BRUSSELS — The European Commission is cracking down on two Chinese companies, airport scanner maker Nuctech and e-commerce giant Temu, that are suspected of unfairly penetrating the EU market with the help of state subsidies. The EU executive opened an in-depth probe into Nuctech under its Foreign Subsidies Regulation on Thursday, a year and a half after initial inspections at the company’s premises in Poland and the Netherlands. “The Commission has preliminary concerns that Nuctech may have been granted foreign subsidies that could distort the EU internal market,” the EU executive said in a press release.  Nuctech is a provider of threat detection systems including security and inspection scanners for airports, ports, or customs points in railways or roads located at borders, as well as the provision of related services.  EU officials worry that Nuctech may have received unfair support from China in tender contracts, prices and conditions that can’t be reasonably matched by other market players in the EU.  “We want a level playing field on the market for such [threat detection] systems, keeping fair opportunities for competitors, customers such as border authorities,” Executive Vice President Teresa Ribera said in a statement, noting that this is the first in-depth investigation launched by the Commission on its own initiative under the FSR regime.  Nuctech may need to offer commitments to address the Commission’s concerns at the end of the in-depth probe, which can also end in “redressive measures” or with a non-objection decision.   The FSR is aimed at making sure that companies operating in the EU market do so without receiving unfair support from foreign governments. In its first two years of enforcement, it has come under criticism for being cumbersome on companies and not delivering fast results.  In a statement, Nuctech acknowledged the Commission’s decision to open an in-depth investigation. “We respect the Commission’s role in ensuring fair and transparent market conditions within the European Union,” the company said. It said it would cooperate with the investigation: “We trust in the integrity and impartiality of the process and hope our actions will be evaluated on their merits.” TEMU RAIDED In a separate FSR probe, the Commission also made an unannounced inspection of Chinese e-commerce platform Temu.  “We can confirm that the Commission has carried out an unannounced inspection at the premises of a company active in the e-commerce sector in the EU, under the Foreign Subsidies Regulation,” an EU executive spokesperson said in an emailed statement on Thursday.   Temu’s Europe headquarters in Ireland were dawn-raided last week, a person familiar with Chinese business told POLITICO. Mlex first reported on the raids on Wednesday.  The platform has faced increased scrutiny in Brussels and across the EU. Most recently, it was accused of breaching the EU’s Digital Services Act by selling unsafe products, such as toys. The platform has also faced scrutiny around how it protects minors and uses age verification.  Temu did not respond to a request for comment.

The discussion surrounding the digital euro is strategically important to Europe. On Dec. 12, the EU finance ministers are aiming to agree on a general approach regarding the dossier. This sets out the European Council’s official position and thus represents a major political milestone for the European Council ahead of the trilogue negotiations. We want to be sure that, in this process, the project will be subject to critical analysis that is objective and nuanced and takes account of the long-term interests of Europe and its people. > We do not want the debate to fundamentally call the digital euro into question > but rather to refine the specific details in such a way that opportunities can > be seized. We regard the following points as particularly important: * maintaining European sovereignty at the customer interface; * avoiding a parallel infrastructure that inhibits innovation; and * safeguarding the stability of the financial markets by imposing clear holding limits. We do not want the debate to fundamentally call the digital euro into question but rather to refine the specific details in such a way that opportunities can be seized and, at the same time, risks can be avoided. Opportunities of the digital euro:  1. European resilience and sovereignty in payments processing: as a public-sector means of payment that is accepted across Europe, the digital euro can reduce reliance on non-European card systems and big-tech wallets, provided that a firmly European design is adopted and it is embedded in the existing structures of banks and savings banks and can thus be directly linked to customers’ existing accounts. 