EU Ministers Agree to Remove Customs Exemption on Low-Value Parcels

The European Union's finance and economy ministers have agreed to abolish the existing customs exemption for parcels valued under 150 euros imported from non-EU countries. This decision, finalized during a meeting in Brussels, is intended to address the surge in small parcel shipments, particularly from China, and to promote fairer competition for businesses within the EU.

According to the Austrian Retail Association, the importation of low-value goods from outside the European Union has resulted in significant financial losses, with estimates for Austria alone reaching up to 4.5 billion euros. The influx of parcels has also raised concerns regarding product safety, environmental impact, and the overall competitiveness of European enterprises.

Data from the European Commission indicates that as of 2024, approximately 91 percent of e-commerce imports valued at up to 150 euros originated from China. The volume of these shipments has increased dramatically, doubling from 1.9 billion in 2023 to 4.17 billion parcels in 2024. In total, around 4.6 billion parcels were imported into the EU last year, marking a fourfold increase since 2022.

The ministers' decision is supported by all EU member states and is viewed as a critical measure to counteract unfair competition. The practice of dividing consignments to remain below the exemption threshold has allowed many non-EU businesses to avoid paying customs duties, placing EU companies at a disadvantage. Additionally, the high volume of returns, often provided at no additional cost, has led to increased transport and packaging requirements, which have drawn criticism from environmental groups.

Representatives of Austrian commerce, including the Chamber of Commerce and the Retail Association, have advocated for the removal of the customs exemption, citing its negative impact on local businesses and market conditions. The change aligns with a broader EU customs reform initiative, which is expected to be finalized by the end of the year. One key component of the reform involves the establishment of a centralized EU customs authority and a data platform designed to enhance oversight of goods entering the EU. This platform is anticipated to be operational by mid-2028, at which point the elimination of the customs exemption is expected to take full effect.

EU officials have emphasized that ending the exemption will help create a level playing field for all market participants and ensure compliance with European standards. The move is also intended to mitigate environmental impacts by discouraging excessive long-distance shipping and supporting efforts to reduce carbon emissions.

The upcoming policy change is projected to take effect as soon as feasible, with temporary solutions under consideration to expedite its implementation. The European Commission and the EU Council are collaborating on measures to ensure an effective and smooth transition.

Ultimately, the abolition of the customs exemption for low-value parcels marks a significant shift in EU trade policy. It aims to protect domestic enterprises, reinforce regulatory compliance, and address environmental concerns associated with the growing volume of international e-commerce shipments.