With the increasing importance of technology in the world of trade, blockchain technology is quickly taking on an important role in facilitating trade. Blockchain technology is a distributed ledger technology — that is, it is a digitized method of securely recording and verifying information in a transaction. Increasingly, both government and private sector entities are adopting the technology to make transactions in international trade more efficient and secure.

In the past few months, the United States, Thailand, China and Saudi Arabia have taken steps to increase the use of blockchain technology in customs transactions. On August 21, 2019, for example, the Commercial Customs Operations Advisory Committee of the U.S. Customs and Border Protection’s (“CBP”) held its thirteenth meeting to discuss progress on various initiatives involving blockchain technology. In addition, CBP has announced that it will start testing the applicability of blockchain technology to intellectual property rights enforcement. Moreover, CBP has announced that it is testing the technology’s ability to track complete information on import shipments, which would reduce the need for paper documents in customs transactions.

Thailand has become the next country to adopt blockchain technology to improve its customs process. Specifically, Thailand has adopted a blockchain-based platform that digitizes trade and reduces reliance on paper documentation, thereby reducing the costs of shipping and importation. Accordingly, Thailand is now the second country in the Association of Southeast Asian Nations that has adopted a blockchain-based shipment tracking and information sharing platform (Singapore was the first). China has also adopted a blockchain-style process in its customs systems, as has Saudi Arabia.

Even with the growing importance of block-chain technology, there has been relatively little progress made on the development of an international set of standards for the technology. Although work on development of standards and guidelines has been initiated by groups like Blockchain In Transport Alliance, the largest commercial Blockchain alliance in the world, and the United Nations Centre for Trade Facilitation and Electronic Business, there remains a significant need for governments, non-governmental organizations and other stakeholders to establish common rules and standards for the use of blockchain in customs transactions.