2. Supplement to cash and private-sector digital payments: as a central bank digital currency, the digital euro can offer an additional, state-backed payment option, especially when it is held in a digital wallet and can also be used for e-commerce use cases (a compromise proposed by the European Parliament’s main rapporteur for the digital euro, Fernando Navarrete). This would further strengthen people’s freedom of choice in the payment sphere. 3. Catalyst for innovation in the European market: if integrated into banking apps and designed in accordance with the compromises proposed by Navarrete (see point 2), the digital euro can promote innovation in retail payments, support new European payment ecosystems, and simplify cross-border payments. > The burden of investment and the risk resulting from introducing the digital > euro will be disproportionately borne by banks and savings banks. Risks of the current configuration: 1. Risk of creating a gateway for US providers: in the configuration currently planned, the digital euro provides US and other non-European tech and payment companies with access to the customer interface, customer data and payment infrastructure without any of the regulatory obligations and costs that only European providers face. This goes against the objective of digital sovereignty. 2. State parallel infrastructures weaken the market and innovation: the European Central Bank (ECB) is planning not just two new sets of infrastructure but also its own product for end customers (through an app). An administrative body has neither the market experience nor the customer access that banks and payment providers do. At the same time, the ECB is removing the tried-and-tested allocation of roles between the central bank and private sector. Furthermore, the Eurosystem’s digital euro project will tie up urgently required development capacity for many years and thereby further exacerbate Europe’s competitive disadvantage. The burden of investment and the risk resulting from introducing the digital euro will be disproportionately borne by banks and savings banks. In any case, the banks and savings banks have already developed a European market solution, Wero, which is currently coming onto the market. The digital euro needs to strengthen rather than weaken this European-led payment method. 3. Risks for financial stability and lending: without clear holding limits, there is a risk of uncontrolled transfers of deposits from banks and savings banks into holdings of digital euros. Deposits are the backbone of lending; large-scale outflows would weaken both the funding of the real economy – especially small and medium-sized enterprises – and the stability of the system. Holding limits must therefore be based on usual payment needs and be subject to binding regulations. -------------------------------------------------------------------------------- Disclaimer POLITICAL ADVERTISEMENT * The sponsor is Bundesverband der Deutschen Volksbanken und Raiffeisenbanken e.V. , Schellingstraße 4, 10785 Berlin, Germany * The ultimate controlling entity is Bundesverband der Deutschen Volksbanken und Raiffeisenbanken e.V. , Schellingstraße 4, 10785 Berlin, Germany More information here.

BRUSSELS — The European Commission has sent a formal request for information to e-commerce site Shein after child-like sex dolls and weapons were sold on the platform. The Chinese platform has been suspended in France as of Nov. 5, after child-like sex dolls were found on the online shopping site. Later investigations also revealed weapons and other illegal products, leading to calls for the EU to step up its scrutiny. The Commission is the primary supervisor of Shein under its powerful Digital Services Act, the EU law designed to limit the risks of online platforms to users. Shein is classified as a Very Large Online Platform with over 45 million users. The Commission has the power under the DSA to initiate probes that can lead to fines of 6 percent of its annual global turnover, although none have been levied thus far. The request for information doesn’t signal the opening of an investigation, but it shows the Commission is looking into potential non-compliance. “The Commission is now formally asking the platform to provide detailed information and internal documents on how it ensures that minors are not exposed to age-inappropriate content, in particular through age assurance measures, as well as how it prevents the circulation of illegal products on its platform,” the EU executive said today. Shein did not immediately respond to a request for comment. The European Parliament is today expected to call for stricter protections for consumers under EU law in response to the child-like sex doll controversy. A Paris court was set to hear a case on Shein’s suspension in France today but that was delayed to Dec. 5. The French authorities are moving forward with investigations into two other platforms, AliExpress and Joom, minister of commerce Serge Papin said today. EBay, Temu and Wish are also under scrutiny in France.

