Tag / e-commerce

by Mike Poverello

WTO Joint Statement Initiative on E-commerce

The COVID-19 pandemic has highlighted the digital economy’s importance, accelerated the digital transformation and heightened the need for global rules governing digital trade. As Co-convenors of the Joint Statement Initiative on Electronic Commerce, we are committed to responding to this challenge. This initiative will update the WTO rulebook in an area of critical importance to the global economy.

We recognise the importance of the digital economy in post-COVID-19 economic recovery. The digital economy offers enormous opportunities for developing Members and least-developed country (LDC) Members, including by lowering the costs for businesses, particularly MSMEs, to access and participate in global markets. WTO rules and commitments on digital trade can help unlock these opportunities.

In this context, we will continue to drive negotiations towards a high standard and commercially meaningful outcome building on existing WTO agreements and frameworks. We will continue to promote inclusiveness and encourage the participation of as many WTO Members as possible in the negotiations, which were launched in our January 2019 Ministerial statement.

We welcome the substantial progress made to date in the negotiations. We have achieved good convergence in negotiating groups on eight articles – online consumer protection; electronic signatures and authentication; unsolicited commercial electronic messages; open government data; electronic contracts; transparency; paperless trading; and open internet access. The outcomes already achieved in these areas will deliver important benefits including boosting consumer confidence and supporting businesses trading online.

In addition, we have seen the consolidation of text proposals in other areas, including on customs duties on electronic transmissions, cross-border data flows, data localisation, source code, electronic transactions frameworks, cybersecurity, and electronic invoicing, as well as advanced discussions on market access. We will intensify negotiations in these areas from early 2022. We note that provisions that enable and promote the flow of data are key to high standard and commercially meaningful outcome.

Participants in the initiative support the continuation of the multilateral e-commerce moratorium in fostering certainty and predictability for businesses. The co-convenors consider it crucial that the initiative makes permanent among participants the practice of not imposing customs duties on electronic transmissions.

We recognise the importance of supporting the engagement of developing Members and LDC Members in the initiative, including implementation of commitments. We will continue to deepen the discussion, including through a series of roundtables, dialogues and webinars, on capacity building options and support for implementation for developing Members and LDC Members in 2022.

In light of the strong progress that has been achieved to date, the co-convenors will arrange the JSI work programme to secure convergence on the majority of issues by the end of 2022. We will identify opportunities throughout 2022 for Ministers to provide guidance on key issues in the negotiations.

We look forward to working with all participating Members as we intensify the negotiations and work towards a successful conclusion.

The Hon Dan Tehan MP, Minister for Trade, Tourism and Investment, Australia

H.E. Mr HAYASHI Yoshimasa, Minister for Foreign Affairs, Japan
H.E. Mr HAGIUDA Koichi, Minister of Economy, Trade and Industry, Japan H.E. Mr Gan Kim Yong, Minister for Trade and Industry, Singapore

Advertisement
by Mike Poverello

France orders block on online store Wish on safety grounds

France has ordered search engines and other platforms to delist the online retail site Wish, saying it is a source of non-compliant and unsafe products. 

The website – which has also been accused of allowing the sale of counterfeit goods – has been investigated by France’s DGCRF, which regulated good and services in France.

The agency carried out test purchases of products including electronic devices, toys and costume jewellery, and determined that 95 per cent of toys did not meet EU standards, and 45 per cent were dangerous to children.

Moreover, 95 per cent of electronic devices were non-compliant, almost all of which (90 per cent) were hazardous, with 62 per cent of costume jewellery also deemed risky to consumers.

The DGCRF also concluded that Wish wasn’t meeting its obligations on carrying out product withdrawals and recalls “as is required by its status as a distributor.” It is the first time that such an action has been taken by an EU member state, according to the regulator.

“This decision aims to protect consumers and fight against unfair competition from economic operators,” said Bruno Le Maire, France’s economy and finance minister.

“These players are flouting product safety regulations,” he added. “The same rules must be applied in physical stores and online stores.”

Last year, the DGCRF said it had conducted a year-long investigation into Wish which found evidence of the sale of counterfeit products falsely claiming to be from major brands.

The investigation came after UK consumer group Which carried out test purchases of a number of items on Wish which turned out to be either fake, illegal, dangerous, never delivered, or arrived too late to be tested properly.

