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Blockchain-based Customs Clearance and Origin Certification

Sector: Tertiary sector · Industry: Postal, parcel and courier services · Organisation: U.S. Customs and Border Protection (CBP) · Maturity level: Pilot

The U.S. Customs and Border Protection (CBP) is testing blockchain technology for secure and efficient management of customs data and certificates of origin. The focus is on NAFTA/CAFTA certifications and protection against counterfeit products in imports. A pilot project for testing blockchain for certificates of origin in international trade has been running since September 2018.

Documentation status

Description

U.S. CBP (Customs and Border Protection) tested blockchain-based automation of customs declarations in a proof-of-concept. Focus: protecting intellectual property on imports through blockchain-secured brand licence proofs.

In 2023, CBP seized counterfeit imports with a market value (MSRP) of 2.76 billion USD. The fundamental problem: counterfeit customs declarations are hard to detect because documents are paper-based and easily forged. CBP PoC: importers upload brand licence certificates, certificates of origin, and trade documents onto a blockchain. At border control, the CBP officer scans the shipment’s QR code and immediately receives the full blockchain-verified document status. Smart contracts can automatically trigger alerts if the declared origin of goods does not match the blockchain-secured supply chain. Ledger Insights reported on the CBP pilot for IP protection. Blockchainwelt and Unlock Blockchain documented the PoC as part of the US free trade digitalisation programme. The EU Customs Reform (target date 2028) pursues similar goals for European customs authorities.

Perspectives

B2B — organisations perspective

Importers and customs brokers can submit blockchain-secured trade documents in advance, trigger customs clearances automatically, and provide seamless proof of IP compliance — resulting in fewer delays and less manual intervention.

B2C — consumers perspective

End customers benefit indirectly from faster delivery times for international orders and increased protection against counterfeit products. Improved customs clearance can also contribute to more stable prices.

Employees perspective

Customs officers can work more efficiently as blockchain technology automatically verifies the authenticity of documents. Staff in logistics companies have to spend less time on manual document checks and can focus on value-adding activities.

Benefits

General

B2B — organisations

B2C — consumers

Employees

Challenges

General

B2B — organisations

Employees

Technology foundation

Blockchain technology enables immutable and transparent documentation of customs data and certificates of origin between different trade partners. Through decentralized storage, manufacturers, traders, rights holders and importers can communicate securely and authenticate documents.

Implementation examples

CBP blockchain pilot for certificates of origin

CBP wanted to digitise the traditionally paper-based and time-consuming customs clearance process and make it more secure. The main goal was to reduce fraud and increase efficiency in processing trade documents.

In September 2018, CBP launched a pilot test using blockchain for NAFTA certificates of origin. Additionally, a proof-of-concept for intellectual property protection was completed.

Since September 2018, U.S. Customs and Border Protection has been conducting a comprehensive pilot for blockchain-based processing of certificates of origin. The pilot focuses on NAFTA and CAFTA certifications and tests how blockchain can improve the efficiency and security of customs clearance. In parallel, a separate proof-of-concept for intellectual property protection was successfully completed, demonstrating how blockchain can enable secure communication between manufacturers, traders, rights holders, and importers.

The solution addresses the issues of counterfeit certificates of origin and inefficient manual document verification. Additionally, the challenge of secure communication between various actors in the international supply chain was solved.

Tags

Customs clearance, Certificates of origin, Trade documentation, Anti-counterfeiting, Border processing

Sources

  1. U.S. Customs and Border Protection Einsatz der Blockchain für den Freihandel
  2. Blockchain intellectual property protection US Customs
  3. Blockchain pilot test US Customs
  4. USA Customs Border Protection implements PoC for intellectual property