EU enforcement deficit at Temu, Shein and Co: trade association calls for abolition of the 150 euro duty-free limit by 2026 at the latest!
– 2024-02-21 18:03:21
Dubious online platforms from the Far East endanger the European trading landscape. Trade for fair eCommerce instead of junk commerce at the expense of the environment and the welfare state!
Vienna (OTS) – Trade is one of the most strictly regulated industries in Europe, but billion-dollar eCommerce platforms from the Far East can still operate as freely as birds in the EU. With dubious quality, customs evasion and an aggressive pricing policy, online shops like Shein and Temu are gaining market share in this country every day, while domestic online retailers are being slowed down by an unprecedented avalanche of bureaucracy and regulatory burden.
Brussels: time to wake up!
“We stand for fair commerce instead of junk commerce. As the most important measure, the trade association is calling for the abolition of the EU duty-free limit of 150 euros by 2026 at the latest. Unfortunately, the EU Commission is sleeping on the pendulum clock here and has not planned the end of the duty-free limit until 2028 “No European trading company can wait that long. It’s high time to wake up.”appeals trade association managing director Rainer Will to the political decision-makers in Brussels. This is also one of the core demands of the AGM future paper AUSTRIA ACTS, which was published at the end of January.
The background? Not a single European online shop grew anywhere near as fast as the Chinese shopping app Temu in 2023. Last year, global sales were reportedly $16 billion. The Chinese ultra-fast fashion retailer Shein even generated over $25 billion. This rapid growth is often made possible by questionable methods and toothless regulations in Europe.
Unfair competition is a massive problem for many retail sectors
“Platforms like Temu collect a commission from the manufacturers, deliveries are made to Hungary and customs are also cleared. This is a nice business model for the target countries. There are fees for the landing aircraft, customs clearance, income from the warehouses and the entire logistics chain. Through the Free movement of goods, only the entry gate into the EU is controlled, then nothing more. The EU import regulations in Hungary can be interpreted more or less strictly, waving through without strict controls is possible. For us, this is a massive problem.”says Otto/Unito managing director and trade association vice president Harald Gutschi. “I’m not opposed to competition, more of it always helps. However, there needs to be fair rules of the game that everyone has to adhere to. If we are only allowed to import goods according to European standards and have to pay customs duties, this must also apply to Far East traders. Otherwise it’s not fair.”
It’s not just online retail that is suffering from this development, many other retail industries are also feeling the effects of the new, unfair competition – according to the offers that can be found on Temu, Shein & Co. This ranges from clothing to toys or electrical appliances to decorative supplies or perfume and cosmetics.
2 billion “duty-free” packages per year
The EU itself expects around 2 billion parcels to be delivered to Europe from China under the title “duty-free” in 2023, and the trend will continue to rise sharply. Around two thirds of these parcels declared as duty-free could be misidentified in order to avoid customs duties and save on import sales tax. And not only that: “We are aware of cases in which, even when returning goods, European customers are asked to deliberately misstate the value of the return in order to avoid customs duties. This is essentially a written guide to customs fraud.”explained Rainer Will.
This makes it clear: With the current resources, only a small part can be controlled, and only superficially. Resources must therefore be increased quickly, but above all cross-border cooperation between customs and tax authorities must be urgently improved. The IT systems also lag behind the reality of the new business models. By the way, Austrian customs also confiscated fake products worth 6.7 million euros in 2022. The HV therefore urgently calls for more customs officials, the prevention of customs evasion through online shops and strict action against product piracy.
But the points of criticism go much further: “There are now countless cases documented in which counterfeit, non-European and health-endangering products are placed on the market, as well as data protection concerns. According to a recent survey, 95% of toys purchased on Temu pose a safety risk for children. We therefore advise everyone “It clearly discourages Austrian consumers from ordering from providers of this type.”said trade spokesman Rainer Will finally.