US-headquartered Wish has responded by saying it will challenge what it considers to be “an illegal and disproportionate act” in the courts.

The company says it is under no obligation to carry out controls on the 150 million products sold by the platform – many from suppliers in China – but claims it has invested in measures to weed out quality problems.

Source: Securing Industry

by Mike Poverello

Global Trade Braces for a Mini Y2K With Customs Code Overhaul

Picture by Kyle Glen

The following article was published in Supply Lines, Bloomberg

As if the foot soldiers of global trade needed more complications this holiday season, many logistics managers and customs brokers are starting to brace for a mini Y2K moment come Jan. 1.

That’s when changes will take effect to the official nomenclature for hundreds of product groups used to classify imports and exports. So-called Harmonized System numbers — known as HS codes — exist on more than 5,000 product categories developed by the World Customs Organization, an intergovernmental group in Brussels that updates them every five years or so.

In 2022, the biggest changes are coming for electrical machinery and parts, wood, textiles, fish and organic chemicals.

More than 350 global HS codes are getting updated, and some 1,500 harmonized U.S. tariff codes are subject to revisions, according to a recent webinar from Flexport. The categories are important, if a little wonky, because most items of international commerce fall into one and they can determine tariff levels.

Some codes are disappearing. After a respectable run through the 1970s and ‘80s, answering machines are about to lose their HS code. Made obsolete by voicemail, they rank 5,296th among 5,832 U.S. imports this year, according to Flexport data.

Globes — those spinning spheres that taught geography to schoolkids of the 1970s — will have their number (4905.10) retired, too.

“The trade in globes is not quite what it used to be,” Marcus Eeman, a global customs manager with Flexport, lamented about the U.S.’s 4,025th-biggest import.

Chemical Weapons?

Some new HS codes will appear, like one for pomace oil, a lower-grade form of olive oil.

Among the more intriguing additions, Flexport says there’ll be a “new code created for petroleum resins and other organic chemical compounds used in the manufacture of chemical weapons.” That should make it easier for authorities to track which countries are importing it and potentially using them illegally.

Other categories are getting renamed. Lamps will no longer fall under “lamps,” they’ll be classified as “luminaires.” There will be new subheadings for popular gadgets like smart phones, high-speed digital cameras and flat panel displays.

Economies preparing for the changes include the U.S., China, the European Union, Canada and Australia. The U.K., meanwhile, is still “finding their footing with Brexit and we expect them to get their act together by the end of the year,” Eeman said.

For all the changes to take effect on Jan. 1 in the U.S., there will need to be a presidential proclamation published in the Federal Register with the required 30 days of advanced notice.

So it’s worth looking out for that in coming days.

“My fear is that Dec. 1 will come and the presidential proclamation will be published and that’s when people will start to scramble,” said Tom Gould, Flexport’s vice president of global customs. “Then Jan. 1 will hit and you’ll have a bunch of people that have products that they need to import but they don’t know the classification, because the code that they’ve used in the past is no longer a valid code.’’

Source: Bloomberg, authored by Brendan Murray, 24 November 2021

by Mike Poverello

WCO – New technology-assisted capacity building: the Virtual Reality (VR) assisted training program

The WCO has announced that it has set up a VR training program with the support of CCF-Korea at the WCO Headquarters on 9th November 2021. 

This program was developed and first established in RTC Korea last September to support customs officials to learn and understand the basic procedures of physical inspection on containerized cargo at a maritime port.

With the help of VR devices and a cyber master, a trainee is requested to select one of three individual scenarios and detect contraband items such as drugs, counterfeit goods and explosives smuggled in imported cargo.

After selecting one case, documents have to be compared and discrepancies identified. The program will show necessary steps to wear safety gear, inspect the exterior of the container, scan it with ZBV vehicle and study the X-ray black/white and coloured images. In the following step, the container is opened and inspected with tools like a chisel, magnifying glass, scanner, etc., at a bonded area of a dedicated warehouse.

RTC Korea, KCS and WCO Secretariats contributed to the program production and provided materials on drug smuggling cases with pictures, advice on preparatory steps, inspection scenarios taking into account risk indicators from the WCO RM compendium.

The length of one training session is approximately 10 to 15 minutes depending on the trainee‘s progress, and the devices for the VR training are the headset, controller, high-end computer, TV screen and kiosk. The program also developed a screen version that Customs officials can play on their desktop computer and notebook and have the 3D experience.   

