Blockchain For Certificate Tracking To Be Trialled By US Customs And Border Protection

Blockchain, Innovation, News | August 20, 2018 By:

The US Customs and Border Protection (CBP) will be conducting a blockchain pilot next month to verify North American Free Trade Agreement (NAFTA) and Central American Free Trade Agreement (CAFTA) certificates.

CBP is the largest federal law enforcement agency of the United States Department of Homeland Security, and is the country’s primary border control organization. It is charged with regulating and facilitating international trade, collecting import duties, and enforcing US regulations, including trade, customs, and immigration.

Speaking at CBP’s 2018 Trade Symposium in Atlanta last week, CBP Business Transformation and Innovation Division Director Vincent Annunziato said that the agency will start “live fire testing” blockchain functionality in September to ensure that foreign entities are living up the rules put in place by NAFTA and CAFTA.

“Really what the government’s trying to do is twofold: One is to help blockchain along in a healthy manner for increasing market adoption, and the other thing is we’re trying to prepare ourselves in a proactive way to be ready for when private industry begins to really take off with this technology,” Annunziato said.

Annunziato added that they are hoping that blockchain will allow the CBP to gather more accurate information about the subject goods from the country of export and verify that suppliers in other countries are compliant along with their US importers. If the technology gets the buy-in from all players, which include CBP’s 47 partner government agencies, Annunziato said it could lead to paperless borders.

“Data without borders 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 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.”

In September 2017, the Commercial Customs Operations Advisory Committee (COAC) formed a working group to research the application of blockchain to the CBP’s trade functions. Annunziato said that the group is now working on a proof-of-concept to explore the use of blockchain in the intellectual property environment to identify IP licensees and licensors.

“So if you have a rights holder that is granting licenses to Company A, and then did they also grant the right for Company A to license out? You can now follow generationally what’s going on, Annunziato said. “So in a way the government’s got a view of that interaction with the company, and we see it as a worthwhile venture for the rights holders. Such blockchain uses could help with trade facilitation, as the licensor has already told me [the licensee has] a right to bring that in. We can do stuff with dates, we can make sure everything’s valid, so there’s a lot of potential in that.”