E-commerce and trade Archives | Digital Watch Observatory

EU introduces €3 duty on low-value e-commerce imports

From 1 July 2026, the European Commission is introducing a temporary €3 customs duty on low-value goods imported into the EU from outside the bloc, primarily through e-commerce platforms. The duty applies to a wide range of commonly purchased goods including clothing, toys, and electronics, covering items worth up to €150.

The duty is charged per customs tariff classification rather than by quantity. For example, purchasing five T-shirts attracts a single €3 charge because they share the same tariff code, whereas buying three T-shirts and a watch incurs two €3 charges because they fall under different classifications. Sellers or importers will declare and pay the duty through the customs process.

The measure is intended to create fairer competition for the EU businesses, improve consumer protection by strengthening oversight of imported goods, reduce customs fraud linked to undervaluation and false declarations, and address the environmental impact of growing volumes of low-value shipments.

The European Commission said the measure forms part of a broader customs reform package aimed at modernising border procedures, strengthening the single market and ensuring that businesses selling into the EU comply with the bloc’s safety and regulatory standards. The duty is described as a temporary measure.

Why does it matter?

The new customs duty reflects the EU’s broader effort to adapt its customs system to the rapid growth of cross-border e-commerce. By introducing a flat charge on low-value imports, the Commission aims to reduce incentives for undervaluation, improve enforcement of product safety rules and create more equal competitive conditions for businesses operating within the single market.

The measure could also influence the business models of major online retailers and marketplaces that rely on high volumes of low-cost imports. Whether the duty succeeds in improving compliance without significantly increasing costs for consumers or slowing legitimate trade will help shape future reforms of the EU’s customs framework.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!

WTO highlights AI opportunities for small businesses

The WTO’s Informal Working Group on Micro, Small and Medium-sized Enterprises (MSMEs) has highlighted AI as a key tool for helping small businesses compete in international trade.

During meetings on 29 and 30 June, WTO members explored how AI could strengthen supply chains, reduce trade barriers and help smaller firms navigate an increasingly uncertain global trading environment. The group also welcomed Ghana as its 106th member.

One of the highlights was the announcement of the 2026 Small Business Champions, recognising organisations using AI to support international trade.

Zambia’s Rinato Space was selected to apply satellite technology and AI to provide climate monitoring, early warning systems and capacity-building services for smallholder farmers, helping improve agricultural productivity and export opportunities.

France-based Koaloo.FI was also recognised for using generative AI to automate environmental, social and governance compliance, assess supply chain risks and improve access to financing for small suppliers.

The competition also recognised Colombia’s Cámara Colombiana de Informática y Telecomunicaciones and the Center for International Private Enterprise for developing an AI governance roadmap for Latin America that includes affordable AI tools for MSMEs.

Türkiye’s Globby was honoured for creating an AI-powered trade intelligence platform that helps small businesses identify international market opportunities and participate more effectively in global commerce.

WTO members acknowledged persistent barriers to AI adoption, including limited digital infrastructure, fragmented international standards, shortages of technical expertise, constrained access to finance and the need for supportive legal and regulatory frameworks.

WTO officials also presented ongoing initiatives, including preparations for the upcoming World Trade and Tech Day, alongside new AI-related learning tools and digital trade resources.

The meeting also focused on broader trade uncertainty affecting small businesses worldwide.

The meeting also addressed broader trade uncertainty affecting MSMEs. Representatives from organisations including World Intellectual Property Organization, the International Finance Corporation, the International Telecommunication Union, the Food and Agriculture Organization and the Pan African Alliance of Small and Medium Industries presented initiatives to improve market access, trade finance, intellectual property protection and digital trade participation.

Why does it matter?

The discussions reflect a growing recognition that AI is becoming an important enabler of international trade, particularly for smaller businesses that often lack the resources to compete with larger firms. By helping automate compliance, improve supply chain management and identify export opportunities, AI could reduce longstanding barriers to global market participation.

At the same time, the meeting highlighted that technology alone is not enough. Expanding the benefits of AI for MSMEs will depend on investment in digital infrastructure, skills, financing and interoperable regulatory frameworks, making international cooperation an increasingly important component of digital trade policy.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!

Russian draft law includes 48-hour crypto cooling-off rule

Russian lawmakers are considering a 48-hour cooling-off period for certain cryptocurrency transfers as part of a draft law on digital currencies and digital rights.

The measure would apply to non-qualified investors and is intended to protect users from fraud, according to comments from Vladimir Chistyukhin, First Deputy Governor of the Bank of Russia.

