US Customs to use blockchain technology

Origin Calculation | | MIC Customs Solutions |

Blockchain is to be rolled out as part of the US customs process.

It has been revealed that the US Customs and Border Protection (CBP) is to use blockchain technology to streamline the importing process and bring the industry in line with 21st century technology.

According to American Shipper, 'live fire testing' will begin of blockchain for use in the verification of North American Free Trade Agreement and Central American Free Trade Agreement certificates.

It will be in place to certify that imported goods really do originate from the country of export, as well as to ensure suppliers are compliant with customs and tax regulations.

A pilot is being run ahead of an official launch in September, which CBP Division of Business Transformation and Innovation head Vincent Annunziato said should boost market adoption across the globe.

Furthermore, the management of blockchain will be possible in a mobile app, meaning current paper-based processes could be phased out in the years to come.

CBP is also working on a 'proof-of-concept exercise' whereby blockchain could be used to verify intellectual property between IP licensees and licensors, something that could reduce incidents of lawsuits for copyright theft and similar incidents.

The ultimate goal is to eliminate paper-based process for the entire US customs industry.

An "interoperability standard" for blockchain

During a symposium for industry delegates in the US, CBP commissioner Kevin McAleenan said the organization is working with the Department of Homeland Security and private sector partners to develop an "interoperability standard" for blockchain that would see it able to be used across the globe.

Blockchain is defined as "an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value", according to Don and Alex Tapscott, who wrote Blockchain Revolution in 2016.

It is akin to a spreadsheet that is duplicated across a network of computers, but is also designed to be regularly and independently updated.

Information held on a blockchain therefore exists as a shared database that is truly public and easily verifiable, but, importantly, it has no single point of failure, cannot be controlled by a single entity and is extremely difficult to hack.

It may be that blockchain becomes an increasingly dominant feature of worldwide customs processes in the years to come.