In today’s interconnected world, the expansion of international trade presents exciting opportunities for ecommerce businesses to grow globally. However, crossing borders comes with complexities, regulations, and potential risks that require careful attention. That’s where compliance comes in – staying current and adhering to global trade regulations is not only a legal obligation, but also a strategic necessity that can have crucial effects on a brand’s reputation, profitability, and competitiveness. In this article, we’ll discuss the significance of trade compliance and how it sets the foundation for a successful international business plan, along with keeping you informed about recent regulation updates.
What Is Trade Compliance?
Trade compliance refers to the process of following the laws, regulations, and customs requirements that govern international trade.
For ecommerce brands, this can include:
- Import and export regulations
- Product eligibility requirements
- Customs documentation
- Duties and taxes
- VAT and GST obligations
- Product classification
- Country-specific shipping restrictions
While compliance requirements vary by market, the goal remains the same: ensuring products move across borders smoothly and legally.
Why Trade Compliance Matters for Global Ecommerce Brands
Trade compliance is often viewed as a regulatory requirement, but for ecommerce brands, it is also a critical part of operational performance. A strong compliance strategy helps businesses move goods across borders more efficiently while reducing risk and creating a better customer experience.
Reduces Shipping Delays and Customs Issues
Accurate product classifications, customs documentation, and country-of-origin data help reduce the likelihood of customs holds, shipment delays, and unexpected clearance issues. As international order volume grows, even small compliance errors can create significant operational disruptions.
Supports a Better Customer Experience
Unexpected duties, taxes, or customs-related delays can quickly erode customer trust. By maintaining strong compliance processes and accurate landed-cost calculations, brands can create more predictable delivery experiences and greater transparency around international shipping costs.
Helps Brands Scale Into New Markets
Every country has its own import regulations, tax requirements, restricted product rules, and customs procedures. Brands that invest in trade compliance are better positioned to expand internationally without constantly reacting to regulatory challenges.
For example, understanding changes such as the EU’s upcoming low-value import reforms or evolving VAT requirements can help businesses prepare before new rules impact operations.
Read more about the EU de minimis tariff exemption and EU VAT compliance for ecommerce brands.
Creates Operational Stability
Cross-border commerce is constantly evolving. Tariffs, trade agreements, customs requirements, and import regulations can all change with little notice. Businesses that monitor these developments and maintain compliant processes are generally better equipped to adapt without disrupting fulfillment operations or customer experience.
For brands selling internationally, staying informed about global trade developments is becoming increasingly important. Follow the latest policy changes, tariffs, and international trade developments with Passport’s Trump Trade Tracker.
Important Global Trade Updates Ecommerce Brands Should Know
Navigating the complexities of cross-border trade isn’t easy, especially with ever-evolving rules and regulations. That’s why partnering with an international solutions provider like Passport® with in-house compliance experts is essential to ensure your company’s long-term success in the global marketplace. Our team is constantly monitoring regulatory developments to help brands become and stay compliant.
Here are recent updates brands should be aware of:
European Union (EU)
Beginning July 1, 2026, the European Union will phase out the €150 duty de minimis exemption for ecommerce imports. As part of the reform, low-value shipments entering the EU may become subject to new flat-rate customs duties, handling fees, and expanded customs reporting requirements.
Read more in our EU customs development guide
United Kingdom (UK)
The UK Border Force has recently stepped up enforcement of value-added tax (VAT) laws by holding low-value shipments that do not have a UK VAT ID and even requiring merchants to provide a recent tax return demonstrating compliance. For orders under £135, ecommerce merchants are required to collect the 20% VAT at checkout and remit it quarterly to HMRC.
Norway (NO)
As of January 2024, Norway has eliminated the VAT de minimis threshold, which was previously set at NOK 350 (~$38 USD), meaning VAT is now levied on all imported products, regardless of their value.
See our Norway VAT guide
Singapore (SG)
Singapore (SG) – Singapore’s standard VAT rate increased from 8% to 9% starting in January 2024.
See our Singapore GST guide
Switzerland (CH)
Switzerland’s standard VAT rate increased from 7.7% to 8.1% starting in January 2024.
Australia (AU) and New Zealand (NZ)
Tax authorities in Australia and New Zealand have recently cracked down on goods and services tax (GST) registration for ecommerce transactions.
