How Chinese online retailers are tricking European customs

Low-cost platforms from China are not only posing major challenges for parcel logistics in Europe. Customs authorities are finding themselves increasingly overwhelmed by the flood of shipments from the Far East. In 2024, an average of twelve million parcels a day below the customs threshold of 150 euros to the EU. Chinese online retailers are systematically and widely using brazen tricks to circumvent this limit. Here you can find out how this is done, how customs deals with it, what impact this has on Europe and what the EU Commission wants to do about it.

The development at a glance

Online trade in goods under 150 euros imported directly into the EU by consumers has increased dramatically in recent years. While there were around 1.4 billion shipments in 2022, the number rose to around 2.4 billion in 2023 (of which 1.9 billion came from China) and exploded to almost 4.6 billion parcels in 2024 (4.17 billion from China). Around twenty percent of the volume is addressed to German customers.

Temu, AliExpress and Shein in particular have seen exponential growth in the EU market, attracting more than 75 million users from the EU within a few months in 2024. The rapid increase in imports poses significant challenges that need to be addressed urgently. From air freight logistics and customs controls to delivery to the end customer and the increasing environmental impact. Last but not least, trade in products that do not comply with EU legislation must be prevented. We have already been working with the EU investigations into illegal and dangerous products at Temu and AliExpress busy.

What are the most common tricks

The Belgian regional airport in Liège plays a central role, with more than one million parcels arriving in Europe from China every day - many of them destined for Germany. The airport is specifically used by the low-cost platforms because the customs authorities there are barely able to inspect every single shipment due to the sheer volume of consignments. Almost 200 customs officers check the parcel traffic from the Far East. "We are flooded with goods," says team leader Thomas José from Belgian customs. "We know that the senders are cheating on the value declarations. But we can't check everything."

This deliberate misrepresentation is a very common trick. For example, a parcel with an actual value of over 500 euros is declared as a shipment worth 50 euros. In this way, traders avoid the customs duties that would be due on goods worth 150 euros or more and pay too little import sales tax. Customs officials confirm that this is targeted fraud and that the senders are well aware of this.

Another particularly perfidious trick is to split an order with a total value of over 150 euros into several shipments. These parcels are often sent on different days and sometimes even to different sender addresses in order to create the impression of independent flows of goods. This not only commits customs and tax fraud, but also drives up the total number of parcels even further, which in turn leads to more freight traffic and is therefore also fatal from an environmental perspective.

At the same time, misleading designations such as "technical equipment" or "documents" are used to avoid routine checks. The unspecific classifications are deliberately intended to confuse and reduce the likelihood that a parcel will be checked more closely. In the meantime, the company is also using its own logistics networks and cooperations with partners, some of which reroute goods via third countries such as the United Arab Emirates or Turkey. In this way, potential obstacles are hidden in advance and the actual origin is disguised.

Effects on trade, the state and consumers

The consequences of these fraudulent practices are far-reaching. European online retailers who comply with the applicable customs and tax regulations are faced with massive distortion of competition. They are increasingly looking for their own solutions and responding strategically and structurally to the challenges. Many are consciously focusing on tested products with CE marking, traceable supply chains, transparent return conditions and high-quality customer service. In this way, they are positioning themselves as a trustworthy alternative to low-cost platforms whose products are often defective or unsafe.

Trade associations and consumer advocates have also been complaining about unfair practices for a long time. They are increasing the pressure on the EU to take action against this and to better support and protect European online retailers. "The same rules must finally apply to all market participants in the European single market," explained Stephan Tromp, Deputy Managing Director of the German Retail Association (HDE).

In turn, consumers often receive inferior products without CE marking or sufficient safety certificates. "Consumers must always be aware that buying cheap goods from China is obviously not sustainable," says Iwona Husemann, a lawyer at the NRW consumer advice center. In the event of damage, the reversal process is also complicated. Warranty claims are difficult to enforce and the lack of product liability poses risks to health and safety.

Ultimately, all EU citizens are affected by the fraud. State coffers miss out on billions of euros due to the loss of taxes, which are not available for infrastructure, tax relief or social benefits, for example.

The EU is looking for ways to increase transparency and fairness

In a Press release the EU Commission has outlined how it intends to put a stop to fraudulent practices and curb unfair competition. Coordinated measures at EU level are essential for this. A reform package has been introduced that provides for the abolition of customs exemption for shipments with a value of less than 150 euros. Furthermore, a processing fee is to be introduced in order to reduce the costs of monitoring compliance with EU regulations for such shipments. Control capacities are to be strengthened, e.g. through better data sharing and optimized risk assessment.

Uniform duty-free limits, stricter random checks and better information exchange between the member states would significantly reduce the loopholes in the system. At the same time, consumers need to be better informed about what they should look out for when ordering from non-EU countries. Indications of CE markings, detailed product descriptions and transparent shipping costs would be the first steps towards creating more trust in cross-border online trade.

The EU Commission calls on Member States, co-legislators and all stakeholders to work closely together to implement the measures described in the press release. Within one year, it will evaluate the impact of the increased controls and publish a report on the results. On the basis of this evaluation, the EU Commission will examine together with national authorities whether further legal acts or enforcement measures are necessary to ensure compliance with European regulations.

Conclusion

The cheap offers from China suggest supposed bargains, but the price advantage often comes at the expense of fairness, safety, the environment and government revenue. The combined tricks of parcel splitting, false declarations and the targeted use of freight hubs show how cleverly many online retailers from the Far East operate. Fair competition in international trade can only be restored through close cooperation between authorities, consumer advocates and platform operators. Until then, European consumers and online retailers need to be vigilant in order to recognize and counter dubious practices.