LONDON — Britain’s man in Geneva is quietly trying to fix the global trading system — without angering President Donald Trump. As World Trade Organization (WTO) members stumble toward a long-anticipated reform effort, U.K. Ambassador Kumar Iyer is working to modernize the organization’s rulebook. Iyer’s vision for WTO reform ahead of its big biennial conference in March centers on shaking up the way the 30-year-old U.N. body enforces the rules of global trade. Speaking to POLITICO earlier this month, Iyer said he wants to have a system “where not everything is always held back by consensus and not everything requires everyone to agree […] and it’s not negatively impacting a range of countries.” Brussels has flirted with building an alternative “rules-based” trade order that would bring together the EU and the Indo-Pacific trade bloc that the U.K. joined last year — an alliance that sidelines Washington, long accused of paralyzing the WTO’s dispute system. Ministers representing the two trade blocs are meeting in Melbourne, Australia, this week for their first official joint dialogue. Kumar Iyer’s vision for WTO reform ahead of its big biennial conference in March centers on shaking up the way the 30-year-old U.N. body enforces the rules of global trade. | Martial Trezzini/EPA But Iyer is keen to downplay talk of an anti-Trump alliance. “We’re really comfortable with other countries having those [agreements],” he said. “But they’re not an alternative to the multilateral system.” ‘BUSINESSES’ FOCUS IS NOW ELSEWHERE’ Iyer’s frustration over attitudes towards the WTO is clear — especially with what he sees as corporate indifference toward the organization, leading to its deprioritization in global politics. “CEOs and corporate leaders have stopped looking towards the WTO as being on the forefront of global trade policy,” he said. “They’ll look at CPTPP […] — that’s where the board-level focus has gone, and that’s very understandable.” EU Commission President Ursula von der Leyen first floated the idea of a wider alliance with CPTPP members in June during EU trade talks with the U.S. She argued that the bloc could “show to the world that free trade with a large number of countries is possible on a rules-based foundation.”  Still, Iyer insists that no new alliances can replace the WTO — or its role as the foundation of the global trade system.  “No FTA is even possible without the WTO,” he said. “The WTO is the operating system, and FTAs are essentially the applications that sit on it. Saying you only need CPTPP is like saying I’ve got Microsoft Word and Excel, so I don’t need Windows.” With the WTO’s next ministerial conference fast approaching, officials are steeling themselves for bruising negotiations on several issues, ranging from e-commerce to agriculture and fisheries.  Washington, however, remains the main obstacle. The U.S. has for years blocked the appointment of new judges to the WTO’s top appeals court, effectively paralyzing one of its core functions in trade dispute settlement.  “This isn’t about coming out with a big bang change immediately,” Iyer said of the coming reform talks. “It’s about getting that political engagement around it and showing a real, genuine willingness.”

LILLE, France — France’s plan for winning the race to host a European customs watchdog has become clear: Set the pace for the bidding war. POLITICO was among 20 officials from all over Europe on a trip to the northern French city on Tuesday for an in-person look at Lille’s bid to host the new European Union Customs Authority. In what felt like a joyful school trip, visitors toured the agency’s office, where the authority’s future 250 employees would work — a state-of-the-art white building adjacent to the train station and Lille’s Flemish old town. They then took a stroll in the multilingual European school where future officials could send their kids. Invitees even got a guided tour of the city center and tasted local delicacies during a lunch that one of the attendees described as “the heaviest of my life.” Though other cities like Warsaw, Málaga and Porto have made their candidacies official, no other potential host has started this early and campaigned so hard to date (bids are due Nov. 27). France is also likely to benefit from the fact that it has taken a leading role in one of the most pressing issues facing customs authorities today: the flood of cheap goods from China. French officials this week launched a high-profile fight against Shein, moving to suspend the platform in France following allegations that the Chinese fast-fashion e-commerce giant was selling childlike sex dolls. Authorities also took the extraordinary step of inspecting more than 200,000 parcels from Shein that had arrived at Paris’ Charles de Gaulle Airport.  Official from allover the EU got a taste of French hospitality as they visited Lille. | Giorgio Leali/POLITICO France led the charge to tax purchases made on platforms like Shein, Temu and AliExpress by proposing a €2 levy on any small parcel worth more than €150 coming from outside the bloc. The EU is considering following suit. “The advantage of hosting the authority in Lille is also that France is the country that has realized the most the danger coming from Chinese e-commerce platforms,” said Socialist member of the European Parliament François Kalfon as he walked through Lille city center. Hosting the customs authority would create “a favorable ecosystem” to make sure that French activism on customs control turns into a European approach, he said.  Kalfon added, the fact that France already hosts several other European Union agencies — there are five on French soil, plus the European Parliament in Strasbourg — shouldn’t count against the bid. Lille has some geographic advantages compared to those other three cities officially in the running. It is just over 100 kilometers from Brussels, and well connected to many major airports and harbors — a key asset for an authority charged with monitoring customs data from all over the bloc to keep out unsafe and illicit products. Still, Paris is taking no chances after two recent stinging defeats in bids to host the bloc’s anti-money laundering authority and its medicines agency. France wants to host the future authority in a state-of-the-art new building next to Lille train station. | Giorgio Leali/POLITICO Laurent Saint-Martin, who recently served as both trade and budget minister for France, along with former WTO Director-General Pascal Lamy, are leading the bid. Saint-Martin told POLITICO while walking down the steps of what he hopes will be the future customs authority HQ that the key was to get out of the starting blocks early, reaching out to other countries and MEPs — even if the exact voting procedure hasn’t been settled on yet. Italy, Germany, the Netherlands, Bulgaria and Croatia could soon launch their own bids for hosting the customs authority, according to several officials with direct knowledge of their plans who were granted anonymity because they were not authorized to comment. And candidate countries are lobbying to host the it in chats with officials from EU member countries. But France’s decision to get the jump out of the gate appears to be bearing fruit. Several non-French officials on the trip, likewise granted anonymity to discuss an ongoing competitive bid without official authorization, said the were impressed by the bid. “This is the right moment,” one of them said. “The others are still a few steps behind.”