During the experience session, Dr. Kunio Mikuriya, the Secretary General of the WCO, expressed high interest and called on feedback on future activities from those who experience the program to make it more relevant for Members’ capacity building. In this regard, the immediate task is to prove its effectiveness through regional capacity building activities and WCO meetings. 

Dr. Taeil Kang, the Director of Capacity Building Directorate expressed his plans to develop content for other topics including e-commerce transactions, X-ray image screening and uploading on CLiKC and installation in other WCO regions. 

For more information, please contact Sungsig Kim, CCF-Korea manager at the Capacity Building Directorate (sungsig.kim@wcoomd.org).

by Mike Poverello

E-Commerce: Joint Statement Initiative (JSI) Update

The importance of developing global digital trade rules has never been clearer. The COVID-19 pandemic has accelerated the digital transformation, bringing about a surge in online activities. E-commerce will be critical to the global economic recovery. The Joint Statement Initiative on E-commerce (JSI) is an opportunity for the WTO to respond to this urgent need.

There has been encouraging progress in the JSI since negotiations were launched in 2019. Despite the challenges presented by COVID-19, co-conveners Australia, Japan and Singapore have ensured that work continues in virtual and hybrid formats. The number of participants in the initiative has grown to 86 WTO Members, collectively accounting for over 90 per cent of global trade and representing all major geographical regions and levels of development.

Consolidated Negotiating Text

JSI participants have developed a consolidated negotiating text that captures progress so far and will form the basis of the next stage of negotiations. The consolidated text was circulated among participants on 7 December 2020.

The consolidated text is based on Members’ proposals. These proposals cover the following themes:

  • enabling electronic commerce;
  • openness and e-commerce;
  • trust and e-commerce;
  • cross-cutting issues;
  • telecommunications;
  • market access; and
  • scope and general provisions.

We have been able to advance the negotiations, guided by the objective of achieving WTO-plus outcomes that deliver meaningful benefits for businesses and consumers. Highlights include the good progress made in small groups on issues such as e-signatures and authentication, paperless trading, customs duties on electronic transmissions, open government data, open internet access, consumer protection, spam and source code, among others. Proponents of services market access commitments have also developed a possible framework for negotiations on these issues.

Provisions that enable and promote the flow of data are key to a high standard and commercially meaningful outcome. Discussions on these issues are ongoing and will intensify from early 2021. Japan and Singapore hosted an information session on data flows and localisation rules in November 2020, involving negotiators and the private sector, to build better understanding and support for strong commitments.

Source: World Trade Organisation, 20 December 2020

by Mike Poverello

WTO – Negotiations on e-commerce continue, eyeing a consolidated text by the end of the year

WTO members participating in the negotiation of rules on e-commerce shared updates on the work done to streamline the negotiating text at a plenary meeting on 23 October. The co-conveners, Australia, Japan and Singapore, encouraged members to propose constructive solutions and show flexibility in an effort to deliver a consolidated negotiating text by December this year.

Facilitators of small group discussions reported on the work done in between plenary meetings to further streamline text proposals in the areas of spam, source code, open government data, trade facilitation in goods, services market access, electronic signatures and authentication, and online consumer protection.

Participants also re-engaged on topics that had been scheduled for consideration in the postponed March and April-May negotiating rounds, namely protection of personal information/data.

The co-conveners set common principles for the small groups to make their work more efficient and consistent, noting that transparency and inclusion should guide their work. 

Ambassador George Mina (Australia), on behalf of the co-conveners, noted that reports from small groups are encouraging and that there is still some work that needs to be done. He said that the participating members are only two months away from the deadline for delivering a consolidated negotiating text and that the consolidated text should include “clean text” on e-signatures, authentication, spam and online consumer protection. To that end, he urged participants to engage with each other informally, not only in small groups but also bilaterally, and to show flexibility wherever possible. 

The co-conveners set 16 November as a deadline for any new proposals to be submitted by participating members.

Ambassador Mina highlighted that COVID-19 has increased the urgency of developing global rules on digital trade and that these negotiations are seen as a key test for the WTO to respond to modern commercial realities.  

