E-commerce: Global considerations in a Canadian context

BY CAROL WEST, President of the Canadian Society of Customs Brokers

THERE are few issues today as complex for cross-border traders as e-commerce. And there are few issues which have so quickly mobilized global efforts to harmonize requirements, both to facilitate the increasing volumes of e-commerce, and to meet the needs of Customs administrations to manage the associated risk.

Let’s start with the complexity of defining e-commerce. Different countries may define e-commerce by online ordering and payment, small package, low value, transportation mode, or purchaser. This creates a dilemma: different definitions mean different challenges, making it impossible to find a common solution to manage these shipments.

The World Customs Organization (WCO) recognized this when it established its Working Group on E-Commerce and developed the WCO Framework of Standards for E-Commerce. For the purposes of the Framework, it was agreed that e-commerce has the following attributes:

• Online ordering, sale, communication and possibly payment,
• Cross-border movement,
• Tangible goods, and
• Destined to a consumer (commercial and non-commercial).

There are a number of reasons why Canadians need to change their thinking about e-commerce.

First, e-commerce is broader than what we know as Courier Low Value or Low Value shipments. Years ago, we developed excellent processes in these areas which need to be reconsidered in a broader context and modernized so that they can realize the full benefit of data analytics.

Next, we need to change our thinking about de minimis, especially with the intention to separate the threshold for duty from that of tax under CUSMA (Canada-United States-Mexico Agreement).

Third, the business of e-commerce has brought new stakeholders to the table. These include representatives of e-commerce platforms, foreign e-vendors, and fulfilment warehouses. We have to be inclusive, but also mindful of the need for harmonization and consistency of processes, and considerations of legal liability and compliance obligations.

Additionally, we are seeing more B2B e-commerce and more e-commerce shipments moving by modes other than courier and post. We have to ensure that our processes manage risk and facilitate e-commerce transactions across all modes.

Finally, we can’t lose sight of the pressure on our own Customs administration to manage the volumes of transactions under e-commerce. It has been said in many different contexts, including ecommerce, that the status quo is not an option. We need to better understand what our government knows and doesn’t know related to e-commerce risk management and revenue collection. We need to work constructively with our government on data elements, data flows, and business processes. We need to do that within the work which is occurring globally at the WCO, in which both CBSA and our own organization are deeply engaged.