Chistyukhin said the cooling-off period would not apply to cryptocurrency trading itself. He clarified that the mechanism is intended for transfers to other accounts and similar operations, rather than brokerage activity.

The proposal forms part of a broader legislative effort to establish a legal framework for the circulation of cryptocurrencies in Russia. The State Duma adopted the government-backed draft law in its first reading in April.

Russian officials have framed the cooling-off mechanism as a targeted investor-protection tool rather than a broader restriction on market activity.

The proposal reflects a regulatory approach focused on reducing fraud risks while allowing parts of the crypto market to operate under a more formal legal framework.

Why does it matter?

The proposal shows how crypto regulation is moving beyond general warnings and enforcement actions towards safeguards built into transaction flows. A cooling-off period can slow down transfers linked to fraud, giving users and intermediaries more time to detect suspicious activity. The narrow scope is also important: by excluding trading and brokerage activities, Russian regulators aim to reduce consumer harm without directly limiting market liquidity or day-to-day trading.

Would you like to learn more about AI, tech, and digital diplomacy? If so, ask our chatbot!

Vietnam’s new e-commerce law takes effect

Vietnam’s Law on E-commerce came into effect on 1 July 2026, modernising the country’s digital economy framework after more than a decade of rapid growth in online commerce. The law addresses gaps that previous regulations failed to close, particularly around intermediary platforms, cross-border e-commerce, counterfeit goods, commercial fraud, and consumer rights infringements.

Under the new law, e-commerce platforms must verify sellers’ identities, disclose information about sellers, products and transaction terms, proactively identify violations, and establish effective complaint-handling mechanisms. They are also required to retain transaction data, provide it to authorities on request, and strengthen product information requirements, particularly for sensitive goods.

The legislation also promotes greener e-commerce through more efficient logistics and environmentally friendly packaging, while creating new opportunities for SMEs, household businesses and startups. Consumer protections have been strengthened through clearer rules on complaints, refunds, compensation and personal data, with experts expecting consistent enforcement to improve market confidence over time.

Major e-commerce platforms operating in Vietnam have already begun adapting, including by expanding the use of near-field communication (NFC) technology for seller verification and AI to detect counterfeit and intellectual property-infringing products. Although compliance costs may initially increase, the reforms are expected to reward businesses that invest in higher standards and strengthen the long-term development of Vietnam’s digital marketplace.

Why does it matter?

Vietnam’s new law reflects a broader shift towards platform accountability in digital commerce. By requiring marketplaces to verify sellers, retain transaction data and proactively tackle fraud and counterfeit goods, the government is placing greater responsibility on intermediaries to ensure the integrity of online marketplaces.

The legislation also illustrates how digital economy regulation is evolving beyond consumer protection alone. Combining AI-enabled enforcement, stronger data governance and sustainability measures, the framework aims to support long-term growth in e-commerce while increasing trust in Vietnam’s rapidly expanding digital economy.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!

Mauritius unveils fintech strategy to boost digital finance growth

Mauritius has launched its National Fintech Strategy 2026–2030, a roadmap aimed at strengthening digital finance, innovation and financial inclusion.

The strategy was developed by the Ministry of Financial Services and Economic Planning with technical support from the UN Economic Commission for Africa and input from public and private-sector stakeholders.

The government says the strategy is intended to position Mauritius as Africa’s trusted fintech hub while supporting sustainable growth and the wider digital transformation of financial services.

The roadmap focuses on six areas: regulation and innovation, digital infrastructure and cybersecurity, skills development, market growth, international cooperation and consumer protection.

Implementation will run until 2030 and will be overseen through a dedicated governance framework. Planned targets include shorter licensing approval times, expanded digital onboarding, stronger digital infrastructure and training more than 5,000 people each year in specialised fintech skills.

Officials said the strategy responds to the growing role of digital technologies in finance, including digital payments, digital assets, regulatory technology and cross-border financial services.

UNECA said the initiative could support fintech development in Mauritius and offer lessons for other African countries seeking to build more inclusive and competitive digital finance ecosystems.

Why does it matter?

Mauritius’ strategy reflects a wider African policy trend: governments are trying to move fintech from fragmented innovation into structured national development plans. Stronger digital finance ecosystems can expand access to financial services, support small businesses, improve cross-border commerce and attract investment. The focus on cybersecurity, consumer protection and skills also shows that fintech growth depends not only on new products, but on trust, regulation and institutional capacity.

Would you like to learn more about AI, tech, and digital diplomacy? If so, ask our chatbot!

