CBP is evaluating blockchain for trade
cross-border digitization

CBP is evaluating blockchain for trade

The CBP is moving ahead with its evaluation of impacts and potential of blockchain for trade processes. A working group will look into how it can benefit trade security and efficiency.

In November 2017, US Customs and Border Protection (CBP) published its Trade Executive Summary which is issued by the Global Supply Chain Subcommittee of the Commercial Customs Operations Advisory Committee (COAC). 

In its mission to “advance priorities that promote trade facilitation, global customs modernization, and global supply chain security to enhance the competitiveness of American businesses,” the committee founded an Emerging Technologies Working Group in September 2017. 

This working group was tasked with monitoring and advising the COAC and CBP on issues related to new technologies and the advancement of existing technologies that will have an impact on trade. 

Now, the working group is currently looking into the applicability of blockchain for trade processing. The November publication provides updates on the progress made so far and what comes next. 

Essentially, a blockchain functions as a distributed ledger that records transactions in a verifiable and permanent way. Blockchain records are transparent to all who have access to the network but are decentralized across that network, making them virtually incorruptible. 

This security has made blockchain a promising technology for recording a wide range of activities, including customs and trade-related transactions. 

Since the founding of the COAC Emerging Technologies Working Group in September, the US Department of Homeland Security conducted a two-day workshop on blockchain. The first day introduced an overview of blockchain and how it is currently being used, and the second day included hands-on discussions among participants on the various cases where the use of this technology might be feasible. 

The group came up with 14 proposed use cases. They included ideas such as capturing and keeping track of partnering government agencies’ licenses, permits, certificate of origin reporting, free trade agreement product qualifications, carnets, and bonded movement tracking. 

Next, the working group will examine these cases in more detail to determine, based on workflows, how each case would be deployed with blockchain technology. A specific timeframe for the next milestone has not yet been announced.

According to media reports, companies and organizations in other parts of the world are also testing how blockchain may aid international trade flows, including tracking cargo containers, transferring shipping documents, and confirming cross-border payments – such as the recently founded "Blockchain in Trucking Alliance".

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