Blockchain to help Customs Authorities improve transparency and data quality
The application of blockchain and distributed ledger technology (DLT) in the customs industry has been touted as a potential game-changer that could enhance transparency, immutability, accessibility, and data quality. With the creation of a tamper-proof and decentralized system, blockchain solutions have the potential to increase efficiency and reduce fraud and errors in the customs process. However, despite the numerous advantages offered by blockchain technology, the implementation of such solutions faces significant challenges that must be addressed.
The primary challenge that needs to be overcome is the lack of expertise and good practices, along with the associated costs. Many customs authorities and other stakeholders lack the necessary skills and knowledge to effectively implement blockchain solutions. To address this issue, investment is needed to provide training and education to build the skills and expertise required to successfully deploy and manage blockchain systems. This investment will help ensure that stakeholders can leverage the technology’s benefits fully, enabling them to create more efficient and effective customs processes.
Another significant hurdle that needs to be addressed to facilitate the widespread adoption of blockchain in customs processes is the need for standardized datasets. Currently, there are limited widely available standardized datasets used by both government agencies and authorized economic operators. The lack of standardization leads to the appearance of inefficient governance systems and a proliferation of different blockchain solutions that are not interconnected. Standardizing datasets could help overcome this issue by allowing for seamless data sharing between stakeholders and facilitating the development of a shared blockchain ecosystem.
Despite these challenges, there are already examples of successful implementation of blockchain in the customs industry. For instance, the Port of Rotterdam Authority in the Netherlands has launched a blockchain-based platform that allows for the real-time sharing of cargo information between stakeholders. The platform has been successful in improving supply chain efficiency and reducing fraud and errors in the customs process.
The application of blockchain and DLT in the customs industry has the potential to bring significant benefits to stakeholders. However, to realize these benefits, stakeholders must address the challenges associated with implementing blockchain solutions, such as the lack of expertise and good practices, the associated costs, and the need for standardized datasets. With investment in training and education, standardization of datasets, and a commitment to interoperability, the customs industry can leverage the power of blockchain and DLT to create more efficient and effective customs processes.
