CBP Releases Results of NAFTA/CAFTA Blockchain Test; Trade Participants Say Efficiencies Not There

Most participants in CBP's Proof of Concept (POC) for blockchain using NAFTA and CAFTA certificates of origin reported general approval for the technology while noting some new redundancies created, CBP said in a newly released assessment. The assessment, dated Nov. 28, 2018, was released after allowing the Commercial Customs Operations Advisory Committee to review the document during its Feb. 27 meeting (see 1812060007). The test "produced critical feedback as well, coming most evidently from the trade community," CBP said. "Unlike other respondents, those from the trade indicated that the POC did not increase the efficiency of their workflow."

Participants from CBP had the most praise for the program "chiefly due to the POC’s ability to facilitate the auditing process," the agency said. Other recurring praise for the POC included its ability to "expedite communication and eliminate the use of paper documents, physical signatures, and potentially CBP Form 28."

During the fall of 2018, 30 participants from CBP, trade and technology backgrounds took part in the test. "The goal was to prove that a standards-based, fully digital system could be created to replace the existing paper-based system," CBP said. "The system would enable better auditability, expedite the evaluation of free trade agreement eligibility, and increase NAFTA/CAFTA transparency, and more clearly identify suppliers and manufacturers. It would also allow the trade community to implement and administer their own evidence systems, sharing certain required documentation with CBP only."

Notable benefits of the blockchain process mentioned by CBP participants included the embedding of "statements in the initial entry summary and streamlined requests for information which would normally require CBP personnel to complete CBP Form 28 and notify the importer of the outcome of an action using CBP Form 29," the agency said. While some believed this could eliminate the need for CF 28s, that "idea was not universal among respondents," it said.

No members of the trade mentioned the embedded statements or CF 28s and 29s as an advantage of blockchain, CBP said. Some trade "respondents did question the ability to eliminate CBP Form 28 for legal reasons and the ability to view previous versions of the Certificate of Origin while using blockchain, which users are currently able to do," the agency said. "There was also an expressed interest in including 'the appropriate policy offices' in the process so as to have the upgrade to blockchain not be derailed by internal regulations."

Blockchain could have operational benefits to help in the auditing process, according to CBP. "Test participants from CBP also reported that the POC has the potential to reduce operational costs by reducing travel costs for auditors, reducing inquiry response wait time, and reducing the need to print paper copies of requests," the agency said. There's also the potential to end physical signature requirements in some places, it said.

Overall, there seemed to be less enthusiasm within the trade. "Members of the trade mentioned that the POC does not save them work and does not improve efficiency because it creates redundancies within the filing process," CBP said. "Respondents also mentioned that the POC required them to input data they were not previously required to input for NAFTA/CAFTA evidence." The test would also have benefited by including exporters, the trade said.

Email ITTNews@warren-news.com for a copy of the assessment.