Listen on * Spotify * Apple Music * Amazon Music Europe faces a growing dilemma: how to protect children online without breaking digital privacy for everyone.  A new report from the Internet Watch Foundation found that 62 percent of all child sexual abuse material discovered online last year was hosted on EU servers. It’s a shocking statistic that has left Brussels locked in a heated debate over how far new regulations should go — and whether scanning encrypted messages could be justified, even at the cost of privacy and the risk of mass surveillance.  Host Sarah Wheaton is joined by POLITICO’s Sam Clark, Eliza Gkritsi and Océane Herrero to unpack Europe’s child safety regulations — and the balance between protecting kids, protecting privacy and policing platforms. The conversation also touches on the latest controversy out of France, involving Shein — the fast-fashion giant caught selling childlike sex dolls online.   Then, from Europe’s digital dilemmas to Albania’s digital experiment: Gordon Repinski, host of POLITICO’s Berlin Playbook podcast, sits down with Albanian Prime Minister Edi Rama, who has appointed the world’s first artificial intelligence minister — a virtual woman named Diella. Rama explains why he believes Diella could help fight corruption, cut bureaucracy and speed up Albania’s path toward EU membership. 

PARIS — Economy Minister Roland Lescure warned Monday he could stop Shein from selling its products of France after a consumer watchdog report accused the Chinese-founded fast-fashion platform of selling “sex dolls with childlike appearances.” “For terrorist acts, drug trafficking and child pornography, the government has the right to request banning access to the French market,” Lescure said. “These horrible items are illegal.” Over the weekend, France’s Directorate-General for Competition, Consumer Affairs and Fraud Control (DGCCRF) issued a statement alleging that it had “found that the e-commerce site SHEIN was selling child-like sex dolls.” “Their description and categorization on the site leave little doubt as to the child pornographic nature of the content,” the statement added. Shein did not immediately respond to POLITICO’s request for comment. Lescure said that he had filed a legal report on this matter and asked France’s digital regulator Arcom, which is responsible for regulating “very large” platforms like Shein under the European Digital Services Act, to look into the matter. France’s High Commissioner for Youth, Sarah El-Haïry, said Sunday that she would convene “all major platforms” to understand how such products are put on the market. In 2021, then-Economy Minister Bruno Le Maire order popular search engines and mobile app stores to delist another online marketplace, Wish, after several reports from the DGCCRF. Wish was reauthorized a year later. This article was first published by POLITICO in French and translated by Victor Goury-Laffont.

