The Department of Homeland Security reports that it has awarded a contract to a Texas company to develop a proof-of-concept application for U.S. Customs and Border Protection on using blockchain to process imports of raw materials such as steel, timber, and diamonds.

A DHS press release states that the department’s Science and Technology Directorate is exploring the application of blockchain to issue credentials digitally to enhance security, ensure interoperability, and prevent forgery and counterfeiting. In the upcoming project the company will adapt its core technology product that leverages centralized and decentralized identity infrastructures to secure individual agency identities and verifiable credentials to ensure that CBP has visibility into the provenance, traceability, and regulatory compliance of raw material imports.

CBP has already tested the use of blockchain for the certifications of origin used to qualify goods for preferential treatment under NAFTA and CAFTA-DR, and a second test focusing on intellectual property rights was scheduled for September. Other planned proof-of-concept tests are expected to address purchase order to entry (combining shipping and entry data, reverse engineering the entry/entry summary processes to remove dependency on the HTSUS, etc.) and tracking oil shipments from spigot to importation. Click here for more details.

For more information on the use of blockchain in trade and customs processes, please contact customs attorney Lenny Feldman at (305) 894-1011.

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