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The EU is preparing to deal with a growing flood of parcels from Asian online retailers such as Temu and Shein, following a surge in e-commerce that largely avoids EU customs checks.
Measures under consideration include a new tax on e-commerce platform revenue and an administrative handling fee per item that would make most shipments less competitive, according to five people familiar with the discussions.
European Trade Commissioner Maroš Šefčovič said that around 4 billion packages of lower value will be transferred to the EU this year, which is almost three times more than in 2022. The sheer volume and the fact that they are below the threshold of 150 euros for customs means that most of them are not checked , which leads to an increase in the import of dangerous goods such as toxic toys.
While the EU executive is targeting the business model of popular internet platforms such as China’s Temu i Sheinwhich was founded in China but is now based in Singapore, no decisions were made and every action was complicated by international law, the people said.
EU officials are concerned about undercutting by European competitors who face higher production costs to comply with EU standards and the negative impact of cheap imports on retailers.
Security authorities in the bloc have detected an increasing number of dangerous and counterfeit goods, many of which are sent directly to consumers.
China also benefits from subsidized postage costs, which means it is profitable to send cheap goods by air. The EU executive has already proposed the abolition of a Value threshold of €150 according to which packages are exempted from customs duty, a step taken by the US as well.
But that would only increase the burden on the already overburdened customs officials. Amsterdam’s Schiphol Airport and the Port of Rotterdam together handle 3.5 million packages a day — or 40 a second.
“There is no way to check all that,” said an EU diplomat.
Price levels have not been set for a handling charge, but such a charge would apply to any online retailer shipping to EU customers directly outside the bloc. US-based Amazon typically uses sellers based in Europe.
EuroCommerce, which represents EU retailers, welcomed the planned action but said the processing fee would be difficult to justify under WTO rules that limit the amount of duties and customs processing fees to the approximate cost of the service provided.
“For now, we encourage the European Commission and member states to step up enforcement at national and EU level and break down silos between different enforcement domains,” it said. “The new rules will take years to take effect.”
The number of dangerous products reported by EU countries has increased by more than half to more than 3,400 in 2023 compared to the previous year. Cosmetics, toys, electrical appliances and clothing were among the products with the biggest security concerns.
The Union is also investigating the topic in an attempt to reduce the flow of unsafe products such as toys and cosmetics that do not meet EU standards. Under digital services laws in Brussels, potential penalties include heavy fines and even banning platforms from operating in a given country.
A tax on the income of e-commerce platforms, which would apply to EU companies as well as foreign companies, would require the approval of the bloc’s 27 member states and could hurt European companies at a time when Europe is trying to boost digitalisation, the people said is.
Incoming commission. which started work on December 1, hopes to produce a proposal by February, according to an internal document seen by the Financial Times.
“E-commerce will be a key priority of the new commission’s mandate, especially strengthening measures to prevent non-compliant products from entering the EU market,” said the commission’s spokesperson.
Temu said: “We support policy changes that benefit consumers.” We believe that fair policies will not affect competitive business dynamics.”
Shein said: “We fully support reforms that benefit European consumers and ensure transparent competition on a level playing field.”
Additional reporting by Eleanor Olcott in Beijing and Alice Hancock in Brussels
