The rapid growth of global cross-border e-commerce has presented unprecedented challenges for customs authorities worldwide. Balancing trade facilitation with security measures has emerged as a critical issue requiring immediate attention. In this context, the World Customs Organization (WCO) established its E-Commerce Working Group (WGEC) to develop unified global standards for safe, efficient, and sustainable cross-border e-commerce development.
From February 12-14, 2020, the WGEC convened its final face-to-face meeting at WCO headquarters in Brussels, marking the culmination of its current phase of work. The meeting brought together nearly 120 representatives from member customs administrations, international organizations, postal and express delivery services, e-commerce platforms, logistics providers, customs brokers, and technology service providers to finalize crucial work in the e-commerce sector.
I. Meeting Context: The Urgent Need for E-Commerce Standards
In his opening remarks, Pranab Kumar Das, Director of WCO's Compliance and Facilitation Directorate, reviewed progress in the e-commerce field. As early as June 2018, the WCO Council had approved the Cross-Border E-Commerce Framework of Standards (E-Commerce FoS). In June 2019, the Council adopted the WCO E-Commerce Package, with the exception of three annexes to the Technical Specifications for the E-Commerce Framework of Standards. The finalization of these annexes proved essential for completing the comprehensive e-commerce standards system.
The Framework of Standards contains 15 global baseline standards focusing on advance electronic data exchange to enable effective risk management while facilitating growing volumes of low-value cross-border B2C and C2C shipments. The framework aims to enhance e-commerce efficiency by streamlining clearance procedures, tax collection, and returns processes through close collaboration with e-commerce stakeholders. It also encourages using concepts like Authorized Economic Operators (AEO), non-intrusive inspection equipment, data analytics, and other cutting-edge technologies to support secure, reliable, and sustainable cross-border e-commerce.
The E-Commerce Package includes technical specifications, definitions, business models, process flows, implementation strategies, action plans, capacity-building mechanisms, and two case study templates to enrich the Framework of Standards for effective implementation. This package provides member administrations and relevant stakeholders with necessary guidance for implementing the framework's standards.
Director Das informed participants that the Council had extended WGEC's mandate for a second year in June 2019, requiring the working group to complete its tasks virtually by June 2020. He explained that during its October 2019 session, the Permanent Technical Committee (PTC) discussed challenges of conducting work entirely virtually and requested the Secretariat to explore possibilities for face-to-face meetings. The Policy Commission subsequently approved holding one final in-person meeting by March 2020.
II. Key Outcomes: Finalization of Three Critical Annexes
The WGEC meeting's primary objective was completing three outstanding annexes to the Technical Specifications for the E-Commerce Framework of Standards:
- E-Commerce Reference Data Set
- Revenue Collection Approaches
- E-Commerce Stakeholders: Roles and Responsibilities
Under the leadership of Mike Leahy from the Canada Border Services Agency and Norm Schenk from the Private Sector Consultative Group, WGEC approved revised texts for all three annexes. The Revenue Collection Approaches document incorporated member-submitted case studies on different tax collection methods, while the Cross-Border E-Commerce Reference Data Set included references to various datasets developed or piloted by members for effectively tracking, targeting, and identifying small consignments and e-commerce parcels.
1. E-Commerce Reference Data Set
This annex provides customs administrations with a standardized data checklist for identifying and assessing risks in cross-border e-commerce shipments. The dataset includes key elements such as goods description, value, weight, origin, destination, and buyer/seller information. Unified data standards enable more effective risk assessment while reducing unnecessary inspections and accelerating cargo clearance.
2. Revenue Collection Approaches
The annex examines different tax collection models for cross-border e-commerce, including simplified VAT registration, collection delegation, and technology-enabled tax tracking. It encourages customs administrations to adopt appropriate revenue collection methods based on national circumstances, ensuring tax compliance without creating unnecessary trade barriers.
3. E-Commerce Stakeholders: Roles and Responsibilities
This annex clarifies roles and responsibilities for all participants in the e-commerce ecosystem, including customs authorities, e-commerce platforms, logistics providers, payment processors, and consumers. Clear delineation of responsibilities facilitates cooperation among stakeholders and improves overall e-commerce efficiency and security.
III. Case Studies and Data Sharing: Promoting Best Practices
The WGEC welcomed presentations from Brazilian and Korean customs administrations about their e-commerce case studies, which will be included in the WCO E-Commerce Case Study Compendium. Participants were encouraged to submit additional case studies and information about e-commerce datasets.
The Brazilian and Korean case studies provide valuable references for other members, covering diverse topics such as big data analytics for risk assessment, electronic certificates of origin, and cross-border e-commerce return mechanisms. Such knowledge sharing enables customs administrations to learn from each other's experiences.
The WGEC also encouraged members to share their e-commerce datasets, which help customs administrations better understand trade patterns and risk profiles in cross-border e-commerce. Data sharing enhances collective capabilities to combat smuggling, counterfeiting, and fraud.
IV. Framework Maintenance and Capacity Building
The WGEC reviewed and refined a draft PTC decision on the Framework of Standards' update/maintenance mechanism, approving its submission to the April 2020 PTC session. Discussions addressed member implementation of the Framework and related capacity-building support, including review of draft indicators for Framework implementation. The ultimate goal remains rapid and coordinated implementation through close cooperation with relevant government agencies and stakeholders.
To ensure the Framework's continued relevance, WCO established a maintenance mechanism allowing members to propose periodic updates reflecting e-commerce developments. This adaptive approach maintains the Framework's practical utility.
Capacity building remains crucial for successful Framework implementation. WCO provides members with training courses, workshops, and technical assistance to enhance understanding of Framework content and improve e-commerce regulatory capabilities.
V. Future Directions: Advancing Global E-Commerce Standards
Outcomes from the WGEC meeting and the draft E-Commerce Case Study Compendium will be submitted for approval to the April 2020 PTC session and subsequent June 2020 Policy Commission and Council sessions.
As WGEC's mandate concludes in June 2020, future work on cross-border e-commerce will transition to the PTC and Enforcement Committee according to their respective mandates. Key priorities include:
- Enhancing the Framework of Standards to address emerging e-commerce trends and technological challenges
- Strengthening capacity-building initiatives to support member implementation
- Promoting international cooperation among stakeholders
- Incorporating emerging technologies like blockchain and artificial intelligence
Cross-border e-commerce has become integral to global trade. Through developing and implementing unified global standards, the international community can promote e-commerce that is simultaneously efficient, secure, and sustainable, contributing significantly to global economic growth. The WCO's Framework of Standards will continue guiding this evolution.