EU customs reform targets low-value online imports

The EU has abolished the customs duty exemption for e-commerce parcels worth less than €150, introducing a temporary €3 duty on low-value items imported directly from non-EU countries.

The measure entered into force on 1 July 2026 and forms part of the wider EU Customs Reform. It is intended to create fairer competition between the EU retailers and non-EU online sellers while strengthening controls on unsafe or non-compliant products.

The previous exemption was designed for an earlier period of limited cross-border online shopping. The Commission said 5.9 billion low-value parcels entered the EU in 2025, representing 97% of all imported items but only 2% of their total value.

The EU authorities argue that the exemption distorted competition and created incentives to undervalue or split shipments to remain below the €150 threshold.

Under the new system, consumers should not have to pay the duty at the time of delivery. Businesses involved in selling and transporting imported goods will be responsible for customs payment and compliance.

The €3 duty is a transitional measure and will remain in place until 1 July 2028. After that, low-value imports will be treated under the standard customs framework, with duties based on product classification, origin and value.

The reform also introduces Product Identifiers, which become mandatory from 1 November 2026 to improve traceability and safety checks. A separate handling fee for imported e-commerce goods is also expected by November 2026.

Why does it matter?

The change addresses one of the biggest pressure points in the EU e-commerce: billions of low-value parcels entering the single market with limited customs duties and weak product-level data. Removing the exemption could reduce unfair advantages for non-EU sellers, strengthen enforcement against unsafe products and give customs authorities better tools to manage mass e-commerce imports. It also shows how the EU is treating online retail as a trade, consumer protection and digital platform accountability issue, not only a customs matter.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!

Canada and Germany strengthen semiconductor supply chains

Canada and Germany have signed a joint declaration of intent to strengthen semiconductor supply chains and deepen industrial cooperation, reinforcing collaboration in a technology that underpins AI, advanced computing and the digital economy.

The declaration was signed on the sidelines of the International Energy Agency’s (IEA) Annual Global Conference on Energy Efficiency by Carlos Leitão, Parliamentary Secretary to Canada’s Minister of Industry, and Stefan Rouenhoff, Parliamentary State Secretary at Germany’s Federal Ministry for Economic Affairs and Energy.

Canada said resilient and diversified semiconductor supply chains are becoming increasingly important as global demand grows for AI, advanced computing and connected technologies.

The declaration establishes a framework for policy dialogue and cooperation on investment, industrial development, technology and research. It also aims to support start-ups, scale-ups and small and medium-sized enterprises while building on both countries’ semiconductor expertise to strengthen competitiveness.

Canada described semiconductors as foundational technologies for the digital economy, highlighting their role in enabling AI and other emerging technologies.

The declaration also supports Canada’s National Artificial Intelligence Strategy: AI for All, particularly its focus on infrastructure, international partnerships and long-term competitiveness. It builds on a series of bilateral initiatives launched since late 2025, including the Canada-Germany Digital Alliance, a joint AI declaration, the Sovereign Technology Alliance, and cooperation on automotive manufacturing, batteries and critical minerals.

A separate February 2026 declaration also expanded bilateral industrial cooperation in auto and battery manufacturing and critical minerals. Officials from both countries said stronger semiconductor supply chains can support innovation, economic resilience and long-term prosperity.

The partnership adds semiconductor supply chains to a wider Canada-Germany agenda focused on trusted advanced technologies, economic security and the next generation of AI-enabled digital infrastructure.

Why does it matter?

Semiconductors have become strategic assets that underpin AI, advanced computing, telecommunications and many other digital technologies. By strengthening cooperation on chip supply chains, Canada and Germany aim to reduce supply chain vulnerabilities, encourage investment and support long-term technological competitiveness.

The agreement also reflects a broader trend of trusted technology partnerships among like-minded countries. Rather than focusing solely on trade, governments are increasingly coordinating industrial policy, research and supply chains to strengthen economic security and reduce dependence on concentrated sources of critical technologies.

Would you like to learn more about AI, tech, and digital diplomacy? If so, ask our Diplo chatbot!

New UK regime targets systemic stablecoin issuers

The Bank of England and the Financial Conduct Authority have set out how they will jointly regulate stablecoin issuers whose activities could pose risks to UK financial stability.

The joint approach forms part of the UK’s emerging stablecoin regime. Under the planned framework, the FCA will regulate UK-issued qualifying stablecoins, while issuers recognised as systemic by HM Treasury will also be subject to Bank of England oversight.

The authorities said the two-part regime is intended to provide clarity for firms while supporting innovation, consumer protection, market integrity and financial stability.