WTO negotiations on trade-related aspects of electronic commerce were launched in Davos in January 2019 with the participation of 76 members. The number of participating members now stands at 86. Participating members seek to achieve a high-standard outcome that builds on existing WTO agreements and frameworks with the participation of as many WTO members as possible. The e-commerce initiative was created on the margins of the WTO’s 11th Ministerial Conference in Buenos Aires. 

Throughout their negotiations of the several e-commerce related topics, members have been encouraged by the co-conveners to consider the unique opportunities and challenges faced by members, including developing countries and least-developed countries, as well as by small businesses. 

Ambassador Tan Hung Seng of Singapore, as a co-convener, encouraged members to propose constructive solutions as discussions intensify. He said that the initiative is well placed to swiftly develop something concrete that would benefit the global economy. 

Ambassador Kazuyuki Yamazaki of Japan, as a co-convener, said that it was important to make as much progress as possible, and for the consolidated text to be comprehensive in reflecting issues proposed by members. He also urged members to take a holistic approach to the work of the initiative and address more challenging issues. 

The co-conveners plan to hold ambassador level consultations to discuss and hear members’ views on the way forward between 28 and 30 October. The next plenary session will be on 5 November, during which an information session for members on data-related provisions will be hosted by Japan and Singapore.

Source: WTO, 23 October 2020

by Mike Poverello

Guide to the WCO E-Commerce Framework of Standards

It is often difficult to navigate and assimilate the myriad of documentation and annexes associated with significant initiatives such as WCO’s ‘framework of standards’. True, the documentation is detailed and technical. There are, however, online training courses available on the WCO website for users wishing to attain a level of proficiency on a particular subject. Furthermore, member states can request technical assistance from WCO in the establishment of capacity for the implementation of specific Customs initiatives.

However, sometimes one requires a synopsis or insight as to what a particular initiative aims to achieve. This is important so as to establish the nature and extent of change and capacity required in one’s own domestic situation. In my area of operation, MS PowerPointTM plays an important role in uniformly conveying key information to a multitude of people across different disciplines in the organisation. Im happy to share a ‘guide’ which consolidates most of the ‘official’ WCO documentation that comprise the Framework of Standards on E-Commerce. When viewed as a PowerPoint Show, all hyperlinks to the official WCO E-Commerce documentation are available for download or display. Below are versions for both standard PowerPoint or PowerPoint Show. I hope it will serve some useful purpose.

Guide – WCO Framework of Standards on E-Commerce [PPTX, 3MB]

Guide – WCO Framework of Standards on E-Commerce [PPSX, 3MB]

by Mike Poverello

WTO Report – Role of e-Commerce during the COVID-19 pandemic

The WTO Secretariat has published a new information note looking at how the COVID-19 pandemic has affected e-commerce, including the implications for cross-border trade. It notes the increased use of e-commerce as consumers adapt to lockdowns and social distancing measures and draws attention to several challenges, such as the need to bridge the digital divide within and across countries.

As well as highlighting the uptick in e-commerce during the COVID-19 crisis, the report looks at measures introduced by governments to facilitate e-commerce and some of the challenges facing these initiatives. Governments have worked to increase network capacity, encourage the provision of expanded data services at little or no cost, and lowered or scrapped transaction costs on digital payments and mobile money transfers. The report also looks at ongoing e-commerce discussions in the WTO and how continued implementation of the WTO’s Trade Facilitation Agreement could address some of the challenges brought to the fore by the COVID-19 pandemic.  

The report argues that the experiences and lessons emerging from the COVID-19 crisis could be a further incentive for global cooperation in the area of e-commerce, which could help to facilitate cross-border movement of goods and services, narrow the digital divide, and level the playing field for small businesses.  

Download the report here!

Source: World Trade Organisation

by Mike Poverello

WCO News – February 2020

This edition’s “Dossier” focuses on how Customs can foster sustainability for people, prosperity and the planet, the WCO’s theme for 2020, and includes a selection of articles on the implementation of Multilateral Environmental Agreements, the role of the Harmonized System, the trade in illegal timber, and tools for logistics planning and supply chain optimization.

The “Panorama” section covers various topics such as internal communication, cultural goods, partnership with express couriers to fight illicit trade, management of e-commerce transactions via blockchains, and measurement of the time required to process imports in order to boost logistic service providers’ efficiency.

You can also read an insightful “Point of View” article on how machine learning can automate the determination of the valuation of goods, as well as an “Events” article containing highlights from the WCO Communication Strategies Conference held in October 2019.

