The European Union has moved to close a long-standing loophole that allowed hundreds of millions of cheap parcels to enter the bloc duty-free, introducing a new €3 customs charge on small packages and ending a tariff exemption that critics say has devastated European retailers.

Under the so-called "de minimis" rule — a Latin term meaning "too small to matter" — consumers could purchase up to €150 worth of goods from outside the EU without paying any customs duties. From Wednesday, all such parcels will be subject to the new flat fee. The policy shift comes as the volume of low-value parcels entering the bloc has surged dramatically, more than quadrupling from 1.3 billion in 2022 to 5.9 billion in 2025. Roughly 90% of those packages originate in China, shipped through online platforms such as Shein and Temu, whose ultralow prices have placed intense pressure on European high-street retailers and small businesses.

EU officials cited not only economic concerns but serious safety failures. Research disclosed alongside the announcement found that 60% of online products imported from outside the bloc did not comply with EU law. Cosmetics and toys were flagged as particular hazards, with 65% of imports in both categories failing EU standards. Non-EU food supplements and professional safety equipment, including hard hats and reinforced footwear, also showed high rates of non-compliance. EU Justice Commissioner Michael McGrath said he was shocked by the dangers posed by some items entering through the de minimis route. Last month, EU regulators fined Temu €200 million for failing to prevent the sale of illegal and dangerous products, while Shein has faced separate fines in France totalling tens of millions of euros over misleading discounts and poor return policies.

France has gone further still at the national level, passing a law that will ban advertising by so-called "ultra-fast fashion" companies — a category specifically designed to target platforms like Shein, Temu and AliExpress — from 1 January. Influencers promoting these brands will also face fines. The legislation will additionally impose an environmental levy on products sold by such companies, rising to as much as €20 per item by 2030, capped at 50% of the pre-tax sale price. Retailers will be required to encourage consumers to repair and reuse clothing rather than discard it.

The broader EU customs reform is designed to level the playing field for European businesses, while also forcing non-EU retailers to navigate more complex customs declarations for every shipment. Shein appears to be adapting: it has opened pop-up stores in Hungary and launched a large distribution centre in Poland, moves that could help it partially sidestep the new charge. The €3 fee will also apply in Northern Ireland under post-Brexit trading arrangements, with revenues going to the UK Treasury. Britain itself has announced it will introduce similar duties on small parcels from October 2028 — welcomed by retailers, though many had hoped for action sooner.