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Report highlights potential for AI and blockchain in customs systems

25/10/18

Mark Say Managing Editor

The technology exists to automate the majority of administration needed in support of international trade after Brexit, according to a report by a company that supports govtech start-ups.

Container ship

Public has highlighted the potential for technologies such as AI and blockchain in its Frictionless Trade report, which looks at how technology will support different elements of international trade.

One section focuses on customs, which is seen as one of the biggest problems for the UK post-Brexit, especially in the event of there not being a deal with the EU.

It points to the importance of HM Revenue & Customs’ (HMRC) new Customs Declaration Service (CDS), which is due to replace the Customs Handling of Import and Export Freight (CHIEF) system next year, and warns this may not be sufficient to deal with the large increase in customs declarations. Even when it is introduced there will be an extra administrative burden for traders, compounded by complications around rules of origin for goods.

The report says this creates an opportunity to use blockchain technology to track rules of origin, calculate tariffs and execute payments on a smart contract – although it adds that customs policy must change before this becomes a reality.

It also says that the Border Force and HMRC could use AI to obtain insights from customs declarations and automated tracking technology to intercept suspicious consignments away from the frontier. This could help to overcome the threat of turning motorways into lorry parks when the ports hit capacity.

Prediction and intervention

The report adds that the vast amount of data to be collected by CDS will provide an opportunity for smart prediction and intervention, likening it to the use of AI in government to recognise patterns in vast datasets.

“By applying artificial intelligence to the hundreds of millions of customs declarations processed each year, there is clearly scope for a system to flag up suspicious activity or irregularities that require further human intervention,” it says.

Public points to the activities of some small companies in the field: legaltech firm Luminance has provided software to review thousands of contracts against the legal ramifications of Brexit; and a collaboration between local chamber of commerce Business West and IT consultancy i2i Infinity has already processed the first European certificate of origin through blockchain.

The report also looks at the potential for technology in ship operations, cargo operations, commercial processes, port management and border and port security, and takes a generally optimistic view of the prospects for the UK tech sector and trade.

“The UK has the opportunity to establish itself as a genuine world leader in technology enabled trade,” it says. “Not only will this help us to overcome some of the potential trading and customs challenges post-Brexit, but will be crucial for the future of the UK as a prosperous, forward-thinking economy.”

Image by lotsemann, CC BY 2.0 through flickr

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