PARIS — Le ministre de l’Economie a menacé Shein d’interdiction en France si l’enquête judiciaire montrait que les comportements de la plateforme de fast-fashion sont “répétés”. Roland Lescure était interrogé ce matin sur BFM TV après que la direction générale de la Concurrence, de la Consommation et de la Répression des fraudes (DGCCRF) a découvert, vendredi 31 octobre, que la plateforme proposait à la vente des poupées sexuelles à l’effigie d’enfants. L’administration avait alors immédiatement saisi le procureur de la République et l’Arcom. “Pour des actes terroristes, pour le trafic de stupéfiants et pour des objets pédopornographiques, le gouvernement est en droit de demander l’interdiction de l’accès au marché français”, a ajouté le ministre de l’Economie. “Ces objets horribles sont illégaux”, a rappelé Roland Lescure, ajoutant avoir saisi la justice et l’Arcom, qui est compétente en la matière puisque Shein a été désignée l’an passée comme très grande plateforme en ligne (VLOP) dans le cadre du règlement européen sur les services numériques (DSA). La haut-commissaire à l’Enfance, Sarah El-Haïry, a pour sa part annoncé dimanche son intention de convoquer “l’ensemble des grandes plateformes” pour comprendre le circuit de commercialisation de ces produits. En 2021, le site de vente en ligne Wish avait fait l’objet de mesures de déréférencement à la demande de Bruno Le Maire, alors ministre de l’Economie. Après plusieurs enquêtes de la DGCCRF sur la sécurité des produits proposés par la plateforme, les principaux gestionnaires de moteurs de recherche et les magasins d’applications mobiles avaient été appelés à dérérencer Wish, avant que le site ne soit finalement à nouveau autorisé un an plus tard. Contacté par POLITICO, Shein n’a pas donné suite au moment de la publication.

PARIS — France’s consumer protection agency has reported Chinese-founded online fast-fashion platform Shein over the sale of childlike sex dolls. “The French Directorate-General for Competition, Consumer Affairs, and Fraud Control (DGCCRF) found that the e-commerce site Shein was selling sex dolls with childlike appearances,” the agency said Saturday evening, adding that it had “referred the matter to the public prosecutor.” Shein is accused in France and beyond of selling goods that do not comply with EU laws. In July, the DGCCRF fined the company €40 million for misleading consumers about prices. Back in May, the European Commission and consumer protection authorities had also notified the platform of alleged violations of consumer protection law, including fake discounts and misleading sustainability claims. EU Justice Commissioner Michael McGrath later said he was determined to crack down on the sale of goods on Temu and Shein that do not comply with EU regulations. “As a reminder, the distribution of child pornography via an electronic communications network is punishable by up to seven years’ imprisonment and a fine of €100,000,” the French DGCCRF said in Saturday’s statement. The agency also reached out to the French platform regulator Arcom, which is responsible for regulating companies such as Shein. The platform was ordered to take appropriate measures swiftly. Shein told Agence France-Presse the items have been removed from the platform and an investigation was launched to find out how the sellers managed to circumvent the control processes. The DGCCRF also reported to the prosecutor and Arcom that pornographic content such as adult-looking sex dolls is available without filtering measures to restrict access to minors, which is also against French law. Shein is especially controversial in France: The most recent incident is the platform’s arrival at the flagship department store BHV in Paris, which sparked outrage among suppliers.

Russia’s military drills may be over, but Poland isn’t relaxing — and has decided to keep its border with Belarus closed indefinitely, severing a €25-billion-a-year trade artery between China and the EU. Warsaw closed its border with Belarus on Friday to better monitor the large-scale Russian-Belarusian “Zapad” exercise. But what was billed as a temporary precaution now looks open-ended, with the government citing “concern for the safety of Polish citizens” and adding that “traffic will be restored once the border is fully safe.” The move comes at a moment of high diplomatic tension, after Russia last week tested Poland’s defenses by sending a drone swarm into its air space and amid increasing diplomatic pressure from U.S. President Donald Trump to punish China for helping the Kremlin’s war effort in Ukraine. Poland’s government said the “logic of trade” was being replaced by the “logic of security.” Crucially, the shutdown hits a trade route that moves 90 percent of rail freight between China and the EU. On that route, cargo volumes between China and the EU grew 10.6 percent in 2024, while the value of goods jumped nearly 85 percent to €25.07 billion. The corridor now accounts for 3.7 percent of all EU-China trade, up from 2.1 percent a year earlier — a lifeline for e-commerce giants like Temu and Shein. Polish firms might also take a hit. State-controlled PKP Cargo said short delays could be managed but