Trade Compliance

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U.S. Customs Exploring Potential Blockchain Use

Posted November 13, 2017


The Commercial Customs Operations Advisory Committee (COAC) has announced that U.S. Customs and Border Protection plans to initiate a proof of concept and/or pilot project in FY 2018 to look into the implications and potential application of blockchain technology in the customs environment.

CBP believes that blockchain presents “intriguing possibilities” and may have benefits relevant to the agency including: no central authority needed to reconcile the ledger; parties in the transaction do not have to trust each other; and immutability of records after reconciliation.

However, in view of the “wide gap between the hype and the reality,” the Department of Homeland Security says it needs to prove if security and privacy controls can be supported or enabled by blockchain and “whether the benefits of adopting the technology outweigh the pain of incorporating it into a proven information technology environment.”

Facilitating the effort, an emerging technologies subcommittee within COAC was established in September and has already engaged with roughly 80 fellow stakeholders at an invitation-only workshop in Washington last month, hosted by the DHS Science and Technology Directorate. At the two-day event, participants collaborated in the development of criteria for proposed use cases, identified various ideas and then prioritized the top candidates for further investigation.

Based on criteria such as the potential use case relating to an existing business process having measurable baselines and a defined data model, the working group identified 14 practical scenarios for study including capturing and keeping track of partnering government agencies licenses, permits, certificate of origin reporting and free trade agreement product qualifications, carnets and bonded movement tracking.

According to the COAC statement, the group is “now looking into these cases and determining through workflow processes to determine how this would be deployed with blockchain technology.”