EC proposes customs duties for goods valued below 150 euros

The European Commission proposed a reform of the EU customs union on Wednesday, which, among other things, introduces customs duties for products valued below 150 euros.

The proposed reform abolishes the current threshold under which goods valued at less than 150 euros are exempt from customs duties, a loophole that fraudsters have widely exploited. The Commission states that it is a common practice to undervalue packages entering the EU to avoid paying customs duties.

According to the new proposal, online platforms will become key players in ensuring that goods sold online in the EU meet all customs obligations. This marks a significant shift from the current customs system, which places the responsibility on individual consumers and carriers. Platforms will be responsible for ensuring the payment of customs duties and VAT at the time of purchase, so consumers will no longer be exposed to hidden fees or unexpected paperwork when receiving packages.

As online platforms are official importers, consumers in the EU can be assured that all fees have been paid and that their purchases are safe and compliant with the EU’s environmental, safety, and ethical standards.

The calculation of customs duties for the most common low-value products purchased from outside the EU is also simplified, reducing thousands of possible customs categories to just four. This will significantly ease the calculation of customs duties for small packages, helping both platforms and customs authorities better process the billion items purchased in e-commerce that enter the EU each year.

The new, tailored e-commerce regime is expected to generate additional customs revenue of one billion euros annually.

Commissioner for Economy Paolo Gentiloni stated that the introduction of customs duties on goods valued below 150 euros should not lead to an increase in consumer prices.

– “That is not our goal. Customs duties on small packages will be very low. We expect that revenues from e-commerce for member states will reach one billion euros annually, simply because a larger number of packages will be minimally taxed,” said Gentiloni.

The proposal foresees the establishment of a new EU customs body that will oversee the customs data center. Over time, the data center will replace the existing customs IT infrastructure in EU member states, saving them up to two billion euros annually in operational costs. The new body will also assist in achieving improved EU access to risk management and customs checks.

In the reformed EU customs union, businesses wishing to import goods into the EU will be able to enter all information about their products and supply chains into a single online environment: the new EU customs data center. Using state-of-the-art technology, data provided by businesses will be collected, allowing competent authorities to have a comprehensive overview of supply chains and the movement of goods, aided by machine learning, artificial intelligence, and human intervention.

The Commission emphasizes that this is the most comprehensive reform of the EU customs union since its establishment in 1968. Turkey is also a member of the customs union, meaning it can trade with the EU without tariffs but cannot have its completely independent trade policy.

On the other hand, the recently departed EU member, the United Kingdom, did not want the “Turkish option” and opted to leave the customs union, creating significant issues in Northern Ireland.

– “The long-awaited reform is part of our plan to strengthen the EU’s open strategic autonomy. It will enable EU customs authorities to better defend our financial and economic interests while simultaneously ensuring the safety and protection of goods entering the EU,” stated Executive Vice-President of the Commission Valdis Dombrovskis.

The Commission’s proposal must be approved by the EU Council and the European Parliament.