warned that a prolonged closure would divert trade south, through Kazakhstan, the Caspian and Black Sea and on to Southern Europe or Turkey. The closure comes just a week after the company launched its first Warsaw–China freight train, carrying goods from several European countries — a symbolic run meant to cement Poland’s role as a hub and raise PKP Cargo’s international profile. “The complete border closure is a crucial problem — not only for transport and logistics but for the whole economy,” said Artur Kalisiak, strategic projects director at the Transport & Logistics Poland industry association. Some 10,000 Belarusian drivers employed by Polish transport firms are also stuck, he added — unable to return to work in Poland, or even get back home. All cargo is currently blocked, including time-sensitive shipments like medicine and food. As for alternatives, “you can try via Lithuania or Latvia, but that of course takes more time and more money. And even then, there’s no guarantee those borders will stay open,” he said. Belarusian opposition outlet Belsat reported on attempts to improvise new supply chains, saying a workaround had been created whereby a loaded truck heads to a terminal in Lithuania’s Kaunas, Poland’s Łódź or Germany’s Duisburg — from where cargo is shifted and then enters Belarus through Lithuanian rail crossings. “It’s a very difficult situation,” Kalisiak concluded. “The government says it is monitoring the situation and that the border will be reopened when it is safe. This is what we know … so, from a business perspective, we know nothing.” | Jaap Arriens/NurPhoto via Getty Images “The decision to close the border with Belarus will remain in force until further notice. Further steps on the matter are yet to be decided,” Polish government spokesman Adam Szłapka confirmed to reporters on Wednesday. With no reopening date in sight, businesses have no clear word on whether they will be compensated. “Losses will be assessed once we know how long the border will have been closed. At that point, the ministries will be able to prepare an assessment, which will serve as the basis for the government’s decisions on possible state support for individual industrial sectors,” the interior ministry said. POLITICAL CHESS Chinese Foreign Minister Wang Yi flew into Warsaw on Monday to talk with his Polish counterpart, Radosław Sikorski. “It was made very clear during the talks that in this situation, the logic of trade, which is also beneficial for us, is being replaced by the logic of security. And that was expressed very clearly by Minister Sikorski,” Polish foreign ministry spokesperson Paweł Wroński said. He added that the Chinese side had made no direct demands to reopen the border. Beijing had already said before the ministers met that it hoped Poland would “take effective measures to ensure the safe and smooth operation of the [rail link on the Belarus border] and the stability of international industrial and supply chains,” stressing that the China-Europe Railway Express was a “flagship project” in China’s cooperation with both Poland and the EU. But China isn’t the only player in the game. “There is also the United States, and we have a very close relationship with them. I’m quite sure Washington is more than happy to see the routes closed — at least temporarily — because they have been pressuring the European Union to introduce additional tariffs on China over Russian oil and gas exports to China,” said Piotr Krawczyk, former head of Poland’s Foreign Intelligence Agency. “I believe they are pleased that instead of tariffs, the main land gateway for Chinese goods is now blocked for a while,” he added. “I’m also quite sure the Americans are smiling and supporting the Polish government in not rushing to reopen it — at least not very soon.” Europe is also at the table, but as Krawczyk noted, “I haven’t seen any reaction from any country — nothing from the Commission and nothing from the capitals. So maybe Europe as well is not unhappy to see the main gateway blocked.” “If this gateway is blocked, then they have to use other routes — for example, air transport or maritime transport … I think, for instance, the ports in Rotterdam and Hamburg would be very happy to receive those goods that can no longer pass through the Polish-Belarusian border,” he added. As for China’s position, Konrad Popławski, an economist at the Warsaw-based Center for Eastern Studies — a government advisory think tank — said the sums at stake are significant, but not game-changing. The closure matters more for China’s inland western provinces, he added, which rely heavily on rail links and lack access to seaports. “Still, we are not talking about vast volumes of trade — it is more of a steady trickle important to some industries, but by no means critical overall.” “The big question is whether the border closure poses a problem of sufficient magnitude — not only for Belarus and Russia, but perhaps also for China — to compel any bigger reaction,” Popławski concluded. But while the value of trade flowing through the Polish-Belarusian border is substantial, he noted, it’s still not large enough to push Beijing to shift its stance on Moscow or Minsk.