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​Home Affairs considers blockchain for Australia's trade supply chain visibility

The department wants to build a single point of control for managing Australia's international trade and is looking to emerging tech such as artificial intelligence, blockchain, and the IoT to gain transparency over its supply chain.

The Department of Home Affairs (DHA) is proposing a whole-of-government approach to modernise Australia's trade process, aiming to ensure an international trade future is one where government has visibility of its end-to-end supply chains and access to real-time intelligence information.

Addressing the Joint Standing Committee on Trade and Investment Growth on Thursday, DHA representatives discussed its desired single "touch point" approach to managing trade, saying it was looking to emerging technologies such as artificial intelligence (AI), blockchain, and the Internet of Things (IoT) for a suitable framework.

"The majority of traders are trusted and interact in a secure and transparent supply chain," a department spokesperson said. "Intelligence and risk assessment capabilities and revenue collection are improved by new and emerging technologies, such as blockchain, that would improve the veracity, validation, and analysis of intelligence and trade data."

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In exploring "new and innovative ways" digital technology can be used to facilitate legitimate trade, DHA said it is continually assessing the applicability of new technologies as they mature.

"Increasingly, technology development builds upon existing and more mature fundamental building blocks including: The IoT, cloud computing, data analytics, and AI," the department wrote in its submission [PDF] to the committee's inquiry into the trade system and the digital economy.

"This set of technologies forms an ecosystem in which each technology both exploits and fosters the development of the others."

A specific example DHA highlights as being easily integrated into a trade ecosystem is blockchain.

Trade information required by governments for border clearance purposes is created by industry operators in the international supply chain, and Home Affairs is assessing how it could leverage information that might be held on a trade blockchain.

"We may not need to develop discrete new border management/import/export systems, but rather leverage the pertinent information captured by industry. Home Affairs would use the information in conjunction with other processes (e.g. risk assessment) to manage the clearance of goods," the department's submission continues.

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In the international trade context, DHA believes blockchain can help reduce trade documentation such as licenses, permits, and payment evidence, as well as processing costs, and reduce delays associated with errors in the physical movement of paperwork.

"It will also provide visibility of goods as they advance through the supply chain," it added.

"Blockchain is intended to give real time visibility, significantly improving the information available for risk analysis and targeting, which may eventually lead to increased safety and security as well as greater efficiency in border inspection clearance procedures."

Additionally, DHA said blockchain could make it faster to process transactions, and support the formation of new transactional relationships.

The committee also heard on Thursday that although still a nascent technology, Home Affairs is researching, investigating, and understanding how industry is leveraging blockchain to build or contribute to its trade modernisation agenda.

"Blockchain is a tool, the information -- it gives you greater visibility of who entered data into the system," a DHA representative said on Thursday. "Garbage in, garbage out; if somebody is intentionally trying to misrepresent the information it will still go into or be captured in a blockchain. What blockchain does provide -- it's a public ledger, a distributed ledger, all stakeholders in the ecosystem will have visibility of that information where it's appropriate."

Currently, DHA is drip-fed information on trade by other government entities and the private sector, and places it into a centralised depository Home Affairs has.

The trade modernisation plan would see a "single window" for all relevant regulatory and transactional information.

"As they emerge, we will use new technologies to better analyse and assess trade data to ensure a more secure border. We will do this while ensuring the threat of cyber incursion of Australian business, as well as government, and of organised crime is managed," the department wrote in its submission.

"We recognise that the strategic use of technology will allow us to put in place more efficient business processes, as well as enhancing our capabilities in the important areas of intelligence collection and risk assessment."

The department said it will also be "adaptive and proactive" in the face of future cybersecurity challenges and will, along with Australian business and individuals, play a "critical role in protecting the community from the threats inherent in a digital trading economy".

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