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INSIGHTS FROM THE PROFILE EU PROJECT WHERE TO POSITION DATA ANALYTICS IN THE CUSTOMS PROCESS AND PERFORMANCE IMPROVEMENT CONSIDERATIONS:
1
Prof. dr. Yao-Hua Tan (Delft University of Technology)
Dr. Boriana Rukanova (Delft University of Technology)
MSc. Marcel Molenhuis (Customs Administration of the Netherlands)
Dr. Micha Slegt (Customs Administration of the Netherlands)
Jonathan Migeotte (Belgian Customs)
Dr. Mathieu L.M. Labare (Belgian Customs)
Dr. Toni Mannisto (Cross-border Research Association)
Dr. Juha Hintsa (Cross-border Research Association)
Customs PROBLEM
• 160 M customs declarations/year submitted by importers/exporters to Dutch Customs
• Most of them have inaccurate data • Price too low (Undervaluation) • Incorrect Description of Goods (e.g. ‘Toys’)
• Due to e-Commerce, Brexit declaration could increase to 450M/year by in a few years!!
• This steep increase can not be solved by hiring more inspectors, only by more automated processing of declarations with IT innovation
• IT innovation • Collect extra business data (e.g. purchase order, invoice, container
packing list) to cross-validate declaration data • IT infrastructure for sharing data in international supply chains • Data Pipeline, Blockchain and Big Data analytics
2
Data Pipeline (Frank Heijmann, David Hesketh)
3
Consignor or Exporter
Consignee or Importer
Container/Carrier
Freight
Forwarder or 3PL
Freight
Forwarder or 3PL
EU Regulation
Country B
Port 1
Port 2
CARGO
3rd Country Regulation
Country A CARGO CARGO CARGO
Ph
ysic
al la
yer
Org
anis
atio
nal
la
yer
Dat
a &
Do
cum
ent
la
yer
“Internet for Logistics” developed in EU research projects e.g. CORE, CASSANDRA, ITAIDE
4
Global data pipelines already scaling-up e.g. TRADELENS Blockchain IT platform
Paperless Trade (Blockchain Network)
Export
Inland Transportation Port / Terminal Authorities
3PL Service Providers
Packing List
Export documentation
Bill of Lading
Shipping instructions
Commercial Invoice
Exporter / Consignor
Import
3PL Service Providers
Importer / Consignee
Inland Transportation Authorities Port / Terminal
Shipping Information Pipeline
Certificate of Origin
Dangerous Goods Declaration
ISF
Not exhaustive list of Events tracked by platform
Note: representative only; not all documents require Paperless Trade nor is this an exhaustive set of documents that could be processed by Paperless Trade
Advance declaration Customs
Clearance
Geography specific
certificate
Empt
y co
ntai
ner
pick
ed u
p fr
om d
epot
Star
t co
ntai
ner
trac
king
ETA
empt
y co
ntai
ner
at
stuf
fing
site
VGM
sub
mitt
ed
ATD
Pac
ked
cont
aine
r fr
om
stuf
fing
site
Estim
ated
gat
e in
for
pac
ked
cont
aine
r at
ter
min
al e
xpor
t
Gat
e in
ful
l at
term
inal
ex
port
ETD
pac
ked
cont
aine
r fr
om
expo
rt t
erm
inal
Pack
ed c
onta
iner
load
ed
Empt
y co
ntai
ner
pick
ed u
p fr
om s
trip
ping
loca
tion
AT
A p
acke
d
con
tain
er a
t im
po
rt t
erm
inal
Estim
ated
dis
char
ge t
ime
for
pack
ed c
onta
iner
at
impo
rt
term
inal
Estim
ated
gat
e ou
t of
pa
cked
con
tain
er f
rom
te
rmin
al im
port
Gat
e ou
t pa
cked
con
tain
er
from
ter
min
al im
port
ETA
pack
ed c
onta
iner
at
strip
ping
loca
tion
ATA
pack
ed c
onta
iner
at
strip
ping
loca
tion
Seal
rem
oved
Pack
ed c
onta
iner
str
ippe
d at
inla
nd lo
catio
n
Empt
y co
ntai
ner
read
y fo
r pi
ck-u
p
ATA
empt
y co
ntai
ner
at
depo
t
Cont
aine
r tr
acki
ng e
nded
ATA
Empt
y co
ntai
ner
at
stuf
fing
site
Co
nta
iner
stu
ffin
g
com
ple
ted
at
inla
nd
loca
tio
n
Cont
aine
r se
aled
ATD
pac
ked
cont
aine
r fr
om
expo
rt t
erm
inal
ETA
pack
ed c
onta
iner
at
impo
rt t
erm
inal
Tem
pera
ture
upd
ate
Expo
rt d
ocum
enta
tion
clea
red
Pack
ed c
onta
iner
dis
char
ged
at
impo
rt t
erm
inal
Impo
rt d
ocum
enta
tion
clea
red
Cont
aine
r se
lect
ed f
or
insp
ectio
n
Cont
aine
r re
ady
to lo
ad
Cargo specific
certificate
Import documentation
Pre-paid invoice
Hyperledger Fabric
Data sharing and data analytics as next steps
• “Get Data from the Source”; Customs should use more trade data to cross-validate accuracy of import/export declarations
• Examples: invoice, purchase order, packing list • Companies are willing and able to share their trade data via IT
