The European Union has agreed its most significant customs reform in decades, introducing new powers to fine online marketplaces and tightening controls on billions of low-value imports entering the bloc.

The agreement between the European Parliament and Council of the European Union sets out a framework that will treat ecommerce platforms as the legal importer of goods sold into the EU, shifting responsibility for duties, safety compliance and documentation away from consumers. According to reporting by Reuters, companies that repeatedly breach the rules could face fines of between 1 and 6 per cent of their annual EU sales.

Makis Keravnos, Cyprus finance minister, said the deal marked “the greatest reform since the creation of the Customs Union in 1968”, adding that it would “facilitate trade and ensure the proper collection of duties, in a simplified manner, and with the required legal certainty”.

The overhaul is designed to address the surge in cross-border ecommerce, with Reuters reporting that 5.8 billion low-value parcels entered the EU in 2025. Data from the Council shows 4.6 billion consignments under €150 arrived in 2024, with 91 per cent originating from China.

Under the new system, the EU will scrap the long-standing €150 duty exemption for small parcels and introduce a temporary €3 charge from 1 July 2026, according to Retail Gazette. A separate EU-wide handling fee will also be applied to distance sales, with the level to be set by the European Commission before implementation by November 2026.

The reform establishes a centralised EU customs data hub, allowing businesses to submit import information once rather than to multiple national authorities. The platform will go live for ecommerce goods in July 2028 and expand to cover all imports by 2034, improving data sharing and risk monitoring across member states.

A new EU Customs Authority will be created to oversee the system and coordinate enforcement. Reuters reported that the agency will be based in Lille, France, employing around 250 staff and analysing real-time trade data to identify high-risk shipments.

The European Commission has cited widespread non-compliance among imported goods as a key driver of the crackdown. In a recent control operation, it found that 65 per cent of cosmetics and more than 60 per cent of personal protective equipment and food supplements failed to meet EU standards.

Separately, Peter Kyle signalled a potential shift in the UK’s trade stance, telling City AM that closer alignment with the EU could offer the “best opportunity” to improve economic prospects. He declined to rule out a return to the customs union, arguing that European countries must “seek opportunities as a continent” to compete with the scale of the US and China.

Kyle added that he did not want the UK to become “bogged down” in institutional arrangements, instead pointing to broader cooperation across sectors such as clean energy, health technology and automation as part of upcoming negotiations with Brussels.

The legislation must still be formally adopted, with full application expected 12 months after publication in the EU’s official journal.

---