© Macao Customs


Technology in times of pandemic

25 February 2021
By Milena Budimirovic and Vyara Filipova, WCO Secretariat

WCO events went digital in 2020, including the WCO annual conference dedicated to technology, recently rebranded as the WCO TECH-CON. The theme of the 2020 edition[1] was dictated by the circumstances, and the 50 speakers were asked to share their experience of how technology had helped them manage the new constraints and challenges created by the COVID-19 pandemic. Below are just some of the ideas gleaned from the event which attracted 1300 participants from 142 countries.

Accelerating the use of technology

Representing Customs, the private sector, international organizations and academia, all speakers agreed that the use of technology had accelerated since the beginning of the crisis, and that a number of lessons could be drawn from the previous few months. They echoed the conclusion of consulting firm McKinsey & Company, along with many others, who noted that “responses to COVID-19 have speeded up the adoption of digital technology by several years and many of these changes could be here for the long haul”.[2]

The pandemic has also provided an opportunity to internalize the idea of digitization, which was always an option, but not necessarily a priority, for governments and their agencies. Customs administrations have used the opportunity to advance digitalization initiatives that were already underway, as well as to instigate new technology projects to eliminate the use of hard copies and cash, for example. It has proven to be a very transformative period. In some instances, governments have made major changes and the private sector has struggled to keep up.

Keeping officers and clients safe

The pandemic has called for solutions to ensure that officers not working remotely, and the people they come in contact with, such as drivers or declarants, do not spread the virus. These solutions include the use of infrared fever measuring equipment, protective shields, and safe passage booths. Some administrations have devised a regional driver tracking system, allowing for COVID-19 test results performed on lorry drivers to be sent in advance of the arrival of the driver in the neighbouring country. Others have turned to remote monitoring tools such as drones, cameras and other devices to enable their officers to reduce physical movements and contact. It was also felt that there was an opportunity to leverage technology for the benefit of Authorized Economic Operators (AEOs), including for validating and re-validating their status in a remote manner, and supporting implementation of Mutual Recognition Agreements/Arrangements (MRAs), thus facilitating cross-border trade.

Advance electronic information is key to efficient clearance

Systems enabling the reception and sharing of pre-arrival information are considered to be the main tools enabling Customs and other agencies to speed up clearance and provide priority passage for critical consignments.

The event highlighted the fact that small and medium-sized enterprises (SMEs) often do not provide Customs with advance electronic information. In some countries, it may be necessary to help SMEs identify ways of submitting information in advance and thus benefitting from faster clearance.

Technology is an interagency cooperation enabler

The event recognized the role of single window solutions in facilitating interagency cooperation during the clearance process. It also pointed to the benefits of centralizing and sharing inspection data on a single platform.

Accepting electronic documents has been a game changer and should continue

Many administrations decided to allow the submission of electronic certificates and permits during the pandemic, rather than the paper form. Some participants pointed out that scanned copies could be challenging to process, as optical character recognition (OCR) or Artificial Intelligence technology was needed to extract digital data. Private sector representatives expressed the need for Customs to continue maintaining such practices even after the crisis, and to work towards the digitization of all trade-related documents. The need to build a proper legal framework and develop international standards was also mentioned.

Managing cross-border e-commerce transactions

The biggest challenges were encountered with data availability to Customs and data quality, especially with the tremendous growth of e-commerce transactions where there are new and not yet clearly identified trading patterns requiring higher sophistication and accuracy of data analytics techniques for improved risk management.

Importance of data standards stressed once again

Commercial operators should not be asked to use specific data formats and requirements every time they interacted with a public body, as this generates additional compliance costs. Participants were reminded that, to respond to this issue, the WCO Data Model (DM) had been developed as a compilation of clearly structured, harmonized, standardized and reusable sets of data definitions and electronic messages. It was intended to meet the operational and legal requirements of cross-border regulatory agencies, including Customs, which were responsible for border management. Devised jointly by Customs and the private sector, the WCO Data Model is critical for successful data exchange at both the national, bilateral and multilateral levels.

Blockchain promising but pace of adoption slow

One of the prevailing topics of the WCO TECH-CON was the deployment of blockchain technology. It was widely agreed that this technology is very useful and could help give life to the concept of a data pipeline, which would contribute to improved risk analyses and better controls, and ultimately greater trade facilitation. However, as one speaker noted, while big carriers are investing in and backing blockchain solutions for electronic documents of title and electronic trade finance, there is a need for public blockchain platforms to onboard the small and medium stakeholders. Despite the opportunities it promised, only a limited number of Customs administrations have embarked on pilots, and even fewer on full deployment of platforms based on the technology. Harmonized regulatory frameworks and neutral blockchains were seen as conditions for the uptake of the technology.

Connecting systems should be a priority

The digital format of the information collected from various IT systems can differ. Regulatory bodies such as Customs authorities could theoretically have access to data-rich ecosystems managed by public and private entities, and be able to record the journey of a shipment along the supply chain. However, this goldmine of information is not as valuable if there is no standardized and up-to-date means for Customs to collect and interpret this data.

Shift to teleworking

Most administrations adapted quickly to the new circumstances, with the staff starting to work from home. Members had to increase their bandwidth and reached out to providers for support in obtaining collaborative on-line tools. Clear benefits such as reduced commuting time, in many cases more efficiency, increased possibilities for participation in on-line trainings and events were observed. However, there was agreement that inability of inspection staff to telework, potential security breaches, poor internet connection and lack of opportunities for informal discussions and networking, was a clear disadvantage, especially for officers joining the administrations for the first time.

Need to keep an open mind

Flexibility was a word that was heard a lot during the three days of the conference: when discussing the platforms developed to collect and analyse data, when reviewing processes and workflows in the event of incidents, and when looking at possible measures to respond to a constraint, such as the need to limit physical contacts while enabling safe movements of goods and the people moving them.

The speakers supported a strong role for the WCO in continuing to be a platform for Customs multilateral cooperation and sharing of experiences on digitization. There was also an expectation that Customs should take the lead in promoting digitization not only with public entities, but also with private sector stakeholders participating in international trade.

Technology makes it possible to recalibrate procedures, training, and deployment of staff, among other things. With this in mind, the WCO Secretariat will continue to stimulate the exchange of information on the various technologies used to manage the flows of goods, people and conveyances across borders, and on progress made towards a digital supply chain. Most articles in this edition of the WCO Magazine relate to the implementation of technology, another testimony of the importance of technology for the Customs and trade community.

More information

[1] The conference was held from 11 to 13 November 2020

[2] https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/how-covid-19-has-pushed-companies-over-the-technology-tipping-point-and-transformed-business-forever