Modernizing customs

WCO adopts resolution on cross-border e-commerce

The World Customs Organization (WCO) has established a working group on e-commerce to discuss opportunities and challenges, and develop collaborative solutions for the future.

The Policy Commission of the WCO unanimously adopted the Luxor Resolution at its meeting of December 4–6, 2017, in Luxor, Egypt. This resolution seeks to help customs and 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. 

It was developed in close collaboration with all stakeholders and outlines the guiding principles for cross-border e-commerce, addressing eight critical aspects: Advance Electronic Data and Risk Management; Facilitation and Simplification; Safety and Security; Revenue Collection; Measurement and Analysis; Partnerships; Public Awareness, Outreach, and Capacity-Building; and Legislative Frameworks.

>> View the original WCO press release of December 7, 2017 

The growing trade in electronic commerce has generated enormous opportunities for the global economy. This unprecedented growth has revolutionized how businesses and consumers market, sell, and purchase goods, providing more choices and advanced shipping, payment, and delivery options. 

It has also opened up global economic opportunities to micro-businesses and small and medium-sized enterprises for wider access to overseas markets by lowering entry barriers and promoting inclusive, robust global trade. But e-commerce, especially B2B and C2C transactions, also poses several challenges to governments and businesses alike. 

This fast-evolving trading environment requires a comprehensive and well-considered response from all stakeholders, including customs authorities, to address increasing concerns about the unprecedented growth in volume, lack of global standards and guidelines, and increasing border risks. 

To this end, the World Customs Organization (WCO) has established a working group on e-commerce comprising representatives from governments, the private sector, international organizations, e-commerce operators/intermediaries, and academia to discuss opportunities and challenges presented by e-commerce and develop collaborative solutions for addressing current and emerging challenges more effectively and efficiently. 

Working closely with the private sector and stakeholders over the last 15 months, the WCO has rigorously explored the key drivers of e-commerce, examined existing business models, and considered current and likely future trends based on extensive research and consultation. 

It has been developing standards, guidelines, and recommendations to facilitate cross-border e-commerce in a way that meets the needs of industry, consumers, and regulatory agencies alike. 

Eight critical aspects – eight principles

  1. Principle I – Advance Electronic Data and Risk Management: Frameworks are established that support the timely and accurate exchange of advance electronic data between customs and e-commerce operators for effective risk management and customs control.
  2. Principle II – Facilitation and Simplification: Simplified clearance procedures are adopted where appropriate for dealing with increasing volumes of low-value and small shipments/parcels.
  3. Principle III – Safety and Security: Government and industry work collaboratively to use technology, intelligence, non-intrusive intervention methodology, and risk profiling based on advance electronic data (pre-loading/pre-arrival) to identify and intercept high-risk shipments.
  4. Principle IV – Revenue Collection: Relevant and reliable advance electronic data from e-commerce operators and alternative models of revenue collection are adopted to facilitate accurate and efficient revenue collection with minimum intervention (streamlined and automated) while appropriate customs controls are applied to identify and prevent fraud.
  5. Principle V – Measurement and Analysis: Reliable mechanisms are established to accurately measure and analyze cross-border e-commerce in close cooperation with international organizations and private-sector stakeholders to facilitate trade statistical analysis that informs policy, supports risk management, and contributes to the rapid clearance of legitimate trade.
  6. Principle VI – Partnerships: All stakeholders work in partnership to develop business solutions that meet individual and collective needs of all actors in the supply chain.
  7. Principle VII – Public Awareness, Outreach, and Capacity-Building: Awareness and outreach programs, together with appropriate capacity-building mechanisms, are in place to ensure that all stakeholders understand their obligations regarding compliance with customs and other regulatory requirements.
  8. Principle VIII – Legislative Frameworks: National legislation that complements related international instruments, conventions, agreements, and WCO tools and guidelines are adjusted/adapted where appropriate to facilitate cross-border e-commerce, collect revenue payable, and protect society while ensuring a more level playing field for all economic operators to the extent possible.

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