted traders A key mechanism to increase efficiency of the EU Customs Union should be to further facilitate trade by trusted traders, as this will support compliant and legitimate businesses while allowing customs authorities to focus more on fraud and non- compliance risk areas.

…and legitimate businesses while allowing customs authorities to focus more on fraud and non- compliance risk areas. This should be achieved by allowing enhanced benefits for Authorised Economic Operators (AEO). The AEO program needs to be incrementally improved in terms of simplifications or reductions it provides from clearance processes and lead times by – especially – factual departure from transaction-based approach and bolder move to one based on processes, which is more than feasible already given the development of the IT infrastructure both on Customs’ and traders’ side.

…which is more than feasible already given the development of the IT infrastructure both on Customs’ and traders’ side. Another key simplifier that should urgently be www.ecommerce-europe.eu | [email protected] | +32 (0)2 502 31 34 Rue d’Arlon 69-71, 1040 Brussels (Belgium) Page 3 Response to Call for Evidence 19 September 2022 operationalised for AEO traders is the centralised customs clearance capability designed in a way that would truly be centralised (i.e. with the decisive role of the MS of identification only). AEO traders should also have access to post-entry data to check for any inconsistencies with for example Import One Stop Shop return data.

…have access to post-entry data to check for any inconsistencies with for example Import One Stop Shop return data. It should also allow for goods to be released by AEO trusted traders without the involvement of the customs authorities at the border (self-clearance, organised in a similar way as VAT reporting and payments), in order to ensure that trade operate smoothly, particularly in the case of just-in- time consignments; depart from transactional base clearance and develop periodical reporting only, especially for AEO, as new enhanced benefit. However, due to the fact that obtaining AEO certificate is a complicated and expensive process and as such could be a blocker for smaller, in particular non-global traders (e.g. platforms), the additional benefits and simplification granted to AEO holders should be balanced with easier accessibility to AEO or system solution for smaller, e.g.

…granted to AEO holders should be balanced with easier accessibility to AEO or system solution for smaller, e.g. non-globally active traders and platforms. Otherwise, smaller traders could be pushed out of the market. Therefore, we would also encourage the EU Commission to generally simplify customs clearance across the board. Current UCC standard clearance path consists of too many steps and entries, while simplified processes can be utilised only by companies complying with AEO criteria. While it is fully understandable that customs simplifications can only be granted to trusted traders, SMEs and other small traders should also directly benefit from the UCC reform. In order to achieve that, the current simplifications should become a standard in the EU, while a new level of simplifications, as mentioned above, should be implemented to be used by trusted traders. 3.

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