Source: WCO, WCO News, February 2020

by Mike Poverello

USCBP extends secure e-commerce supply chain pilot

Customs and Border Protection (CBP) has expanded its pilot of a new, voluntary scheme to try to improve the security of low-value shipments entering US borders.

The Section 321 Data Pilot is focused in particular on e-commerce, and aims to improve data-sharing between online marketplaces, carriers, technology firms and logistics provider to help protect American consumers from illicit goods arriving by air, ocean, truck, or rail.

That includes, “illicit narcotics, unregulated prescription drugs, brand counterfeits, and unsafe food and beauty products”, according to the CBP, which plans to run the pilot until August 2021.

Nine companies have been selected to participate in the pilot, including e-commerce giants Amazon and eBay, carriers Zulily, FedEx, DHL and UPS, as well as technology firm PreClear and logistics providers XB Fulfillment and BoxC Logistics.

CBP has said that it plans to expand access to all interested and qualified participants “in early 2020.”

The participants will provide cargo origin, content, tracking, recipient and other information to CBP upfront, in addition to the information that is currently legally required for Section 321 shipments – in other words one shipment per day for eligible importers, individuals or companies with a value of $800 or less.

CBP says it wants to see whether having that additional information will enable it to perform “more effective and efficient targeted screening” of these low-value shipments.

Research published in 2018 has suggested that two-thirds of counterfeit goods intercepted by customs around the world are discovered in small parcels sent through postal or courier services.

In part because they are harder for customs officials to track and seize, and also because in many jurisdictions they have not required detailed manifests for their contents. The US stepped up the manifest requirements for Section 321 shipments from January 1, 2019.

CBP broadened the scope of the 321 Data Pilot last month, shortly after the pilot was launched in August, to include ocean shipments and international mail which weren’t included in the original plan.

“Combined with the exponential growth of the online shopping market in the US over the past five years, CBP has seen a significant increase in small, low-value packages,” said the agency in a statement.

“Today, CBP processes more than 600 million express consignment and international mail shipments a year – approximately 1.8m a day. The unprecedented growth in volume of these low-value shipments requires creative solutions to interdict illicit and dangerous products to enter the US.”

Source: article by Phil Taylor, Securityindustry.com, 20 January 2020

by Mike Poverello

E-commerce in China extends Belt and Road Initiative

Cross-border e-commerce freight train [Xinhua]

From ancient trade to modern tech

Two millennia ago, camel caravans trekked across an inland route centered around Chang’an – today’s Xi’an, the capital of Shaanxi province – serving to connect China to western-lying regions of the world through trade and exchange.

Today, under the guidelines of the Belt and Road Initiative, cross-border and transcontinental transactions are booming online as well, with a key difference: unlike the ancient model, the online businesses of today’s digital era are more efficient, more diverse and far more extensive.

Smart technologies and modern logistics have enabled people to pick and choose products from overseas – from Argentina’s red prawns, Mexico’s avocados and Chile’s cherries to the Czech’s crystals, Myanmar’s emeralds and Bulgaria’s rose oil – and receive them within hours or days after a simple click.

The Belt and Road online

Countries involved in the Belt and Road Initiative have launched businesses on China’s online shopping platforms, among which the e-commerce giant JD.com alone has attracted more than 50 overseas e-stores.

At the same time, these e-platforms facilitate the export of Chinese products to 54 countries, among them Russia, Ukraine, Poland, Thailand, Egypt and Saudi Arabia.

China’s e-commerce sector, projected to reach 2 billion consumers globally by 2020, has become a pillar industry supporting worldwide trade, said Xing Yue, vice president of Alibaba.com, one of China’s leading e-commerce conglomerates headquartered in Hangzhou, the capital of Zhejiang province.

“With circumstances highlighting digital dividends, cross-border e-businesses do not only focus on selling products, but also on creating service-centered trade, a signal epitomizing digital commerce,” added Xing at the second Cross-Border E-Commerce Summit held in Zhengzhou, capital of Henan Province, in May this year.

According to Alibaba.com, the company’s annual online shopping spree hosted last November 11 – a day evolved from China’s Singles’ Day into an annual online shopping frenzy – attracted buyers from 225 countries and regions, generating a revenue of 168.2 billion yuan (US$26.25 billion) and producing 812 million orders.

