Blockchain for trade certificate management
- By Sara Friedman
- Aug 24, 2018
Customs and Border Protection will begin a "live-fire testing" of blockchain to verify certificates of origin from the North American Free Trade Agreement and the Central America Free Trade Agreement partners.
To experiment with the technology, CBP is running two separate systems -- the agency’s legacy application and a blockchain-based system developed by the Department of Homeland Security’s Science and Technology Directorate -- to see how the distributed ledger technology works with verifying free trade agreements. (The blockchain-based effort is a 2018 Government Innovation Award winner.)
“Our operators are able to look at those [records] supplied through the new system and the system of record and see the differences,” Vincent Annunziato, director of CBP’s Transformation & Innovation Division, said on a press call.
Blockchain could eliminate the resubmission of shipping information and streamline communications, Annunziato said: “If the data is supplied upfront, the operators don’t have to go out ask for the data again.”
He said the blockchain-based system would also allow CBP to investigate where shipments are coming from and see the country of origin. Once the testing is completed, Annunziato’s division will work on an assessment of the work with trade partners.
“Once we prove it out, we have to tell the agency [leadership] what we recommend, and it is the agency’s decision on how to move forward,” Annunziato said. “This is just initial testing to determine if it works and if blockchain is useful.”
The certificates of origin proof of concept is being run on a private blockchain where all users can see who is getting a NAFTA or CAFTA certificate, but they are not privy to details on company's clientele.
Another aspect of the test is creating interoperability between the different blockchains that companies are running.
"We are trying to set up standards by which all of the companies and software can communicate to Customs without having to build out specialized nodes and a whole lot of customization,” Annunziato said. “Security is of the upmost importance," but right now the blockchain platforms can’t easily communicate, he said.
CBP is also working with DHS S&T to develop standards for blockchain interoperability.
Additionally, the agency is working on a proof of concept dealing with intellectual property rights to identify IP licensees and licensors.
“The IPR piece is interesting because we are looking at pulling the consumer in to get an authentication that a product is legitimate,” Annunziato said. “When we develop a blockchain, we will be able to develop a certain level where a consumer could determine if something is authentic.”
CBP is also working with Factom and DHS S&T on another blockchain project that would ensure data coming from sensors and cameras on the border has not been intercepted. The project is currently undergoing a six-month field test in Texas.
Sara Friedman is a reporter/producer for GCN, covering cloud, cybersecurity and a wide range of other public-sector IT topics.
Before joining GCN, Friedman was a reporter for Gambling Compliance, where she covered state issues related to casinos, lotteries and fantasy sports. She has also written for Communications Daily and Washington Internet Daily on state telecom and cloud computing. Friedman is a graduate of Ithaca College, where she studied journalism, politics and international communications.
Friedman can be contacted at firstname.lastname@example.org or follow her on Twitter @SaraEFriedman.
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