EU Finance Ministers Remove Customs Exemption for Small Parcels
The finance ministers of the European Union have agreed to end the customs exemption for goods worth up to 150 euros imported from non-EU countries. This decision was finalized during a meeting in Brussels and is intended to address the significant increase in low-value parcels entering the EU, particularly from China.
The measure aims to curb a surge in small package imports that, according to the Austrian Retail Association, have resulted in substantial economic losses for local businesses, estimated at up to 4.5 billion euros in Austria alone. The new regulations are also designed to enhance product safety standards, support environmental protection initiatives, and promote fair competition within the European market.
Implementation of the new customs rules is expected to occur swiftly. Proposals indicate that the exemption could be lifted as early as the first quarter of 2026. The Council of the EU, in collaboration with the European Commission, is working to establish a straightforward and temporary solution to ensure the rapid execution of the changes.
Recent data from the European Commission highlights the scale of the issue, revealing that in 2024, 91% of all e-commerce imports valued at up to 150 euros originated from China. The volume of these shipments more than doubled between 2023 and 2024, increasing from 1.9 billion to 4.17 billion parcels. In total, approximately 4.6 billion packages were imported into the EU in the previous year, a figure that has quadrupled since 2022.
The unanimous decision by EU member states to abolish the customs exemption is also intended to send a clear message to European retailers. The increase in e-commerce activity has led to concerns about unfair competition for EU-based businesses and raised environmental issues, particularly due to the practice of splitting shipments to avoid customs fees and the prevalence of free returns, which contribute to higher transportation and packaging demands.
Retail associations in Austria and across the EU have advocated for the removal of the customs exemption, arguing that it places domestic businesses at a disadvantage. The Austrian Retail Association and the Austrian Economic Chamber, along with Ecommerce Europe, have lobbied for this change for over a decade.
The removal of the exemption forms part of a broader customs reform initiative that the EU aims to complete by the end of the year. According to proposals from the European Commission, a new EU Customs Authority will oversee a centralized customs data platform. This system is intended to provide customs officials with better oversight of supply chains and production processes for goods entering the EU. The removal of the 150-euro exemption will take effect once the data platform is operational, which is currently projected for mid-2028.
Overall, the reforms are expected to strengthen the integrity of the EU's customs system, ensure fairer trading conditions, and address the environmental and economic impacts of the recent surge in cross-border e-commerce.