Cross-Border e-Commerce

E-commerce has become a game changer in the international trade arena. One may argue that it is just another form of trade, but we need to keep pace with the changes it brings to the trade environment, and provide innovative solutions to deal with them. Efficiency of clearance and delivery of low value and small parcels is especially crucial. To manage e-commerce transactions, Customs administrations need to engage with all relevant stakeholders with a view to collectively defining the appropriate approach to adopt both from a trade facilitation and enforcement perspective.

Essential elements to consider in the definition of e-Commerce

  • online initiation;
  • Cross-border transaction/shipment;
  • Physical goods; and
  • Destined to a consumer (B2C and C2C).

Key characteristics of e-commerce cross border transactions

  • Time-sensitive goods flow
  • High volumes of small packages
  • Participation of unknown players
  • Return/refund processes required

Challenges faced by Customs administrations

Trade facilitation and security

  • Ensuring speed and efficiency in the clearance process for an increasing volume of transactions
  • Managing change from a few large/bulk shipments into a large number of low-value and small shipments
  • Managing risks posed by limited knowledge on importers and the e-commerce supply chain (new class of sellers and buyers/occasional shippers and buyers)
  • Ensuring data quality (accuracy and adequacy of the data received)
  • Defining the role and responsibility (liability) of e-commerce operators to assist governments (e-vendors/intermediaries)

Fair and efficient collection of duties and taxes

  • Identifying abuse or misuse of ‘de minimus’ for illicit trade purposes (splitting of consignments/undervaluation)
  • Ensuring compliance with classification and origin rules
  • Integration of e-commerce vs traditional trade

Protection of society - criminal exploitation of e-commerce

  • Setting up a specialized unit to trawl the Web for information which might be of use in preventing, detecting, investigating and prosecuting a Customs-related offence (drug trafficking/counterfeited and pirated goods/illicit financial flows/money laundering)
  • Enhancing international cooperation and ensuring that agreements on mutual legal assistance are in place to allow for investigations or prosecutions when websites are hosted outside a national territory
  • Making the most of existing technologies, especially those related to data analysis

Work done so far by the WCO

The  E-Commerce Package

The package include the Framework on Cross-Border E-Commerce adopted in June 2018 which sets out 15 global standards on cross-border e-commerce with a view to providing pragmatic, fair and innovative solutions, whilst taking into account the diverse expectations and concerns of Customs administrations and stakeholders. It is accompanied by supporting documents to ensure its effective implementation.

Resolution on the guiding principles for cross-border e-commerce

The Resolution, developed in close collaboration with all stakeholders, outlines the guiding principles for cross-border E-Commerce addressing eight critical aspects, notably 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. The Resolution is 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 the current and emerging challenges.

Communiqué to the Eleventh WTO Ministerial Conference

The Communiqué strongly reaffirms the WCO’s leadership in providing policy and operational frameworks for the effective management of cross-border E-Commerce from both a facilitation and a control perspective, and clearly demonstrates its strong commitment to supporting the WTO’s Work Programme on E-Commerce, moving forward.

Study Report on E-Commerce

The WCO has carried out a short survey to collect Members’ current practices and ongoing and/or future initiatives on cross-border low value e-commerce. Based on the survey findings, a Study Report has been developed. The Report is divided into the following sections: facilitation, risk management, data exchange/cooperation with e-commerce operators, control and enforcement, and revenue collection.

Detailed analysis of alternate models of revenue collection

The WCO supported the Organisation for Economic Co-operation and Development (OECD) in exploring alternate models of revenue collection (duties and taxes) on low value shipments. Results of the analysis undertaken by both Organizations were published last year as part of the OECD report titled “Addressing the Tax Challenges of the Digital Economy.

Joint WCO-UPU messaging standards for advance electronic information

The WCO and the Universal Postal Union (UPU) have collaborated to jointly develop electronic messages, to permit the pre-advice and possible pre-clearance of postal items (the messages are part of the WCO Data Model Declaration Derived Information Package). Moreover, the UPU’s Postal Technology Centre has developed an electronic Customs Declaration System (CDS) on the basis of the Joint WCO/UPU Customs-Post EDI message.

Pre-loading advance cargo information (PLACI) for air and postal shipments

The standards on PLACI for air and postal shipments which aims at strengthening air cargo security were developed and included in the WCO SAFE Framework of Standards 2015 edition. The use of PLACI in the civil aviation environment is being addressed within the WCO-ICAO [International Civil Aviation Organization] Joint Working Group on Advance Cargo Information (JWGACI) which was set up in 2014 to discuss and recommend modalities for sharing and using advance cargo information (ACI) in carrying out security risk analysis by Customs and civil aviation authorities in order to mutually support each other and strengthen air cargo security. The JWGACI is following a two-phased approach. Phase I, which consisted of the elaboration of a report on the PLACI concept, its benefits and the cost of its implementation, has been completed. The JWGACI has now moved to Phase II of its work, i.e. dealing with issues concerning practical and technical implementation. An interim report has already been finalized.

Revised CN22/23 with additional data elements

Forms CN 22 – (packages under 2 kg in weight or valued at less than 300 special drawing rights (SDR)), CN 23 (packages valued in excess of 300 SDR), CP 71 (dispatch note) and CP 72 (manifold set) have been amended in 2016. The changes include additional columns on the CN 22 for the Harmonized System (HS) code and country of origin, "sale of goods" and "returned goods" as reasons for export, the telephone number of the sender and addressee, and an optional S10 barcode, in addition to substantially harmonizing and aligning these documents. The amendments are expected to assist Customs in carrying out better risk profiling and more efficient collection of duties and taxes where applicable, as well as supporting postal administrations in enhancing service delivery.

Risk indicators for express and postal shipments

The Postal/Express Consignments Risk Indicators and Manual have been incorporated into Volume 2 of the WCO Customs Risk Management Compendium (access to this document is restricted). The indicators listed in the document could be used to select possible high risk movements/consignments involving all types of Customs fraud (revenue protection, narcotics, security, IPR, etc.).

Work with other stakeholders

Organisation for Economic Development and Co-operation (OECD)

 Universal Postal Union (UPU)

  • Joint messaging standards for the advance electronic information between Post and Customs
  • Joint WCO/UPU letter to Customs and Postal operators for the implementation of electronic interface
  • Joint WCO/UPU survey on the preparedness of Posts and Customs to capture, exchange and use of the advance electronic information


United Nations Conference on Trade and Development (UNCTAD)

  • Measuring cross-border e-commerce


World Trade Organization (WTO)

  • Work programme on e-commerce


World Economic Forum (WEF)

  • WEF dialogue on e-commerce facilitation