The US Customs and Border Protection (CBP) announced that it will begin live testing of a blockchain-based shipment tracking system. The move, intended to verify NAFTA and CAFTA certificates of origin, will begin this month.
In the test, the CBP will reportedly combine two separate systems: the CPB’s legacy application and a blockchain-powered platform developed by the agency’s parent body — and the country’s primary border control organization — the Department of Homeland Security (DHS).
The test results will determine how the distributed ledger technology (DLT) is able to enhance the verification process of certificates of origin from the partners of the North American Free Trade Agreement and the Central America Free Trade Agreement, as well as reduce the time-consuming procedure of the resubmission of shipping data.
By using blockchain for the NAFTA and CAFTA certificates of origin, CBP intends to allow the agency to apply the technology toward getting more accurate information about the subject goods from the country of export and toward verifying that suppliers in other countries are compliant along with their U.S. importers.
CBP Commissioner Kevin McAleenan said CBP is working with private sector partners and the Department of Homeland Security Science and Technology Directorate on what should be the “interoperability standard” for blockchain.
“Blockchain is not one thing,” McAleenan said. “Everybody is looking at it from their perspective, from their ecosystem, if you will, from their business model. So there’s a lot of different blockchains. They’re looking at it in different ways. Some are simply trying to ensure the providence of that transaction from the beginning; you can see it later in the chain. Others are trying to add data that can ride on the blockchain and share more data on the shipment.”
While testing, the agency also intends to establish standards of interaction between different blockchains in order to ensure that all firms and software will be easily connected to customs without the need for additional customization.
Vincent Annunziato, director of CBP’s Transformation & Innovation Division, commented that at the moment various blockchain platforms are not compatible enough, stressing that ensuring data security is “of the upmost [sic] importance.”
What’s more, as the US government continues in its efforts to integrate blockchain in the trade compliance arena, it still remains to be seen how seamlessly the technology can be applied across CBP’s 47 partner government agencies.
“Data without borders,” a fundamental principle of blockchain technology, “sounds good if you’re only looking at shipping, but you have to take into account that we have importation entry data coming in, and we have 47 [CBP partner] agencies … that aren’t just going to give up their sovereignty of their laws and their rules,” Annunziato said. “So it’s a very interesting time right now, but I think it’s a good time for the government to be involved because we’re starting to really push forward and make sure things are honest and working the way they’re supposed to.”
The CBP is also reportedly developing a proof-of-concept scheme for dealing with intellectual property rights. Annunziato stressed that the successful testing of the blockchain project will enable consumers to define if a certain product is authentic or not.
Such blockchain uses could help with trade facilitation, as the licensor has “already told me [the licensee has] a right to bring that in,” Annunziato said. “We can do stuff with dates, we can make sure everything’s valid, so there’s a lot of potential in that.”
CBP also is considering whether an app might be built to help it look at trademarks. As an example, Annunziato mentioned a purchase of a Louis Vuitton bag and using the app to verify the authenticity of the bag and to further examine its physical properties.
“I can even go in and say, ‘Hey, I need a little information on the stitching,’ or, ‘I need information on what colors are viable,’” he said. “CBP might have a 150-page guide on granular physical information associated with that bag’s IP, for example, but an app could potentially streamline the manual process for gathering that information, Annunziato said.
CBP is considering whether officers could utilize such an app for IP examination purposes, said Annunziato.
The DHS had previously announced at it is preparing to implement blockchain technology in securing the sharing and storage of data collected by security cameras, sensors, and internal databases in early 2017, in a move to prevent manipulation of data and potential hacking attacks on devices operating on the borders and airports.
For more information about the CBP Blockchain test, contact your Alba Representative.
- Posted by ALBA Wheels
- On October 1, 2018
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