How Data and Emerging Technologies Shape The Future Of Customs

Knowledge Sharing; Capacity Building

How will the future of Customs administrations look like in a few years? Which data and technologies can Customs deploy, and how?

This week I spent a day at the World Customs Organization Knowledge Academy. It’s an event where WCO members from across the world come together to share knowledge. They learn about the art of the possible, and gain learnings that they can bring back to their agencies in their countries. In this case, the discussion focused on the use of data and technologies by Customs. I find such international Customs events fascinating and challenging as a speaker because the audience is very varied. Speakers and presentations must be interesting for attendees coming from very diverse backgrounds. Attendees from different countries differ in terms of the types of Customs risks, characteristics of trade, level of IT sophistication and available budgets.

In this blog I will share some insights from this day

IBM Masters The Art Of Blockchain

Judging by the amount of questions that his talk generated, the presentation of Stewart Jeacocke from IBM’s Global Government Center of Competence was very popular. Stewart gave an overview of what Blockchain is, and what the characteristics of the technology are. He explained why characteristics such as immutability make Blockchain so suitable in the context of global trade, and offered several examples for use cases that have been implemented already. For example, food safety, fighting trade in blood diamonds and facilitating the process around phytosanitary certificates upon export of avocados from Africa to Europe. Finally he also talked about IBM’s Joint Venture with MAERSK to tackle the issue of (lacking) supply chain visibility in global trade by using Blockchain technology. This topic is close to my heart, as I’ve been involved in it in different roles since 2006 (before Blockchain technology was available). Having worked on such initiatives for many years, I have a very clear opinion about this initiative. In my view this joint venture has big potential, if… there’s one “if”. Do you want to learn more about my views on this initiative? Contact me directly for advice.

Drones: Risk and Opportunity

Subsequently, Debika Pal from the Argonne National Laboratory stretched people’s imagination in her insightful and very interesting presentation about drones, a.k.a. Unmanned Aerial Vehicles (UAVs). Drones are autonomous or remote-controlled aircrafts. The team controlling the drones may be thousands of miles away from the drones themselves. While most people think that drones are a recent invention, drones have been recognized by the Missile Technology Control Regime (MTCR) already more than two decades ago. Yet back then the underlying topic was nuclear weapons, while today drones are used for very different purposes.

UAVs, or Drones, are an interesting topic also because they pose both a threat and an opportunity for Customs and Border agencies.

Drones: The Opportunity

Drones are deployed by Government agencies for various use cases to support Government operations. For example:

Traffic control
Sending materials for rescue missions in hard-to-reach environments
Border surveillance
Detecting potential terrorist activity in football stadiums or other crowded locations.

Drones: The Risk

Similarly, criminals and terrorists also use drones for their purposes. Some examples are:

Criminals use drones to drop drugs in prisons (example)
There have been reports about ISIS planning to use drones to drop bombs in crowded locations
Smugglers are using drones to smuggle drugs and other products across borders
There are other quite severe risks that I’d rather not mention in an online blog, to avoid that anyone gets crazy ideas. It can get scary.

Drones: What Should Customs Look For

Debika then described the various types of drones, and explained which characteristics of drones Customs officers should be worried about mostly in their risk assessment and inspection (especially in the context of Weapons of Mass Destruction, WMD). I won’t provide the details here, as I do not want to make this information available online for those who would use it for illegal purposes.

Virtual and Augmented Reality At Dutch Customs

Chahid Azarkan from the Dutch Customs innovation group gave a fascinating presentation about augmented reality (AR), and how Dutch Customs has been deploying augmented reality technology. A video clip was presented showing Dutch Customs officers training in a (virtual) hostile environment while wearing technology that simulated the hostile environment for training purposes. Chahid also discussed the use case of Customs inspection officers using AR technology to enhance their capabilities when performing physical inspections. My personal view is that this scenario is very feasible, and in fact I wrote about it just a few days ago in another blog post with the title “The Internet Of Thinking: A Frictionless And Intelligent World”.

Information-Based Customs Operations: Data Quality Is The Critical Success Factor

My presentation was about data. Namely, all these technologies require data in order to be of any use. And while Customs administrations have a lot of data (yet not enough) about companies (importers, exporters) in their own countries, they have insufficient data about traders from other countries. Doing risk assessment with insufficient data is sub-optimal.

In the following sub-sections I list key elements in the presentation.

Data Quality

Data of bad quality is worse than not having data. Customs needs high quality data for risk assessment purpose. But maintaining qualitative data is a challenging task. Every single hour there is a substantial number of updates in the state of companies (address change, director change, legal proceedings, ownership change etc). Thus Customs administrations are unable to follow these changes. Luckily, this is the core business process of companies such as Altares Dun & Bradstreet. Rich company data is available about traders worldwide. You can no longer say “this shipment is high risk because we have no information about the trader”. We have the information.

Start Small, Think Big

Advanced solutions are attractive to tech-savvy administrations. Think about bringing together digital systems and biological systems. This is referred to as “the 4^th industrial revolution”. Yet other much more simple solutions exist as “off the shelf” products, allowing Customs to detect risks in cargo shipments, as well as to de-risk legitimate trade of traders that are less known to Customs. I discussed a series of very concrete examples. If you’re interested in an in-depth discussion on this topic, contact me directly.

Referential Matching Is the Solution For Master Data Management

Master Data Management is a critical underlying capability, because Customs works in a very connected environment (Government agencies exchange information with other agencies) and because Customs has many information sources, and typically many IT systems. The ability to create a helicopter view on a single trader is critical. The main technique used to achieve this goal is referential matching.

Concluding Remarks: The Future Of Customs Is Technology- And Data-Based

While Customs controls flow of cargo (physical objects), a major part of this task is processing information for the purpose of making decisions about how to handle the shipments. In most countries, the majority of trade is legitimate. Only a small percentage of the trade activity is illegal. Therefore Customs administrations will transform more and more into advanced IT organizations, as has also happened in other industries (consider banks, for example). Technologies fuelled by high quality data is the key to successful information-based and risk-based Customs operations. This is the case for Blockchain, Drones, Artificial Intelligence (AI), Internet of Things (IoT, which includes drones but is broader than just drones), Augmented and Virtual Reality and other technologies.

The future is here. This is not science fiction. These are all available solutions, and the speed of evolution in technology keeps increasing. Are you joining the future?

How Data, Digital and Emerging Technologies Shape The Future Of Customs