World Customs Organization Takes On E-Commerce Challenges in Indonesia

Much has been stated about the tremendous challenges posed by the growth of e-commerce on U.S. Customs and Border Protection (CBP). Keeping the American people and economy protected from harmful or counterfeit products arriving by mail among the hundreds of millions of small packages arriving each year has created a host of new risk management challenges for CBP. 

However, the U.S. is not alone in grappling with the problem of a lack of advanced information associated with e-commerce. The WCO and the Universal Postal Union (UPU) are supporting Indonesia Customs with an effort to enhance the exchange of advanced electronic data used to conduct risk management on the influx of small packages. Indonesia, much like the U.S., is also trying to properly screen small and low-value shipments which have increased in volume at Indonesia’s borders. Currently,  94% of all international shipments to Indonesia are below $100 USD, Indonesia’s de minimis,  in value. Items below the de minimis are largely exempt from submitting advanced data typically used for targeting and risk management purposes. In the U.S. this amount is $800.

In a memorandum between the WCO and UPU, the organizations acknowledge the need for Postal and Customs agencies worldwide to work together to implement security regulations and to adopt joint strategies to combat drug smuggling via mail. Indonesia is now testing UPU’s Customs Declaration System (CDS) which allows users to exchange advanced data and calculate required duties and taxes between participating nations. 

Proposed Data Legislation for U.S. Postal Service

​In an effort to combat drug trafficking via mail across its borders, on September 17, the U.S. Senate advanced a bill aimed at closing data-sharing loopholes within the U.S. international mailing system. The bill would require the United States Postal Service (USPS) to receive “advanced electronic data” on the contents of international packages before they reach U.S. Ports of Entry, and to transmit the data to CBP.  USPS’ lack of advanced information has concerned many across U.S. agencies and within Congress for years. Calls for reforms have grown louder as e-commerce sales have risen, resulting in increased volumes of small-low value goods entering the country via USPS.

Risk management of international small packages and mail has changed drastically in recent years with the growth of e-commerce. Many countries, such as Indonesia and the United States, are attempting to identify solutions, such as increased use of advanced electronic data to detect dangerous packages in a cost-effective manner.  WCO and UPU seem confident that an enhanced data flow will allow Indonesian customs to assess packages in a more secure and efficient manner.  Indonesia is expected to fully utilize WCO and UPU’s systems by 2020.