In Australia, when merchants sell over $75,000 AUD (~$53,851 USD) worth of products into AU within a 12-month period, they must register for a tax ID and collect the 10% GST at checkout from their customers.
In New Zealand, when merchants sell over $60,000 NZD (~$35,550 USD) worth of products into NZ within a 12-month period, they must register for a tax ID and collect the 15% GST at checkout from their customers.
How Passport Helps Brands Navigate Global Compliance
Embracing the significance of trade compliance is an indispensable foundation for businesses aiming to thrive in the dynamic world of global ecommerce.Passport’s team of licensed customs brokers and trade advisors is ready to guide you through the complexities of compliance in international markets.
We’re dedicated to offering brands support in determining product eligibility, properly classifying products, providing accurate goods descriptions, complying with local tax requirements, and keeping you informed of relevant regulation updates.
To further support your international growth, Passport Global™ offers an all-in-one solution that simplifies compliance and cross-border shipping. Our service combines personalized advisory with technology-driven strategies to ensure your products not only comply with international regulations but also appeal to global markets using localization tools. With Passport Global, navigating the complexities of global trade becomes seamless, allowing you to focus on growing your business.
Reach out to our team today to see how Passport can simplify your journey towards international success.
Authored by Thomas Taggart
Head of Global Trade | Passport
Thomas Taggart is a cross-border commerce leader with more than 20 years of experience in international shipping and regulatory affairs. As the Head of Global Trade, Thomas helps ecommerce brands go global by simplifying international trade, tax, and product compliance issues. Prior to Passport, he brought international shipping solutions to market through multiple roles in UPS’s product development organization.
Frequently Asked Questions
What is trade compliance in ecommerce?
Trade compliance refers to following international shipping laws, customs requirements, tax regulations, and import/export rules when selling products across borders.
Why is trade compliance important for ecommerce brands?
Strong compliance practices help brands reduce customs delays, improve international delivery experiences, minimize operational disruptions, and expand into new markets more efficiently.
What are VAT and GST requirements?
Many countries require ecommerce merchants to collect value-added tax (VAT) or goods and services tax (GST) on international orders once certain sales thresholds are reached.
What is ICS2 in the European Union?
ICS2 is the EU’s updated import control system that requires carriers to submit shipment data electronically before goods arrive in the region.
What happens if a brand is not compliant with customs regulations?
Non-compliance can lead to shipment delays, customs holds, additional fees, fines, or restricted access to certain international markets.
How can Passport help with international compliance?
Passport helps ecommerce brands navigate customs regulations, taxes, product classification, and global shipping requirements through a combination of compliance expertise and cross-border logistics technology.
Who is the importer of record (IOR) for DTC ecommerce shipments?
In many consumer parcel shipments, the end customer is the default importer of record. If a merchant elects to act as the importer (or uses a model where the merchant is listed as importer), the merchant generally takes on additional compliance, payment, and liability responsibilities.
How do I determine the correct customs value for ecommerce orders?
Customs value is typically based on the transaction value of the goods, but the rules vary by country and can be affected by discounts, shipping/insurance, and certain fees. Incorrect valuation is a common cause of customs holds, penalties, and VAT issues.
What is “country of origin,” and why does it matter?
Country of origin is where the product is considered manufactured under customs rules—not where it ships from. It impacts duty rates, eligibility for trade agreements, labeling requirements, and whether extra restrictions apply.
What are restricted or prohibited items, and how do brands manage them?
Restricted goods can include cosmetics, supplements, batteries, food, and products with certain ingredients or claims. Compliance may require special labeling, documentation, or carrier/service changes; prohibited items can be refused or seized at the border.
How do returns work for international orders—and do duties/taxes get refunded?
Return processes vary by destination and shipping model. In some cases, customers may be eligible to reclaim duties/taxes, but it often requires specific paperwork and timelines. A clear returns strategy helps reduce disputes and support costs.
What is HS code classification and what happens if it’s wrong?
HS codes determine duty rates and admissibility. Misclassification can trigger delays, re-assessments, fines, and inconsistent landed cost estimates—especially at scale across multiple markets.
How do de minimis thresholds affect duty/tax exposure for ecommerce shipments?
De minimis thresholds set the value under which duty and/or tax may not apply. They vary by country and can change over time; shifts (like the EU’s upcoming reforms) can materially impact landed cost and shipping strategy.
