Challenges and Opportunities of

Cross-Border E-commerce
A Framework for Policy and Roadmap
 There is no single agreed definition and/or use
of the term e-commerce and what it
comprises

WTO, its individual Members, international

organizations, business entities and other
Definition of relevant stakeholders
formulations.
using different

E-commerce When it comes to forums concerned with

cross-border trade, two definitions are
commonly used. These are the definition of the
WTO work program on e-commerce and the
definition of the Organisation for Economic
Co-operation and Development (OECD).
 The production, distribution, marketing, sale,
or delivery of goods and services by
electronic means.

WTO
Production Distribution Marketing

Definition of Sale Delivery

E-Commerce
Electronic
Goods Services
means
 An e-commerce transaction is the sale or
purchase of goods or services, conducted
over computer networks by methods
specifically designed for the purpose of
OECD receiving or placing of orders. The goods or
services are ordered by those methods, but
Definition of the payment and the ultimate delivery of the
goods or services do not have to be conducted
E-commerce online. An e-commerce transaction can be
between enterprises, households, individuals,
governments, and other public or private
organisations
OECD, 2011, p. 72
Barriers in Tariff Barriers Non-tariff Barriers
Trade
Guiding Principles for eCommerce Policy Making
Global National
▪ WTO Agreements, Rules ▪ Export Policy
▪ Plurilateral Trade Agreements ▪ Import Policy
▪ Bi-lateral Trade Agreements ▪ Tariff Documents
▪ International Conventions ▪ Customs Procedure
▪ Other ▪ Shipping
▪ Consumer Protection Act
▪ Other
 WTO Laws and
their Relevance
with E-Commerce
Policy Elements in Line with WTO Framework

WTO Work Program Moratorium on Tariff till 2023

▪ Launched by Geneva ▪ Moratorium on imposing

Ministerial Conference 1998 Customs Duties on electronic
transmissions
▪ Called for a comprehensive
work programme on trade
related aspects of global e-
commerce
 Policy Issues Related to Goods

Market access for and access to

Standards related Issues
products related to e-commerce

Customs valuation Rules of origin issues

Import Licensing Classification issues

Customs Duties and other duties and

charges
Policy Issues Related to e-Commerce in Services
Increasing
Scope including Most favored participation of
Transparency
modes of supply nation treatment developing
countries

Protection of
Domestic Competition privacy and public Market access
regulation issues morale and the commitment
prevention of fraud

National Annex on Classification

Customs duties
treatment telecommunications issues
 Policy Issues Related to IPR

Protection and
Protection and New technologies and
enforcement of
enforcement of access to
copyrights and
trademarks technologies
related rights
Policy Issues Related to Trade and Development

Use of information
Effects on economic and
technology in
trade prospects of Ways to enhance
participation of
developing countries, participation of
developing countries into
especially on small and developing countries
the multilateral trading
medium enterprises
system

The possible impact on

traditional means of
Financial implications
distribution of physical
goods
Cross-border E-commerce Policy Journey

Policy Research Policy Advocacy Policy Document

Policy
Development Preparation of
Policy Action Plan
Strategic Policy Draft
Meetings

Thriving Cross-
Stakeholder Cross-country border
Policy Workshop Learning Ecommerce
Sector
 Policy Stakeholder Mapping

Logistics Tax Money Assurance

Ministry of Finance Ministry of Commerce
MoPT: Postal NBR
ICT Division
Department Financial Institutions
Division Ministry of Foreign Affairs
BIDA eCommerce Cell
Bangladesh Bank
Export Promotion Bureau

NBR: Customs Tariff Commission IDRA Department of Consumer

Rights protection
BSTI
Competition Financial Institutions
Department of Patent, Designs
Commission and Trademarks
Insurance Companies
Logistics Companies Dispute Settlement Body:
Chambers DFSP and Fintech Bangladesh International
Arbitration Centre

Merchants | Marketplaces | Ministry of Commerce | eCommerce Cell | eCAB | Chambers of Commerce and Associations | Thinktanks
Areas for Mapping Readiness and Gaps

Logistics Tax Money Assurance

Customs Valuation Standards related

Shipping Payment Issues
Classification of goods Consumer rights
protection
Warehousing Rules of Origin Financing
Data Protection
Customs Duties
Prevention of
Return Policy Income tax Insurance Fraudulence

Other Duties and Dispute Settlement

Customs Charges
Exchange Rate
Processing Double taxation IPR
Logistics
 Logistics: Shipping
Readiness Challenges Solutions
Export and Import Export and Import
Wide range of product orders from one customer Limiting the number of products for a single order of a
- Products sourced from different places customer
- Products coming at different times - Better cost management
- Bringing in multiple costs under one order - Better supply chain management

