Purchases from Chinese online marketplaces and the mailing of these goods to Europe should be restricted, as customs authorities cannot keep up with the explosion in parcel volumes, said Sami Rakshit, director general of Finnish Customs, in an interview with Finnish public broadcaster Yle on Monday. Estonia's Tax and Customs Board (MTA) agrees.

Last year, 4.6 billion parcels arrived in the European Economic Area, 98 percent of which originated from China. Small shipments from Asia pose a challenge for customs authorities across the European Union, said Ursula Riimaa, deputy director general for customs at the MTA.

"Yes, small parcels coming from Asia to Europe are a problem not just for Estonia but for all EU customs authorities. We've seen a massive surge in e-commerce since 2021. In Estonia's case, flights carrying goods from Chinese e-commerce platforms began arriving this summer. For comparison, the volume of goods on a single flight today equals what we used to receive in an entire month. Volumes have grown significantly — up to tenfold," Riimaa said.

This increase has placed a heavy burden on customs operations, as every shipment must go through a preliminary risk analysis, including a review of advance data and identification of the buyer.

"Of course, it's not always that straightforward. We're also seeing issues with the quality of the data provided. Still, we continue to operate based on existing risk criteria. We conduct random inspections as well as participate in international control operations," the deputy director said.

"In terms of scope, we have to acknowledge that neither Estonian customs nor those of other member states can check every single parcel. But we're doing our best, because our goal is to prevent dangerous or prohibited goods — especially weapons and narcotics — from entering Estonia," she added.

The spike in parcel volumes is partly driven by new U.S. customs regulations, but also by shifting consumer habits.

Riimaa noted that the convenience of customs processes also plays a role: "It's not accurate to link the surge in e-commerce volumes solely to U.S. policy decisions. We need to consider broader impacts. Clearly, consumers' shopping habits have changed. More people are ordering goods from China. Another factor is the availability of very efficient logistics routes. And if certain member states are able to offer simple and convenient customs procedures, that too can influence why new business flows come through specific countries."

Whether taxes are paid on these goods often depends on the good faith or legal compliance of the Chinese seller.

"In reality, paying taxes is a responsibility of every citizen. We're seeing a lot of incorrect declarations. Sometimes a parcel contains multiple items, but only one is declared. Also, product values are often misrepresented. But buyers can't always be blamed. Many notice that the price they paid online differs from the one shown at the point of taxation or declaration. That's often due to attempts to deceive both the government and the buyer," Riimaa said.

"The European Union has already taken initial steps — back in 2021, it introduced a special VAT scheme known as IOSS, or Import One Stop Shop. Under this system, VAT is collected at the point of purchase and the seller remits the tax monthly to the consumer's home country. When we compare 2023 to 2024, we can see that thanks to this scheme, we're collecting twice as much VAT. So this system is clearly having an impact," the MTA representative added.

Asked whether online trade is even possible to regulate or whether it's simply moving too freely right now, Riimaa responded: "Yes, e-commerce volumes are indeed unpredictable. We've seen that very clearly this year. In April, we were still managing the flow, but now Estonia has been discovered as a transit point. It's not just parcels destined for Estonia that are coming through us, but also a significant share of goods moving onward. We're in a constantly shifting environment and need to adapt by implementing smarter checks based on our available resources."

She also pointed to an EU-wide customs reform currently underway: "At the national level, it's very difficult to respond effectively to the e-commerce boom. The EU is taking its first steps — last year, the European Commission proposed a customs reform plan. A key part of this is addressing how to cope with the explosive growth in e-commerce volumes. Some of the ideas currently under discussion include removing the €50 exemption threshold and introducing a processing fee to help customs agencies expand their control capacity. There's also a push to increase responsibility for online platforms. They should assess what products are entering the EU and be required to declare goods and pay taxes."

In closing, the deputy director general of the MTA reminded that customs has other duties as well: "I'd like to highlight that while e-commerce is a major issue for us, customs authorities are also responsible for enforcing sanctions on imports and exports — something that takes up a considerable portion of our resources. Last year, we carried out over 500,000 sanction checks. The customs world is full of challenges. On one hand, there's the surge in e-commerce. On the other, there are sanctions. We're doing our best to manage it all."

--

Follow ERR News on Facebook and X and never miss an update!