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Pilot Test of Blockchain for NAFTA/CAFTA-DR Certifications to Go Live in September

Friday, August 17, 2018
Sandler, Travis & Rosenberg Trade Report

U.S. Customs and Border Protection is planning to launch in September a pilot test of the use of blockchain technology for the certifications of origin used to qualify goods for preferential treatment under NAFTA and CAFTA-DR. According to an American Shipper article, CBP Business Transformation and Innovation Division Director Vincent Annunziato told the annual Trade Symposium this week that the agency is seeking to “help blockchain along in a healthy manner for increasing market adoption” as well as to “prepare ourselves in a proactive way to be ready for when private industry begins to really take off with this technology.”

A blockchain essentially functions as a distributed ledger that records transactions in a verifiable and permanent way. Blockchain records are transparent to all who have access to the network (though specific documents in those records, such as certificates of origin, are not) but are decentralized across that network, making them virtually incorruptible. This security has made blockchain a promising technology for recording a wide range of activities, including customs and trade-related transactions.

CBP’s Commercial Customs Operations Advisory Committee has established a working group to examine blockchain’s potential uses. In addition, companies and organizations around the world are testing how blockchain may aid international trade flows, including tracking cargo containers, transferring shipping documents, and confirming cross-border payments.

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