Export Export Export

Country-wide logistics Middle mile issues with shipping Strengthening the logistics infrastructure
infrastructure - Digital transformation and enabling product
- Yet to be strengthened tracking (ensuring declaration on value)
for both public and - Collaboration among public and private entities
private entities - Separate SOP for cross-border e-commerce, with
separate and realistic timeline
- Managing by one common web platform (owned by
government or private sector)
 Logistics: Shipping
Readiness Challenges Solutions
Export and Import Export and Import
The operational procedure of cross-border e- Defining the operational procedure with clear
commerce is yet to be clearly defined in the distinction of consumer goods and
regulations.
Export
For B2C trading through platforms, LC or
Purchase order is required
- LC requires higher units of trade
- PO requires a buyer to be on the other side
Export
SMEs preparedness
- Knowledge of product
- Market localization
 Logistics: Warehousing
Readiness Challenges Solutions
Export Export
Bangladesh is not a hub Direct flight to the nearest hubs, or hub at or near
- Shipment through third party carrier Bangladesh
- Freight forwarder and Shipping rate is high - Cost and time competitiveness will be better
- Time of delivery gets prolonged - Easy access to the hub of neighboring
countries
- Bonded warehouses (Less duty)
Export and Import Export and Import
Nationwide pickup and delivery network is yet to Utilizing nationwide warehouse network of Post
reach optimization Office
- Post Offices will be used as drop points for the
SMEs
 Logistics: Return Policy
Readiness Challenges Solutions
Export Export
International customers look for options Strong and connected infrastructure for return
which offer return and refund policy and refund policies
- Infrastructural support needs to be - Clear definition of refundable products, refund
built procedure, payment refunding process
 Logistics: Customs Processing
Readiness Challenges Solutions
Export and Import Export and Import
Treatment of assorted items and bulk items are not Setting up a separate e-commerce cell
separate - Segregation of assorted items and traditional bulk
- Being asked to send within a master box exports and imports (Customs declaration)
- Bill of entry for every products in a master box - Less documentation requirement for consumer
- Individual consumer goods treated with the same goods
process - Uniform bill of entry for all products in a master
box and flexibility with the application of de minimis
Export and Import Export and Import
Management of various modes of cross-border trade Introducing a platform to bring all cross-border e-
- Drop shipping commerce trade related processing under one roof
- B2B
- B2C
- POD
Export and Import Export and Import
Definition of cross-border products do not include Revising the definition of cross-border products
digital product, intellectual property, service/good from
NRBs, souvenirs, products of art etc.
Tax
 Tax: Tariff
Readiness Challenges Solutions
Export and Import Export and Import
Dealing with multiple countries' various strategies Entering into understanding with different countries
- Two-way merchant and consumer-friendly de
minimis partnership
- Setting up strategies for different countries, with
variations in the policy
- Fixing on rates based on the type and the
competitiveness of the products
 Tax: Income Tax
Readiness Challenges Solutions
Import Import
Individual consumers having to pay different taxes Normalize TTI and raising de minimis cap, for e-
and charges, through a complex procedure of Total commerce shoppers, and reducing AIT for single
Tax Incidence, even though they are importing for product purchase
non-business purposes

Import Import
Product-wise taxation burdens the individual Setting an allowable value cap for consumer
consumers purchases and values higher than the threshold
should face a certain rate or ranges of rates
 Tax: Other Taxes
Readiness Challenges Solutions
Export Export
Benefit of government facilities are not extended to Extending government benefits to the small
single product exporting small exporters exporters as well
Import Import
Consumers not receiving the benefits of buying Cap of USD 100 per shopper of e-commerce
through F-commerce (or applying a percentage), where the shopper
will not be charged for any taxes or fees
Import Import
Consumers not having a clear estimation about the Clear definition and charges for consumer
landed cost of the purchased product products
Export and Import
Clear classification of products and definition
of charges exempted products
 Tax: Double Taxation
Readiness Challenges Solutions
Export and Import Export and Import
Treatment of returned and refunded products Defining the return and refund procedure and no
- Outbound returns as exports taxation on returned or refunded products
- Inbound returns as imports
Money
 Money: Payment
Readiness Challenges Solutions
Import Import Import
International payment For marketplaces, COD entails remitting Remitting payment in a structured manner by
- Payment gateway money on behalf of the customers. This enabling both payment gateway (commonly
- International credit card. process is yet to be acknowledged by any used gateways) and cash on delivery options
- Cash on delivery, policy
Export Export
International customers would prefer the Allowing access to common payment gateways
availability of common payment gateways for the exporters with receive payment from
(exporters and freelancers)
- Payment gateway that is widely
acceptable, can deal with multiple
currencies, and is cost-friendly
- Restriction on use of earned dollar
Export Export
Sanction screening Integration with existing law
**Whitelist from BFIU> Proactive screening by
FIs. For others, screening for the first payment
Export and Import
Definition of e-commerce export and import
 Money: Payment
Readiness Challenges Solutions
Import
Restriction on not collecting more than 10% advance payment
burdens the importers to pay the full amount and bear the risk
of non-receipt of product by the customer
Export Export
Verification of international customers by requiring their NID Simplification of payment procedure where
information may discourage the customers verification can be done through ensuring the
credibility of the cards
Import Import
No payment regulation for marketplace to cross-border seller Marketplace can remit through bank, on behalf
on behalf of customer (For COD, Not integrated with of customers (like Airlines)
international payment gateway) - Proof of delivery receipt to be submitted
(Customer acknowledgement and tracking)
Export Export
- Too many documentary obligation (work order) - Settlement account
- Parking account
- Integration as per SOP (time of product,
e.g., non-commercial)
 Money: Financing
Readiness Challenges Solutions
Export Export
New businesses facing problem to avail Connecting UBID with different operational
financial services for exporting data and allowing businesses to present those
data to avail financial services
 Money: Insurance
Readiness Challenges Solutions
Export Export
Exporters need to be insured against the product Enabling insurance system for exporters and
they are exporting.. making the terms exporter-friendly.
Export Export
Insurance of particular product is looked for Gross insurance value
- Inactive check, what is the value
 Money: Exchange Rate
Readiness Challenges Solutions
Import Import
Focusing only on importing by an e-commerce Restricting imports to 30% of overall business
business may hamper the foreign exchange policy of turnover, or not more than 35% of Gross
the government. Merchandising Value, instead of an amount such as
USD 10000,so that the policies are more affordable
for the businesses.

