When e-commerce involves cross-border transactions, a considerable number of opportunities can be leveraged. In fact, there are significant economic opportunities for consumers and businesses alike in the e-commerce arena. Unfortunately, there are also some important challenges with e-commerce, particularly from an international trade perspective. Regarding trade in physical goods, the world is witnessing an exponential growth in the number of small packages crossing borders. The exponential growth comes from a change in how purchases are being made by consumers and how they are being fulfilled by sellers. This has brought about a tsunami of small packages to the doorsteps of customs administrations, and other regulatory agencies, around the world, in the postal and express courier environment.
In many countries, there are de minimis thresholds that allow low-value packages to enter a country with little or no duties or taxes levied, and with much more simplified procedures. This has led to unscrupulous manipulation by either the shipper or the consumer to avoid the extra charges by splitting invoices, undervaluing invoices, or misdeclaring the items altogether. These distortions to normal trade practices impact many countries’ revenue collection volumes, and the data capture is not always linked to the capture of trade statistics. Additionally, criminals use the vulnerabilities created by the oversaturated systems to introduce every variety of illicit goods.
E-commerce is a powerful economic driver that can facilitate market access, support small businesses, and make economies more competitive. Therefore, it is essential that governments and the private sector work together to come up with smart and practical solutions to enable fast and easy cross-border movement of these small, low-value legitimate shipments — while developing automated ways to target risky shipments to intercept any illicit goods trying to sneak in — and so that accurate statistics are captured for these growing volumes.