2. E-Commerce

2.6. Custom-related challenges

Cross‑border e‑commerce presents challenges for traders and service providers, including navigating diverse international regulations, managing increasingly complex shipping logistics, and adapting to rapidly evolving markets.  Additional hurdles include regulatory complexity, cybersecurity risks, language barriers, multi‑currency payments, and data protection.

From a regulatory perspective, the surge in low‑value shipments requires customs administrations to maintain efficient clearance processes while ensuring security and accurate revenue collection. High‑quality electronic data is essential.

To effectively manage e‑commerce transactions, customs and border administrations must engage with all relevant stakeholders to collectively define appropriate approaches that balance trade facilitation with enforcement. Collaboration across the ecosystem is critical.

The growing volume of shipments affects Customs, other government agencies, and private‑sector actors, all of whom must balance rapid clearance with safety, security, revenue collection, and accurate trade statistics. Traditional risks such as illicit trade, IPR infringements, counterfeiting, and commercial fraud remain significant. These issues must be addressed not only by Customs but also by service providers such as DHL, who have a vested interest in ensuring that transactions moving through their networks are legitimate. Below are examples of key regulatory challenges:

1.     Increased volume & complexity

Traditional systems were never designed for hundreds of thousands of low-value packages arriving every day. To cope at that scale, authorities and logistics providers are working to:

  •        Automate processing
  •        Use electronic pre-arrival data
  •        Balance speed with effective enforcement

 

2.     Data quality and management

 

Accurate, complete data drives effective risk assessment, revenue collection, and compliance monitoring. Administrations increasingly lean on advanced analytics, machine learning, and data validation to support automated processing and risk-based decisions, making full use of existing and emerging technologies.

 

3.     Risk management

 

Identifying and mitigating risks related to revenue, illicit trade, IPR infringement, and safety/security is harder in e-commerce because Customs often knows little about importers, sellers, and the wider supply chain. The rise of occasional shippers, micro-sellers, and new classes of online traders adds to the challenge.

Seller-provided data (product descriptions, values, HS codes) is frequently incomplete, vague, or incorrect, which directly undermines:

  •        Risk profiling
  •        Targeting of suspicious shipments
  •        Identifying dangerous or illicit items
  • Because the model is shifting toward data-driven, pre-arrival risk assessment, the quality of this information matters more than ever.

 

4.     Revenue collection

 

Many low-value imports fall below de minimis thresholds, which makes calculating and collecting duties and taxes genuinely complex. Four tactics account for most revenue leakage:

  •        Undervaluation (e.g., declaring a $500 phone as $20)
  •        Misdescription (e.g., declaring electronics as “toys”)
  •        Fragmented shipments designed to avoid thresholds
  •        Fraudulent or incomplete declarations

Effective measures are required to ensure that customs duties, GST/VAT, and other taxes are collected accurately, preventing revenue leakage and ensuring fair competition for domestic businesses.

Further reading

The WCO has compiled an extensive set of real-world examples in its Compendium of Case Studies on E-Commerce, a key reference for understanding how administrations worldwide are responding.