E-retailers and posts face new EU import checks

Regulatory changes could delay cross-border e-commerce flows into the EU next year if e-retailers and postal operators do not prepare in time, a cross-border commerce expert is warning.

UK-based e-retailers must prepare for EU border checks on their goods from next January while postal operators importing to the 27-country bloc will have to comply with regulatory changes from next March, Martyn Noble, CEO of Hurricane Commerce, said.

Detailed product data required

He explained that cross-border eCommerce retailers in the UK will have full border checks on any goods entering the EU from January 1 next year. Michel Barnier, the EU’s Chief Brexit negotiator, has told a House of Lords Committee that Brussels will not agree to any delay despite the UK pledging not to introduce full border checks on EU goods until July 2021.

This means that, with just six months to go, the pressures will now ramp up on UK-based and EU e-retailers to ensure they have the right systems in place to combat the potential fallout from the UK leaving the EU without a deal.

According to Noble, one of the biggest requirements will be to ensure that goods being sent into the EU and to the UK have the right data sets including accurate HS6 codes and product descriptions. Without them, the fear is that importing ports will not have the capacity to process information with the likelihood of lengthy delays in goods clearing customs.

eCommerce brands also face greater scrutiny to ensure that goods are not being sent to denied parties - individuals or organisations on banned lists - or are shipping goods that are prohibited or restricted in certain countries.

E-retailers will also need to ensure they have the best possible landed cost engine to ensure they are providing their customers with the right duty and tax calculations. A growing number of leading eCommerce brands are providing their customers with a Delivered Duty Paid (DDP) service, in which they take responsibility for paying duties and taxes that are due, increasing cost transparency and customer satisfaction.

“Brexit is just one major part of a changing geopolitical landscape that is requiring anyone involved in cross-border eCommerce to provide accurate data and become more compliant,” Noble said. “Other factors include the US-China trade war, changes in VAT regulations and advanced electronic data capture.

“It is creating cross-border trade uncertainty and complexity, after decades of perceived stability resulting in far-reaching changes to the legislative and regulatory environment and the associated compliant shipping procedures.

He emphasised: “Compliance is never optional. It is like a tax; any brand wanting to compete in the fast-paced world of eCommerce is required to fulfil their obligations and demonstrate they are equipped to operate in accordance with the law and the regulations.”

Postal operators must prepare for ICS2 compliance

Meanwhile, strict new EU regulations on imports from next March mean that postal operators could lose business to their competitors if they do not prepare in time, the Hurricane Commerce CEO pointed out.

Posts are currently exempt from having to submit an entry summary declaration via the Import Control System (ICS) before importing goods into the European Union’s customs territory. But the implementation of Import Control System 2 (ICS2) from March 15, 2021, will compel Posts to provide a minimum data set (PLACI or ENS) including an accurate product description and, as of 2023, a valid HS6 code.

It will also be the responsibility of the importing Post to submit the correct entry summary declaration. An efficient solution will need to be in place, especially when the exporting Post does not provide the minimum data set.

Noble explained: “Submitting incomplete or incorrect data will cause shipments to be held by customs until the appropriate data has been submitted. This will impact hugely on transit times and customer experience.

“The effect of this will be that eCommerce retailers will move to other postal providers which have the right systems and processes in place to meet the requirements of ICS2. Efficiency and customer experience are key to any Post looking to secure their position and increase revenues. Not being prepared for ICS2 is simply not an option.”

Hurricane has developed a multi-lingual data enhancement solution called Zephyr to enable Posts to complete and submit their entry summary declaration to ICS2. Zephyr validates product descriptions, returning a status code if invalid. It also provides a valid 10-digit import code as well as the most likely HS6 code and product description.

Noble added: “Zephyr has been proven to handle high volume data in lightning quick time with return times of 100 milliseconds. It not only gives postal operators peace of mind that all entry summary declarations via ICS2 are automated and compliant, but that they will be able making savings and improve their transit times by making use of fast track customs lanes.”

Hurricane Commerce’s solutions cover data enhancement, duty and tax calculations, prohibited and restricted goods screening and denied party screening. Its customer base includes postal services and authorities, eCommerce retailers and platforms, parcel carriers, logistics specialists and other software providers.