AliExpress, a global business division of Alibaba.com established eight years ago, reached 100 million overseas customers as of April 2017. “We may be underestimating the actual size as people under the same roof may use the same account,” said Shen Difan, the general manager of AliExpress.

“Products made in China are nothing inferior to the rest of the world. However, the problem is that the small-and-medium-sized enterprises in China were unable to reach overseas customers,” Shen said, adding that e-commerce has allowed these businesses to tap into other markets, extending connections between the two sides.

E-commerce and drones reshaping trade

The change in delivery speeds in Russia exemplifies the convenience of online business. Before e-commerce took off there, overseas packages often took as long as 60 days to arrive to Russian households, after being sent to Moscow for a security check.

Now, however, with the adoption of big data, Russian customs is no longer required to send deliveries to Moscow for unpacking and examination. Instead, detailed information about each package, including dates, types and values of commodities, is made available online, enabling direct delivery to customers.

E-commerce – arising as one of China’s four major modern inventions, along with high-speed railway, Alipay and bicycle sharing platforms – has overhauled traditional industrial chains and reshaped the trade system across the world, the People’s Daily reported.

“I have been greatly interested in the rural logistics run by JD.com,” Wu Min, the editor in chief of the Italian weekly newspaper Il Tempo Europa Cina, said while paying a visit to JD.com’s Beijing headquarters on June 1 of this year.

“In the past few years, it cost us heavily to send newspapers to the countryside, where difficult geographic conditions blocked entrance. Today, with the use of drones, we are able to surmount the last-mile challenge and send our newspapers to rural readers at much lower costs,” Wu explained.

JD.com has also developed drones, weighing 13 kilograms each, to manage deliveries to outlying areas. Additionally, smart technologies including robotic couriers and unmanned inventory have enabled the companies’ shipments to cover 99 percent of the population nationwide, saving 70 percent of total logistical costs, the People’s Daily reported.

Source: China.org.cn, article by Wu Jin, 14 June 2018

by Mike Poverello

CBP – e-Commerce Strategy to address online shopping and growth of illicit goods

E-Commerce Strategic PlanCustoms and Border Protection has developed an e-commerce strategy in a bid to tackle the increase in online shopping and growth of illicit and counterfeit goods shipped as small packages.

The strategy, which notes that CBP must “adapt” to the new e-commerce landscape, seeks to address emerging threats posed by the global change in commerce habits and ensure CBP has the means to enforce violations.

Under the new e-commerce strategy, CBP will, among a number of measures, look to enhance data collection and intelligence, develop and utilise state-of-the-art techniques and technologies, review its existing legal and regulatory authorities, seek to strengthen partnerships with the private sector, facilitate international trade standards for e-commerce, and educate the American public of the risks, both as consumers and as importers, associated with non-compliant products.

The crackdown and new emphasis for the CBP reflects the shift from traditional methods of importing via large, containerised shipments to small, low-value packages as direct-to-consumer business becomes more common. This has presented new inspection and data challenges for CBP, especially as the volume of these small packages has increased.

In addition, transnational criminal organisations are increasingly shipping illicit goods to the US via small packages on the belief there is a lower risk of interdiction and less severe enforcement consequences if caught. CBP said this illicit activity poses a risk to the health and safety of Americans and compromises US economic security.

The new e-commerce strategy also follows a report last month by the Government Accountability Office, which reviewed the enforcement efforts by CBP and US Immigration and Customs Enforcement in light of the increase in online shopping and sale of counterfeit goods. The report found that CBP had conducted a limited evaluation of its efforts, suggesting its activities were not the most efficient or effective, and recommended it evaluate its activities to enhance intellectual property enforcement.

The new strategy has a strong focus on data, which is one of the current limitations around enforcement of small packages. For instance, according to the strategy document, CBP will strengthen partnerships with stakeholders and encourage information sharing, proposing benefits for those parties who share advance electronic data and other information and will penalise those who are not compliant in this area.

The agency will also increase its operational efficiency and effectiveness by using data analytics, data mining, and an array of powerful analytical tools. In addition, CBP will expand its existing advance electronic data pilot in the international mail environment to include additional foreign postal operators.

Potential technology options include mobile applications and an e-commerce resource library, the strategy notes. CBP will also develop a portal that contains a database on importers that CBP has vetted and deemed “trusted”.

