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2018 Government Innovation Awards

A better way to track trade?

Customs and Border Protection is looking for more efficient ways to track goods coming into the United States, and blockchain could be part of the answer. During a live three-week test in September, CBP officials saw firsthand how the distributed ledger technology could improve the certificate process for goods coming in via North American Free Trade Agreement and Central America Free Trade Agreement partners.

International Trade Blockchain Proof of Concept

Customs and Border Protection

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The proof of concept was developed with CBP’s trade partners on the Commercial Customs Operations Advisory Committee. Through the NAFTA and CAFTA agreements, partners have agreed to supply certificate data upfront. That information is then compared to CBP’s legacy system and a separate blockchain-based system designed by the Department of Homeland Security’s Science and Technology Directorate.

“With the proof of concept, we are not just checking if the system works,” said Vincent Annunziato, director of CBP’s Business Transformation and Innovation Division. “We are looking at a complete legal, regulatory, technical and operational framework that needs to be put around moving into this new technology.”

A key consideration is interoperability. The companies involved use different types of software for blockchain implementations, so the project is testing how the frameworks communicate with one another.

Annunziato said blockchain technology could reduce the need for documentation requests and cut down on the amount of direct communication. However, “this is just initial testing to determine if it works and if blockchain is useful,” he added. “We need to have specific use cases that work properly with the technology before you start investing in it.”

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