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E-Commerce Regulation and Facilitation a High Priority for U.S. and Others

Friday, May 04, 2018
Sandler, Travis & Rosenberg Trade Report

Authorities and trade industry members in the U.S. and around the world are continuing to take steps to respond to the rapid growth in e-commerce shipments, which poses challenges related to security, revenue collection, and regulatory compliance. Several recent developments are highlighted below. For more information on e-commerce rules, click here to register for ST&R’s upcoming webinar.

WTO. As part of a work program that could lead to negotiations on an e-commerce agreement among World Trade Organization members, the U.S. submitted a paper outlining a number of suggested priorities, including (1) ensuring that both consumers and companies are able to move data across borders without arbitrary or discriminatory restrictions, (2) ensuring that companies are not required to build or employ unique, capital-intensive digital infrastructure in every jurisdiction they serve, (3) continuing to provide duty-free treatment for digital products, (4) prohibiting forced technology transfer and the sharing of source code, trade secrets, or algorithms as a condition for market access, (5) ensuring the ability to use innovative and secure encryption technology, (6) adopting a risk-based approach to cybersecurity, (7) adapting regulatory frameworks, (8) ensuring competitive telecommunications markets, and (9) fully implementing the WTO’s Trade Facilitation Agreement.

WCO. The World Customs Organization’s Working Group on E-Commerce has finalized a draft framework of standards designed to help WCO members develop e-commerce strategic and operational frameworks in cooperation with stakeholders. The WCO states that this framework will be supported by an implementation strategy, action plan, and capacity-building mechanism and will also be enriched with technical specifications, guidelines, and case studies.

The WGEC also recently (1) held a preliminary discussion on the data elements needed for effective risk management and speedy clearance of e-commerce shipments, together with who would have that data and who could provide it in a timely manner, and (2) approved an updated version of the Immediate Release Guidelines, which have been adapted to the e-commerce environment to support the expeditious release and clearance of e-commerce shipments and parcels.

NAFTA. Dozens of members of the House of Representatives wrote to U.S. Trade Representative Robert Lighthizer urging him to include in a revised NAFTA “provisions that will facilitate e-commerce transactions and remove customs red tape in North America.” In particular, the U.S. should push Canada and Mexico to increase the de minimis value of shipments under which formal entry is not required; these levels are currently $16 and $50, respectively, the letter said, compared to $800 for the U.S. The representatives also called for Canada and Mexico to improve their informal clearance procedures.

CBP. U.S. Customs and Border Protection Commissioner Kevin McAleenan told a House subcommittee that the agency will be looking to enhance its Automated Commercial Environment to enable de minimis functionality, which will provide access to previously unavailable admissibility data for the low-value shipments that are typical of e-commerce transactions. McAleenan noted that CBP has seen a nearly 50 percent increase in express consignment and international mail shipments over the past five years and that more automated solutions should improve cargo processing and the use of enforcement resources.

According to an American Shipper article, a CBP official said the agency “is formulating a proposal for Congress to grant it additional authority for managing risks associated with e-commerce.” The article said the proposal “includes considerations for ensuring CBP shares sufficient information with rights holders and works appropriately with parties to the transaction,” which are often different from those CBP has traditionally dealt with.

Earlier this year CBP issued an e-commerce strategy that covers issues such as legal and regulatory reform, operational changes and enhancements, private sector compliance through enforcement and incentives, and international trade standards for e-commerce.  

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