As cross-border e-commerce continues to rise, an expert at Asian Vision Institute (AVI) said Cambodia’s postal and customs procedures need to be updated to include Electronic Advance Data (EAD), a system that sends customs and security information before the arrival of a package to the destination country.
Sok Kha, a research fellow at the Centre for Governance Innovation and Democracy (CGID) at AVI, argued that if Cambodia does not adopt EAD, it may risk having packages returned.
Sok added action must be taken soon, because the European Union, the United States, China and Russia are some of the countries that now require EAD.
“The enforcement [of EAD] implies that Cambodia’s postal shipments to the markets in those countries risk being returned or destroyed by their customs administrations as per their respective regulation,” he said.
The EU-Import Control System came into effect last month while the US Stop Act took effect in January this year.
“As a workaround, Cambodia needs to enable the EAD, allowing advanced data exchange of critical customs and security information of the postal shipment electronically between the Customs Declaration System (CDS) of Cambodia Post and ASYCUDA World (AW) of the General Department of Customs and Excise of Cambodia (GDCE),” Sok said.
AW is the current customs system in place by the GDCE and is responsible for processing customs declaration data at ports and checkpoints in Cambodia.
The problem, he said, is that communication between CDS and AW is not sufficient.
Sok listed three reasons why this switch would benefit Cambodia. “First, it ensures regulatory compliance of the outbound postal shipments to EAD countries. Second, the rapid growth in cross-border commerce e-commerce puts increasing pressure on [the] GDCE. Third, it contributes to progressing Cambodia’s commitments under Article 7.1 on the Pre-Arrival Processing and Article 7.4 on Risk Management of the WTO Trade Facilitation Agreement.”
He added the dramatic rise in Cambodia’s e-commerce sector provides more reason to implement EAD.
According to a Statista report, e-commerce revenue is slated to grow annually at 8.98 percent from 2021 to 2025.
“The e-commerce turnout is expanding beyond Cambodia’s national border, with small Cambodian e-traders engaging mostly with the international delivery of small packages,” Sok said.
He added Express Mail Service packages accounted for 47 percent of Cambodia Post’s revenue in 2019. This represented an increase of volume by about 43 percent for outbound packages and 38 percent for inbound packages in 2017.
This article first appeared in the Khmer Times’ Business Issue: April 27, 2021.