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International Postal Service, Remuneration and Regulation Final Report Written by Alex Kalevi Dieke James I. Campbell Jr. Antonia Niederprüm Sonja Thiele Willem van Lienden Colum Joyce 15 October 2020 DG GROW EUROPEAN COMMISSION Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs Directorate GROW E — Services in the Single Market and Digitalisation Unit GROW E.2 — Public Interest Services Contact: Hubert GAMBS E-mail: [email protected] European Commission B-1049 Brussels EUROPEAN COMMISSION International Postal Service, Remuneration and Regulation Final Report Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs 2020 LEGAL NOTICE This document has been prepared for the European Commission however, it reflects the views only of the authors, and the European Commission is not liable for any consequence stemming from the reuse of this publication. More information on the European Union is available on the Internet (http://www.europa.eu). PDF ISBN 978-92-76-27174-1 doi:10.2873/649900 ET-06-20-141-EN-N Print ISBN 978-92-76-27173-4 doi:10.2873/482772 ET-06-20-141-EN-C Printed by WIK-Consult GmbH in Germany Manuscript completed in October 2020 The European Commission is not liable for any consequence stemming from the reuse of this publication. Luxembourg: Publications Office of the European Union, 2020 © European Union, 2020 The reuse policy of European Commission documents is implemented by the Commission Decision 2011/833/EU of 12 December 2011 on the reuse of Commission documents (OJ L 330, 14.12.2011, p. 39). Except otherwise noted, the reuse of this document is authorised under a Creative Commons Attribution 4.0 International (CC-BY 4.0) licence (https://creativecommons.org/licenses/by/4.0/). This means that reuse is allowed provided appropriate credit is given and any changes are indicated. For any use or reproduction of elements that are not owned by the European Union, permission may need to be sought directly from the respective right holders. ABSTRACT Cross-border e-commerce has boosted postal imports of low-value consignments from the Asia- Pacific region to the EEA Member States. The significant growth in imports of low-value consignments particularly from China challenged designated operators and customs authorities in the single market. This study by WIK-Consult explores the development of international postal services in the EEA, assesses the impact of UPU terminal dues and self-declared rates on designated operators, and examines import models for international e-commerce consignments along with the requirements and procedures concerning VAT, customs and security regulations. The assessment is based on extensive desk research and intensive stakeholder interaction. Online surveys and interviews were conducted among EEA designated operators, national regulatory authorities and ministries, and national customs authorities gathering input from practical and regulatory perspectives regarding the expected changes and challenges involving international postal services. The study concludes that the provision granting designated operators the right to ‘self-declare’ terminal dues rates for the delivery of imported e-commerce goods will reduce the distortions under the current system, while the reforms in customs and import VAT regulations are a step in the direction towards levelling the playing field between postal and express operators, as well as between EU and non-EU e-retailers and online marketplaces. While this represents significant progress, some challenges are expected to persist. RÉSUMÉ Le commerce électronique transfrontalier a stimulé les importations de paquets de faible valeur en provenance de la région Asie-Pacifique vers les États membres de l’EEE. La croissance importante des importations de paquets de faible valeur, notamment de la Chine, met au défi les opérateurs désignés et les autorités douanières sur le marché unique. La présente étude, réalisée par WIK-Consult, analyse le développement des services postaux internationaux dans l’EEE, évalue l’impact des frais terminaux et des taux autodéclarés dans le cadre des règles UPU sur les opérateurs désignés et examine les modèles d’importation pour les envois internationaux du commerce électronique ainsi que les exigences et les procédures concernant la TVA, les douanes et les réglementations en matière de sécurité. L’évaluation se fonde sur des recherches documentaires extensives et sur une interaction intensive avec les parties prenantes. Des enquêtes en ligne et des entretiens ont été menés parmi les opérateurs désignés de l’EEE, les autorités nationales de réglementation et les ministères, ainsi que les autorités douanières nationales, afin de rassembler des éléments concernant les perspectives pratiques et réglementaires concernant les modifications et les difficultés attendus pour les services postaux internationaux. L’étude conclut que la disposition accordant aux opérateurs désignés le droit « d’autodéclarer » des frais terminaux pour la livraison de marchandises du commerce électronique importées réduira les distorsions existantes dans le cadre du système actuel, alors que les réformes des réglementations douanières et en matière de TVA constituent un pas dans la direction de l’uniformisation des règles du jeu entre les opérateurs postaux et ceux express, ainsi qu’entre les détaillants du commerce électronique de l’UE et hors Union européenne et les marchés en ligne. Bien que ceci constitue un progrès important, certaines difficultés devraient persister. INTERNATIONAL POSTAL SERVICE, REMUNERATION AND REGULATION Contents LIST OF FIGURES .......................................................................................................... 9 LIST OF TABLES .......................................................................................................... 11 COUNTRY ABBREVIATIONS .......................................................................................... 13 ABBREVIATIONS ......................................................................................................... 14 EXECUTIVE SUMMARY ................................................................................................. 16 RÉSUMÉ ANALYTIQUE .................................................................................................. 27 1 INTRODUCTION ................................................................................................... 41 1.1 Background of the study.............................................................................. 41 1.2 Objectives of this study ............................................................................... 42 1.3 Methodology .............................................................................................. 42 1.4 Outline of the study .................................................................................... 45 2 DEVELOPMENT OF INTERNATIONAL E-COMMERCE MARKETS ..................................... 46 2.1 Development of major e-commerce flows ...................................................... 46 2.2 How e-commerce items are transported through the single market ................... 55 2.3 Transformation of the international postal services market .............................. 62 2.4 VAT relief for low-value consignments ........................................................... 65 2.5 Conclusions ............................................................................................... 68 3 INTERNATIONAL POSTAL SERVICES AND IMPORT MODELS FOR E-COMMERCE CONSIGNMENTS .................................................................................................. 70 3.1 Universal Postal Union and the postal product classification ............................. 70 3.2 EEA markets for international postal services ................................................. 73 3.3 Models for the import of cross-border e-commerce consignments ..................... 83 3.3.1 Direct to consumer: Designated operators .......................................... 85 3.3.2 Direct to consumer: International express carriers ............................... 87 3.3.3 Direct to consumer: Consolidators ...................................................... 89 3.3.4 EU warehouse based fulfilment .......................................................... 95 3.4 Conclusions ............................................................................................... 98 4 REMUNERATION SYSTEMS OF THE UPU ................................................................. 101 4.1 Organisation and acts of the UPU ................................................................ 101 4.2 History of UPU remuneration systems .......................................................... 110 4.3 Limitations on remail and ETOEs ................................................................. 114 4.4 Terminal dues in the 2016 UPU convention ................................................... 117 4.5 Terminal dues amendments by the Geneva Extraordinary Congress (2019) ...... 125 4.6 Introduction of ‘self-declared rates’ for E-format items, 2020-2021 ................. 130 4.7 Terminal dues proposal for 2022 to 2025 (2020 Convention) .......................... 134 4.8 Inward land rates ...................................................................................... 138 4.9 Supplementary services ............................................................................. 139 4.10 Alternative remuneration agreements .........................................................
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