European Union: European Commission submitted a proposal for a Council Regulation on introduction of a simplified tariff treatment for the distance sales of goods and elimination of the customs duty relief threshold

On 17 May 2023, the European Commission submitted a proposal for a Council Regulation on the introduction of a simplified tariff treatment for the distance sales of goods and the elimination of the customs duty relief threshold. The proposed regulation would eliminate the current EUR 150 customs duty relief threshold for imported goods. The regulation notes this threshold has been subject to abuse through undervaluation and artificial splitting of consignments, undermining EU financial interests. Additionally, the proposed regulation would introduce an optional simplified tariff treatment for e-commerce imports based on a five-tier "bucket system" with different duty rates, allowing intermediaries to avoid the complex standard method of calculating duties based on classification, value, and origin. Goods currently enjoying 0% duty rates will maintain this status. The simplified system will serve as an alternative to standard procedures, which importers can still choose if they wish to benefit from preferential tariff rates. Certain categories are excluded from this simplified treatment, including goods subject to excise duties, anti-dumping measures, and those in Chapters 73, 98, and 99 of the Combined Nomenclature (iron/steel products, industrial plants, and special circumstance goods). The proposed regulation, if adopted, would apply from 1 March 2028.