More OR&R Involvement in Reviewing Blockchain Expected, Annunziato Says

OR&R already will be more connected during the coming blockchain test involving intellectual property rights, Annunziato said. It will need to play an active part in the IPR piece because of its role in approving applicants that ask CBP for protection, he said. "They're going to be coming in and looking at our operations and then what the legal things are," he said. Annunziato already has fielded a number of questions from OR&R, he said. All of that needs to be in the assessment of the POC, he said. "I'm not there to promote blockchain, I'm not there to take sides on it," he said.

Annunziato expects to see some trade facilitation benefits in particular within the IPR blockchain test (see 1812060007) involving "generational licensing," he said. "If you have a license that goes out to Company A, and Company A licenses out to Company B, can we follow that and then can we give that benefit to everyone who's licensed, to come in through that system," he said about what they will be looking at. There's no certainty that blockchain will make sense in the different scenarios, which is part of the reason the tests are being conducted, he said. Also still necessary is "data load testing" to find out what happens "if I send 100,00 of these in, versus four or five," he said.

Annunziato also took issue with some recent International Trade Today coverage of the assessment of the certificates of origin test (see 1903060043), though he said he understood how the assessment could be interpreted "from the outside" in a way that doesn't match his own understanding of it. The POC was designed to simulate a current process, so it's not surprising that some saw the test as duplicating the filing process, he said. As a result, some who might have been expecting a different outcome didn't experience the full benefits of blockchain, he said.

The specific application of blockchain to the NAFTA/CAFTA processes is less important to the test itself, he said. "The success of the test is that we tested," he said. The assessment was produced by the government and was more detailed in terms of the government views, he said. "We had it segregated out with certain staff doing certain things, but with the trade, they kind of got pushed into the questionnaire and they just answered -- so you might be getting answers from software providers, an importer or a broker with different perspectives," he said. The next assessment will include a sliding scale questionnaire, which should improve how the feedback is measured, he said. Industry will be the driver for blockchain, which may mean another two to three years "before it really starts to fill in," Annunziato said.

"When you start looking at the totality of what we did, as far as benefits, it gets a little bit more complicated because you have to take that forward vision," he said. "So the forward vision would be, if you think of blockchain as a team sport, and if I have everybody contributing at the same time, you already begin to understand that that reduces the amount of labor that you have to do." Activities such as sending documents, storing documents and re-keying information would no longer be necessary, he said.

It would most likely take about "two years from the time Customs decides to invest in something" for CBP to put some level of blockchain in place, unless the agency chooses to move more quickly through a procurement, "but I don't see that happening right now." A pipeline test using blockchain is planned for the summer, Annunziato said. That test is designed to examine CBP's ability to track foreign oil shipments "either through the pipeline into the U.S" or from "spigot to entry," he said. "We think we've actually started to unlock that now," he said.

Other government agencies are starting to take a closer look toward blockchain, too, Annunziato said. The Food and Drug Administration, for example, is "starting to move, especially, I think, because of the food safety" aspect, he said. The Department of Health and Human Services, which oversees FDA, recently "got an authority to operate" and have "a system that they're standing up," he said.

Outside of blockchain, a couple of other initiatives are in the works, Annunziato said. For example, the BTID will be meeting with all of the policy offices of the Office of Trade and the COAC for a "trade idea festival, so to speak," he said. The BTID would start "bucketing and prioritizing" and seeing "what management would like us to look into for them."

Also being discussed is a means for better data sharing with other countries around trusted trader benefits, he said. "Wouldn't it be pretty interesting if we have a country that we're partnering up with and they're getting [Customs-Trade Partnership Against Terrorism] benefits and then if we want to have [an] importer then apply for benefits in our country, they can then apply and we can then get something verified by the other country that they actually got the CTPAT benefit," he said. "It's in concept right now" and would require further approval before going forward with starting to line up other countries, he said. But "I would like to see us do something internationally in a test."