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Brussels Probes Temu For Breaches Of EU Compliance And Consumer Safety Risks

by THEFUTURE.TEAM
July 29, 2025

Overview Of The Regulatory Examination

Brussels has launched a rigorous inquiry into Temu, the rapidly expanding e-commerce platform, accusing it of breaching EU regulations by allowing illegal product listings. The European Commission alleges that Temu’s measures to assess and mitigate risks associated with hazardous and unauthorized goods on its marketplace were insufficient, thereby exposing EU consumers to potential harm.

EU Enforcement And Company Response

According to official statements, Temu is under intense scrutiny following an October risk assessment deemed overly generic and not customized for its specific platform dynamics. Internal audits and mystery shopping initiatives have revealed recurring issues, including counterfeit electronics and unregulated toys. These findings, reported by reliable sources such as The Financial Times and Reuters, have prompted the Commission to warn of fines reaching up to 6 percent of the company’s global annual revenue, should corrective measures not be promptly enacted. Temu has pledged full cooperation with the Commission as it addresses these concerns.

Heightened Consumer Safety Measures In Cyprus

In parallel, Cyprus’ Consumer Protection Service has intensified its oversight, notably publishing a list of recalled toys sold on Temu due to acute safety risks. Working in conjunction with the EU’s RAPEX system, the agency has urged consumers to verify the ‘product safety alerts’ on Temu’s website and discontinue the use of any flagged items. Despite these efforts, challenges remain as Temu lacks a comprehensive contact list of buyers, complicating direct notifications regarding product recalls.

Industry-Wide Implications And Related Investigations

The unfolding situation extends beyond Temu. Regulatory bodies in Cyprus and across the EU are also examining practices of similar platforms, such as Shein, amidst concerns over manipulative design features, algorithm transparency, and questionable data-sharing practices. The Cyprus Consumers Association has notably joined forces with multiple EU consumer organizations, filing complaints against Shein for employing so-called ‘dark patterns’ and contravening the European Directive on Unfair Commercial Practices.

Conclusion: Navigating A Complex Regulatory Landscape

The intensifying regulatory focus on Temu underscores the evolving challenges within the e-commerce industry. As the EU authorities continue to enforce strict compliance measures, platforms must recalibrate their risk management policies to safeguard consumer safety and uphold regulatory standards. The outcome of these investigations will not only shape the operational strategies of major e-commerce players but also set a precedent for consumer protection across the Union.

EU E-Commerce VAT Systems Generate €257.9 Million Revenue for Cyprus in 2024

by THEFUTURE.TEAM
August 11, 2025

Robust Revenue Growth Through Streamlined VAT Collection

Cyprus has demonstrated a significant fiscal boost in 2024 with €257.9 million generated from the European Union’s e-commerce VAT systems, according to Tax Commissioner Sotiris Markides. This impressive performance underscores the effectiveness of the One Stop Shop (OSS) and Import One Stop Shop (IOSS) frameworks in simplifying cross-border tax compliance.

Simplified Procedures for EU and Non-EU Businesses

The OSS system allows Cyprus-registered businesses to streamline VAT declaration and payment on sales to consumers in other EU countries. Companies simply register on the local OSS platform, apply the consumer’s VAT rate, aggregate their submissions quarterly or monthly, and remit a single consolidated payment. Subsequently, Cyprus allocates the appropriate share to each respective EU country. This efficient process extends to non-EU sellers as well, who can have their intra-EU distance sales managed under the Union Scheme.

Breakdown of VAT Revenue Streams

Last year’s declarations under the various schemes illustrate the system’s broad reach: €217.9 million was collected via the Union Scheme, €36.9 million through the Non-Union Scheme, and €3.1 million via the Import Scheme. While the Union Scheme caters to both EU and non-EU sellers engaging in distance sales, the Non-Union Scheme specifically accommodates non-EU firms delivering services to EU consumers. Furthermore, the Import Scheme targets goods valued at less than €150 that are imported from outside the EU.

Implications and Broader Impact

Implemented in July 2021 as an evolution from the more limited MOSS system, these reforms have not only consolidated tax collection through an expansive OSS but also integrated the IOSS for low-value imports. By designating certain online marketplaces as “deemed suppliers,” the new framework ensures that VAT collection is both efficient and equitable. Across the EU, these mechanisms have generated over €33 billion in VAT revenues in 2024, reflecting a successful effort to simplify tax compliance, reduce administrative burdens, and promote fair taxation across the bloc.

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