WCO Adopts Principles to Address E-Commerce Challenges
The World Customs Organization’s Policy Commission recently adopted a resolution aimed at helping customs and other government agencies, businesses, and other stakeholders in the cross-border e-commerce supply chain to understand, coordinate, and better respond to current and emerging challenges. The Policy Commission also issued a communiqué on e-commerce to the World Trade Organization’s ongoing ministerial conference, where this topic could be one of a few on which WTO members are able to reach agreement.
According to the resolution, cross-border e-commerce is characterized by online initiation, cross-border transaction/shipment, physical goods, and destined to consumers (commercial and non-commercial). E-commerce has revolutionized the way businesses and consumers are selling and buying goods, the resolution states, providing wider consumer choices and broader access to customers by micro, small, and medium-sized enterprises. E-commerce thus offers a significant opportunity for the economic growth and competitiveness of nations by providing new growth engines, developing new trade modes, driving new consumption trends, and creating new jobs.
On the other hand, the resolution acknowledges that the exponential growth of e-commerce, particularly the emergence of new trade patterns and the increased role of consumers in individual transactions, presents challenges to governments and businesses in terms of trade facilitation, safety and security, and accurate and efficient collection of duties and taxes. There is thus a need to adequately measure e-commerce flows and the importance of customs agencies’ role therein for well-informed policy decision making, risk assessment, trade and revenue statistics analysis, performance measurement, and information exchange.
In an effort to develop a harmonized approach to e-commerce and deliver common standards, guidelines, and tools for customs clearance and data harmonization, the WCO resolution adopts the following principles and encourages customs administrations to apply them.
- advance electronic data and risk management (e.g., establishing mechanisms to exchange advance electronic information between post and customs agencies for the purpose of targeting and facilitation, and using data generated by e-commerce when developing and implementing automated risk management tools)
- facilitation and simplification (e.g., adopting or enhancing customs procedures that provide for expedited release of shipments, and coordinating release among all relevant border agencies through a single window environment)
- safety and security (e.g., developing and applying risk profiles that identify high-risk shipments in e-commerce channels)
- revenue collection (e.g., applying alternative models of revenue collection, and reviewing or adjusting de minimis thresholds)
- measurement and analysis (e.g., establishing mechanisms to capture data at item level to facilitate the development of e-commerce trade statistics while implementing simplified clearance processes)
- partnerships (e.g., trusted trader programs)
- public awareness, outreach, and capacity building (e.g., publishing all appropriate regulatory, policy, and procedural information openly, and raising awareness of potential threats to safety and security in the e-commerce supply chain)
- legislative frameworks