Export and Import

Variation in currency preference and exchange rates
could be a possible complexity
Assurance
 Assurance: Quality Assurance
Readiness Challenges Solutions
Export Export
Due to mistrust about quality, the platforms Central complain management system
have to avail escrows for trading, and escrows connected to site and social media ratings
disrupt the cashflow of business
- No real time transaction

Export and Import Export and Import Export and Import

Return and scrapable products Customer cannot return products, as the A clear system for returning products, with
are not defined and recognized product might be considered as export, and proper documentation and ensuring that the
currently vice versa. products are not considered as exports and
imports, and not charging any fees/taxes for
those returns.
Export Export
Understanding and knowledge on the target Conducting market assessment studies,
market lacks depth and requiring the merchants to conduct a
basic assessment
 Assurance: Quality Assurance
Readiness Challenges Solutions
Export and Import Export and Import
Local and International consumers have lost - Affiliation with international marketplaces
trust on the local e-commerce sites, because and foreign embassies could endorse the
of the fear of fraudulence quality of the local sites.
- Marketplaces need to have a well-defined
criteria/ framework for assessing and
onboarding partners
Export and Import Export and Import
Present quality assurance system - Randomly conducting quality checks for
is yet to ensure the quality of products being exported by defining the
products in an efficient manner process and the parties
- Quality check process for cross-border
e-commerce needs to be defined
Export and Import
Inviting companies which specializes or
will specialize in QC
Assurance: Consumer Rights Protection
Readiness Challenges Solutions
Export and Import Export and Import
Fraudulence in quality, delivery and - Central Complaint Management System
transaction of products - Fraud prevention by Consumer Rights
Protection Department of GoB
 Assurance: Data Protection
Readiness Challenges Solutions
Export and Import Export and Import
- Integration with Data Security and Privacy Definitive policy for e-commerce data, where the
Regulations authorized type of data and authority of data
- Implementation of data privacy guidelines are need to identified, where the minimum required
not clear data will also be defined.
- Protection of consumer data shared through
order placement, payments and transactions
- Requirement of data and authorization on use of
data
Export and Import Export and Import
Customers have lost trust on the e-commerce Building trust with the customers with data-
industry and are not comfortable in sharing their backed researches
data with the platforms
Export and Import Export and Import
Data for e-commerce trade are not stored E-commerce data to be maintained and identified
separately at Bangladesh Bank or Export separately by relevant parties, and segregation
Promotion Bureau of data at port
Assurance: Prevention of Fraudulence
Readiness Challenges Solutions
Export and Import Export and Import
Fraudulence in quality, delivery and transaction - Central Complaint Management System
of products - Fraud prevention by Consumer Rights
Protection Department of GoB
 Assurance: Dispute Settlement
Readiness Challenges Solutions
Assurance: Intellectual Property Rights
Readiness Challenges Solutions
 Export and Import

Definitions related to cross-border e- Relax taxation on single customers

1 commerce and its operations 5 and products

Business ID representation of
2 Digitization of logistical structure for
better trackability 6 merchants (Single ID)

Separate storage and processing cell for Process of return and refund to be
3 e-commerce products and data 7 defined and simplified

Revise classification of products and

4 Setting up hubs in different countries 8 applicable charges
 Pathways of Policy Making
Particulars Digital Formal Informal Print

▪ Twitter snippets ▪ Policy ▪ Meeting the ▪ One-pager to

▪ Social Media: Conference Champions [One- Four-pager
Facebook, ▪ Policy Meetings on-one] documents
Channel LinkedIn with ▪ WhatsApp ▪ Newspaper
▪ e-Cab Website Stakeholders

▪ Infographics: ▪ Policy snippet to ▪ Articles

Static and champions ▪ Write-ups on
Content Dynamic individual
categories for
key stakeholders
Thank You