U. S. Customs and Border Protection will begin its live testing of a shipment tracking system on a blockchain after Labor Day, an agency official said.

As previously reported, CBP plans to trial blockchain technology in a “live fire testing” as part of an effort to eliminate paperwork in verifying North American Free Trade Agreement (NAFTA) and Central American Free Trade Agreement (CAFTA) certificates. On Friday, Division of Business Transformation and Innovation head Vincent Annunziato told CoinDesk that the agency has already successfully conducted preliminary testing of the system, which has been in development over the last year.

The system is now in a proof-of-concept phase, he added.

“It’s not just checking that the system works. We’re looking at the complete technical and regulatory framework that is in place,” Annunziato said.

The private blockchain the CBP is developing is expected to duplicate the paper-based system presently in use, simplify the procedure for users and thereby reduce the time spent working on the paperwork.

With the new system, participants of importing deals will be informed of the proceedings instantly:

“Once the supplier submits the data, not only the government is informed, but also the broker and the importer.”

The data would be input in the system “upfront,” streamlining the whole process of communication, he said. As an example, an individual may want to bring a dog from Germany to the U.S. If the system can guarantee the message about the dog’s health comes directly from the German government, the importer won’t need to supply any additional documents.

When asked about the security of the new system, Annunziato said that it is of “the utmost importance” and “it’s [going to] be tested.” The transparency of the new system would not affect the competition negatively, he believes: “Would it be okay with one competitor to know that another competitor submitted 10 certificates for imports from Mexico or Canada? We think it’s okay.”

Annunziato declined to name specific companies the CBP has partnered with to develop its platform, but said that the selection of partners is done by the Department of Homeland Security, explaining:

“DHS has a bank of companies that we can use for these projects. We solicit for volunteers, the companies come forward, and then we select from that group of people.”

That being said, he did explicitly deny that CBP was working with IBM on the project.

The next stage will be testing the system for intellectual property rights, Annunziato said. The CBP is already “taking volunteers” for that project, though no timeline was provided.

In June, The U.S. Department of Homeland Security (DHS) has awarded a grant of $192,380 to blockchain project Factom to support beta testing of a platform aimed to secure data from Border Patrol cameras and sensors.

Shipping image via Shutterstock



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