platforms with customs • Able; Most companies use enterprise information systems (e.g. ERP) • Willing; if it provides less inspections (= “trade facilitation”)
• Data sharing among customs administrations, as well as between Customs and other agencies nationally and internationally
• Combining data from different sources can improve risk management
• Data analytics as a next generation IT innovations for customs
5
Current research in the PROFILE EU-project
• 4 Living Labs for using data analytics in customs in different countries
• Living labs pilot with data analytics based on: • Internal customs data • External government data from other customs or
other government agencies • External data from eCommerce websites • External data from data pipeline providers
Risk Analysis in the Customs Clearance Process
8
Different Options of Where to position Data Analytics in the Customs Process
9
Declara'ons
Riskrules
Notselected
Selected
Notselected
Selected
Truenega've
Falsenega've
Falseposi've
Trueposi've
Capturinginspec'onresults
1 2
3
DA?
DA?
DA?CountryA
Compare/Validate
Declara'ons
Riskrules
Notselected
Selected
Notselected
Selected
Truenega've
Falsenega've
Falseposi've
Trueposi've
Capturinginspec'onresults
1 2
3CountryB
4
DA?
Where to focus the performance improvements with Data Analytics
10
Declara'ons
Riskrules
Notselected
Selected
Notselected
Selected
Truenega'veFalsenega'veFalseposi've
Trueposi've
1 23
??
Largeincreaseindeclara'onvolumes
?
Observations • Decision points where DA benefits are most useful
• Use DA to decrease False Positive inspections? • Now typically 94% False Positives • What if DA would improve that to 70% False Positives? • Less ineffective inspections, hence increase customs efficiency
• Needed to be able to process the huge growth in declarations due to
e-commerce and Brexit
• Use DA to decrease False Negative inspections • “catch more illicit trade”
• Different types of DA innovation (e.g. different training data sets)
• Customs Resource limitations constrain DA benefits • More true positives also requires more customs staff
• to inspect • for administrative after processing (fines, reporting etc.)
• Trade-offs have to be considered between DA innovation and customs resource limitations
11
12
EXECUTIVE MASTER
ROTTERDAM SCHOOL OF MANAGEMENT
ERASMUS UNIVERSITY
The business school that thinks
and lives in the future
UNIQUE CONTENT FOR LEADERS IN CUSTOMS AND INTERNATIONAL TRADEDo you want to learn how to put knowledge from customs regulations,
supply chain management, and logistics with information
compliance into practice? It all comes together in RSM’s Executive
Master in Customs and Supply Chain Compliance programme.
Customs leaders learn to combine these topics to better understand
and collaborate with businesses and inspection services.
INNOVATIVE AND PRACTICALThe world of customs agencies is changing. Innovative
developments force customs authorities to collaborate with
other inspections and business. There is a general trend towards
regulatory compliance rather than command and control, facilitated
by information systems. You will explore and discuss cases with
different stakeholders and guest speakers who will provide you with
fresh perspectives and new knowledge.
ACADEMIC EXCELLENCE You will benefit from this programme’s unique content, which
is built on the strengths of faculties from three universities:
Erasmus University Rotterdam, Delft University of Technology and
Eindhoven University of Technology. Each conducts forward-looking
research, which you will use to examine the most recent insights.
EXECUTIVE MASTER IN CUSTOMS AND SUPPLY CHAIN COMPLIANCECombining safety, security and sustainability with compliance
and efficiency in international trade.
https://www.rsm.nl/master/executive-masters/executive-master-customs-and-supply-chain-compliance/overview/
THANK YOU!
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Prof. dr. Yao-Hua Tan, Delft University of Technology [email protected] Program Director Master Customs and Supply Chain Compliance Rotterdam School of Management Scientific Coordinator EU projects PROFILE, PEN-CP, CORE, CASSANDRA, ITAIDE www.profile-project.eu www.pen-cp.net