Source: USCBP and Securing Industry, online article 2018.03.28

by Mike Poverello

eBay Authentication Service for luxury handbags – outlawing counterfeits

counterfeit handbags

[Picture: Ian Law/Shutterstock]

The following article, written by Katrina Megget, was published online by Securing Industry, detailing endeavours of the ‘online marketplace’ in counteracting the online sale of counterfeit products.

E-commerce sites, such as Amazon and Alibaba and including eBay and Groupon, have faced recent criticism for the level of fake products being sold on their platforms and for what, many have described, as poor efforts to stamp out these counterfeit goods.

Online marketplace eBay has officially launched an anti-counterfeiting and authentication programme for luxury handbags sold on its platform.

The service, known as eBay Authenticate which had previously been announced in January (2017), will verify, list and sell high-end handbags from 12 brands on behalf of sellers, with the aim of boosting shopper confidence in the products.

“We’re making it even easier for our buyers to shop quickly and confidently for luxury handbags,” said Laura Chambers, vice president of consumer selling at eBay. “With tens-of-thousands of high-end handbags currently available, eBay is primed to boost customer confidence in selling and shopping for an amazing selection of designer merchandise. We also believe our sellers will love this service, as it provides them with a white-glove service when selling luxury handbags.”

The service, which is only available in the US at present, is opt-in and works by using expert middle-men to ensure goods sold and bought online aren’t fake.

Sellers who have registered with eBay Authenticate, send their handbags to third-party industry experts partnering with the marketplace who verify the bag’s authenticity and then photograph, list, sell and ship the handbag to a buyer on behalf of the seller.

Verified handbags will be marked with an “Authenticity Verified” label and backed by a 200 per cent money back guarantee. Non-verified products will be returned to the seller at no charge.

Media reports suggest prices will be set by the expert rather than the seller, and will be based on eBay sales over the past 90 days.

The seller will receive 80 per cent of the final selling price, which eBay said was nearly twice as much as comparable online services.

The service is available for luxury handbags and wallets valued at more than $500 and currently includes 12 high-end brands, Balenciaga, Burberry, Celine, Chanel, Christian Dior, Fendi, Goyard, Gucci, Hermes, Louis Vuitton, Prada, and Valentino.

An introductory, limited offer will see the service accept luxury handbags valued at $250 and above until the end of January where sellers will receive 90 per cent of the final sale price.

eBay, which has 171 million active buyers worldwide, is looking to expand the programme to other brands and product categories in 2018.

According to the online marketplace, a woman’s handbag is purchased every 13 seconds on eBay in the US. But there is growing competition from other online retailers that focus on pre-owned fashion and accessories, such as The RealReal and Tradesy, which offer authentication services to keep fakes off their sites.

eBay had originally announced plans for the authentication service back in January. At the time of the announcement, Chambers said: “We know that many shoppers may be hesitant to purchase high-end products online. This service is designed to help quell some of those concerns and – in turn – enhance the opportunity for our sellers to get top dollar for their items.”

According to eBay, less than a fraction of a percentage point of all items listed on eBay are identified as potentially fake. But that hasn’t stopped infuriated brand owners taking action against eBay – the online marketplace has previously been sued by luxury brands LVMH and Tiffany & Co.

Feeling their reputations at risk, both Amazon and Alibaba have introduced a number of measures and have even sought legal action against counterfeiters to prove they are taking the issue seriously.

eBay’s authentication move shows it is following suit. The firm already has a number of detection and enforcement tools to fight fakes, including the Verified Rights Owner (VeRO) programme, which allows more than 40,000 rights owners to quickly report possible counterfeit goods.

Source: securingindustry.com, Katrina Megget, 18 October 2017.

by Mike Poverello

US-China: First Agricultural Commodity traded through Blockchain

bulk-carrier

The first full agricultural commodity transaction using a blockchain platform has been completed by Louis Dreyfus Company (LDC), Shandong Bohi Industry, ING, Societe Generale and ABN Amro.

The trade included a full set of digitalized documents (sales contract, letter of credit, certificates) and automatic data-matching, thus avoiding task duplication and manual checks. Time spent on processing documents and data was reduced five-fold. The companies involved said that other benefits included the ability to monitor the operation’s progress in real time, data verification, reduced risk of fraud and a shorter cash cycle.

