EBSI projects
e-Origin
Helping customs brokers, online sellers and marketplaces to resolve customs compliance issues and IOSS (Import-One-Stop-Shop) fraud in cross-border e-commerce.
The vision
A group of 2 customs administrations and 2 private organisations in the EU e-commerce market.
Led by e-Origin, the vision is to have a global group of actively engaged actors, including all EU customs brokers, e-commerce and marketplace providers, and VAT and customs authorities in the EU. For this prototype, the Belgian VAT administration and customs authority, Amazon, and customs brokers in Liege airport (LGG) are used as satellite actors to work together to effectuate e-Origin's innovative solution designed to speed up cross-border parcel flow and help clients avoid penalties, unexpected delays, and losses.
Customs administrations
Private organisations
EU e-commerce market
The challenge
VAT gap and undervaluation of imported goods.
New European regulations on low-value declarations and the use of an Import One-Stop Shop (IOSS) removed the VAT exemption and simplified the collection of VAT on internet sales by e-commerce platforms. However, for customs declarations on goods imported into Europe, fraudulent practices aim to undervalue goods to systematically evade customs duties on low-value products and to use stolen IOSS numbers to evade VAT. Up to 65% of parcels entering the EU are currently undervalued to avoid customs duties on import. For the IOSS scheme alone, the yearly VAT fraud is evaluated at 7 billions euros.
The opportunity
Web3 has the potential to revolutionize cross-border e-commerce.
Web3 offers the opportunity for a new customs broker experience, allowing seamless verification of cross-border business-to-customer (B2C) distant sales shipments, without sharing any confidential data of online sellers or marketplaces with third parties. The result is a simplified customs clearance which improves the delivery experience and reputation of the marketplace and online sellers. For the customs brokers, it’s a guarantee that the declaration has not been manipulated by the carrier, and provides proof to avoid potentially substantial penalties.
E-Origin's presentation and verification infrastructure for online sellers and customs brokers bring together three main technologies:
- Digital Wallets: used by online sellers and customs brokers to receive, store, and send credentials on the move.
- Verifiable Credentials: for formatting, presenting, and exchanging credential data in a machine-friendly way.
- Blockchain: for delivering a highly secure, resilient, and decentralized way of verifying credential information.
The project
Building the foundation of a cross-border e-commerce verification services for customs declarations using EBSI.
The pilot project leverages the power of the European Blockchain Services Infrastructure (EBSI) to build the foundations needed for seamless cross-border e-commerce. The pilot unites VAT administration, marketplaces, online sellers, customs brokers and customs authorities in Europe to achieve this. e-Origin is using EBSI to pioneer a trusted ecosystem that fosters fair trade, sustainable, transparent, efficient and secured cross-border e-commerce processes.
The EBSI-ELSA project aligns with the EU's digital policy and circular economy goals, aiming to develop traceability system capabilities by 2028 using the Digital Product Passport (DPP).
The European Blockchain Services Infrastructure (EBSI) allows e-Origin to design, build, and operate the next generation of decentralized services. The objective of this pilot is to enhance the online sellers and customs broker experience by allowing them to:
- Store and share sales transaction proof.
- Receive seamless recognition of the sales transaction proof from customs authorities to facilitate customs clearance at the EU border.
- Enable secure data sharing and full control over sensible and confidential information from online sellers and marketplaces.
The scenario
Discover the scenarios.
1. Cross-border verification of B2C distant sales shipments.
Paul, a buyer in Italy, purchases a smartphone for less than 150€, including VAT, from an e-commerce platform. The order is registered by Amazon. The online seller, BestBuy, located in China, is notified and confirms the parcel within six hours. BestBuy uses its own shipping service, ChinaExpress, for delivery. BestBuy chooses ChinaExpress to transport the smartphone by plane to Liege airport in Belgium, marking the first entry point into Europe.
- BestBuy, having a digital wallet with e-Origin, automatically triggers the 1 issuance of a Shipment Identification into the public domain, making it available to any customs brokers.
- CustomsAgency, a customs broker at Liege airport, upon receiving the parcel (and Shipment Identification) for customs clearance from ChinaExpress, uses a digital wallet to 2 request a commercial transaction document from BestBuy. BestBuy 3 issues a Commercial TRansaction Document verifiable credential to the broker, who is able to compare it to the Shipment Identification and 4 submit the information in a customs declaration to the customs authority.
- The customs authority is then able to 5 verify against the EBSI ledger the Commercial Transaction Document verifiable credential and, finding the information reliable (the marketplace IOSS number and the intrinsic value of the parcel), releases the smartphone to the last mile operator handling the product on behalf of ChinaExpress for final delivery to Paul’s house in Italy.
The project plan
Current implementation stage and plan.
Next steps
Mobilisation of the ecosystem is key to driving adoption.
Achieving this unified cross-border parcel flow demands a strategic and operational paradigm shift, mobilising a vast ecosystem involving EU customs brokers, e-commerce and marketplace providers, and VAT and customs authorities in the EU. The creation of a cohesive digital infrastructure to resolve customs compliance issues and IOSS (Import-One-Stop-Shop) fraud in cross-border e-commerce necessitates common guidelines, including a new track and trace system and product authentication service for seamless Europe wide logistics operations and tax declarations.
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