Stablecoin issuers may become systemic if their coins are widely used in payments and could create risks for the UK financial system. In those cases, the Bank would supervise prudential and financial-stability risks, while the FCA would continue to oversee consumer protection, competition and market integrity issues.

The framework includes transition arrangements for firms moving from FCA-only supervision to joint regulation. The Bank and FCA said this should help issuers scale without facing conflicting or duplicative requirements.

The approach also allows for issuers to be recognised as ‘systemic at launch’ where they are not yet operating at systemic scale but are likely to do so. Such firms could enter a phased supervisory pathway while meeting both FCA and Bank requirements.

The Bank is separately consulting on draft rules for sterling-denominated systemic stablecoin issuers. It intends to finalise its Code of Practice by the end of 2026, with regulated stablecoins expected to operate in the UK from 2027.

Why does it matter?

The UK framework is important because it creates a pathway for stablecoins to move from crypto-market products towards regulated payment instruments. By scaling supervision as issuers grow, the UK aims to support innovation without allowing systemically important stablecoins to develop outside financial stability oversight. The model could influence how other jurisdictions regulate digital money, especially where stablecoins are expected to support retail payments, wholesale settlement or cross-border transactions.

Would you like to learn more about AI, tech, and digital diplomacy? If so, ask our chatbot!

Central Bank of Azerbaijan submits draft crypto law for review

Azerbaijan has moved closer to regulating its cryptocurrency sector after the Central Bank completed a draft law on virtual assets and crypto markets and submitted it to state authorities for review.

Fidan Tofidi, Director of the Central Bank’s Financial Technologies and Innovations Department, said the legislation could be adopted before the end of the year. She described the framework as a major step for a sector that has so far remained unregulated in the country.

The proposed regime is expected to introduce licensing and supervision for virtual asset service providers operating in Azerbaijan. Regulators have previously said the framework should cover virtual asset markets and the activities of companies providing crypto-related services.

The initiative is part of Azerbaijan’s broader financial-sector development agenda, which includes work on virtual assets, shared know-your-customer mechanisms, supervisory technology and digital financial infrastructure.

Earlier Central Bank discussions on virtual assets focused on regulatory and supervisory approaches, market risks and opportunities, and the experience of countries such as Kazakhstan and Türkiye.

Azerbaijan has also tested crypto-related projects through its regulatory sandbox. One pilot involved a platform for buying, selling, exchanging and storing virtual assets, although the project was suspended after failing to achieve expected test results.

The Central Bank has maintained a cautious stance on a possible central bank digital currency, saying it is monitoring international developments before moving forward.

Why does it matter?

Azerbaijan’s draft law signals a shift from a legal grey area towards formal oversight of crypto markets and virtual asset service providers. Licensing and supervision could give regulators more visibility over market activity, strengthen consumer protection and help address money-laundering and terrorism-financing risks. The move also reflects a wider trend among emerging markets: rather than banning crypto outright, authorities are building frameworks to integrate digital assets into regulated financial systems.

Would you like to learn more about AI, tech, and digital diplomacy? If so, ask our chatbot!

US SEC reviews framework for crypto and other novel ETFs

The US Securities and Exchange Commission has opened a public consultation on how it should treat exchange-traded funds that invest in innovative asset classes or use novel investment strategies.

The request for comment focuses on so-called Novel ETFs and asks whether existing regulatory tools remain appropriate as the ETF market expands beyond traditional products.

The SEC said examples of Novel ETFs include funds linked to crypto assets, commodity-focused instruments, single-stock strategies, heightened leverage, blockchain-enabled opportunities, private assets and event contracts.

The consultation asks whether such products raise questions about investment company status, ETF listing standards, investor protection, market surveillance, arbitrage mechanisms and registration procedures.

The review comes after rapid growth in the ETF market. The SEC said total ETF net assets increased from more than $4 trillion at the end of 2019 to more than $12 trillion at the end of 2025, while the number of ETFs rose from almost 1,900 to more than 4,600.

The regulator is seeking feedback from funds, advisers, investors and other market participants on whether further action is needed to support innovation while protecting investors and maintaining fair, orderly and efficient markets.

Why does it matter?

The SEC consultation shows how regulators are reassessing ETF rules as products move into more complex and politically sensitive areas, including crypto assets and event-based instruments. Clearer rules could help issuers understand when a product can use existing ETF registration and listing pathways. At the same time, the review reflects concern that faster product launches should not weaken investor protection, market surveillance or the functioning of ETF arbitrage mechanisms.

Would you like to learn more about AI, tech, and digital diplomacy? If so, ask our chatbot!