In the test, the Easy Trading Connect platform was used to execute a soybean shipment transaction from the U.S. to China. The transaction involved user participation on the blockchain-based platform by teams from Louis Dreyfus Company as the seller and Bohi as the buyer, with banks issuing and confirming the letter of credit. Russell Marine Group and Blue Water Shipping also participated in the process, issuing all required certificates. The U.S. Department of Agriculture provided valuable insights on how to include phyto-sanitary certificates in the process.

The Easy Trading Connect platform was first validated with an oil cargo transaction in February 2017, with the subsequent launch in November 2017 of an energy consortium aiming to offer blockchain-based services to the energy sector. The same principle was then applied to develop a blockchain-based platform tailored to agricultural commodities trading.

ING, Societe Generale, ABN Amro and other major industry players such as LDC have a long-term ambition to improve security and operational efficiency in the commodity trading and finance sector through digitalization and standardization.

“One thing is clear: the digital revolution is transforming the commodities sector,” said Gonzalo Ramírez Martiarena, Chief Executive Officer of LDC. “Distributed ledger technologies have been evolving rapidly, bringing more efficiency and security to our transactions, and immense expected benefits for our customers and everyone along the supply chain as a result. The next step is to harness the potential for further development through the adoption of common standards, and welcome a truly new era of digital trade flow management on a global level.”

Source: Maritime Executive, 3 January 2018 (Image credit: David Hundley (LDC)

by Mike Poverello

WCO to unveil future norms for e-commerce trade

Kunio Mikuriya - Hindu Times

The Hindu Times reports that the World Customs Organization (WCO) will soon bring out guidelines on ‘cross-border e-commerce’, which will focus on preventing illegal trade as well as addressing the challenges stemming from the ‘digital divide’, according to the WCO Secretary General Kunio Mikuriya.

In an interview to The Hindu on his recent India trip, Mr. Mikuriya said, “We are developing guidelines on e-commerce to see how best Customs can facilitate legitimate trade through that route.” He added, “We [the WCO] will address issues related to digital divide by looking into what is blocking e-commerce trade, and what kind of enabling environment is needed to support developing countries so that they benefit more from e-commerce.”

Terming e-commerce as a “game changer” in global trade that is benefiting small firms and consumers, he said the new guidelines would, however, include provisions to prevent illegal trade and illicit financial flows. This would be ensured through measures that would help strengthen information exchange between Customs administrations of countries as well as collaboration with other government agencies.

The WCO has a Working Group on e-Commerce and four sub-groups. To develop guidelines on cross-border e-commerce, the work packages identified are: ‘trade facilitation and simplification of procedures’, ‘safety and security’, ‘revenue collection’, and ‘measurement and analysis’. According to the UN body ‘UNCTAD’, the value of online trade jumped from $16 trillion to $22 trillion between 2013 and 2015.

“The continuous increase in online trading has raised questions regarding regulation, consumer protection, revenue collection and national security,” according to the WCO’s ‘Study Report on Cross-Border E-Commerce’ (March 2017). “These questions cannot be dealt with individually, but require a common, broad approach by the international Customs community, together with all relevant stakeholders as a whole.”

The WCO said more sophisticated equipment was needed to combat illicit trading through low-value shipments in the postal, express and cargo streams.

“Pre-arrival information on the consignment and the consignee could be of great importance in detecting and intercepting illicit trade. In addition, the improvement of non-intrusive inspection equipment and an increase in the number of trained staff could help to enhance the detection rate of illicit goods,” it said.

In an article on e-commerce, the WCO’s Director of Compliance and Facilitation Ana Hinojosa pointed out that in many countries, there were de minimisthresholds that allow low-value packages to enter a country with little or no duties or taxes, and with much more simplified procedures.

“This has led to clever manipulations by either the shipper or the consumer to avoid the extra charges by splitting invoices, undervaluing the invoices or mis-declaring the items altogether,” wrote Ms. Hinojosa. Another type of manipulation used was to classify the item as something else or claiming a different country of origin for the product, to take advantage of better duty or tax rates, the WCO official said, adding that these distortions had had an impact on many countries’ revenue collection volumes. Therefore, “some countries… are re-evaluating their established thresholds due to the significant implications that the changes brought about by these growing volumes of low-value small packages are having on their fiscal revenues,” observed Ms. Hinojosa. Source: The Hindu, 2 August 2017.