Results so far show reducing transaction costs.
Australian Border Force (ABF), the Infocomm Media Development Authority of Singapore (IMDA), and Singapore Customs, along with industry participants, have concluded a blockchain trial to prove trade documents can be issued and verified digitally across two independent systems, reducing cross-border transaction costs.
The blockchain trial was initiated as part of the Australia-Singapore Digital Economy Agreement to make cross-border trade simpler between the two countries. The trial successfully tested the interoperability of two digital verification systems – the ABF’s Intergovernmental Ledger (IGL) and IMDA’s TradeTrust reference implementation.
The trial demonstrated Australia’s capability in issuing high integrity digital trade documents that can be instantly authenticated, provenance traced, and digitally processed. QR-codes embedded with unique proofs are inserted into digital Certificates of Origin (COO), enabling immediate verification for authenticity and integrity of the document when scanned or machine-read.
A key success of the trial is the acceptance of verifiable COOs by a regulatory authority, Singapore Customs. Trial participants from industry, including the Australian Chamber of Commerce and Industry, Australian Industry Group, ANZ Bank, DBS Bank, Standard Chartered and Rio Tinto, noted the benefits of improved efficiency through time and cost savings by using verifiable COOs.
ABF Commissioner Michael Outram said he was pleased with the positive results which will contribute to improving cross-border processes for Australian trading community.
“ABF is proud to pioneer cutting-edge digital verification projects in Australia. We understand this collaboration is among the first to involve multiple government agencies from two countries to achieve cross-border document interoperability.
“Digital verification and verifiable documents show promise as a ‘circuit-breaker’ to disrupt persistent paper-based evidence required by authorities,” Commissioner Outram said.
The goal of the IGL platform is to progressively remove the need for paper documents and reduce cross-border transaction costs for Australian business, consistent with commitments under the Simplified Trade System reform agenda.
Both IGL and the TradeTrust reference implementation use the TradeTrust framework as the key underlying technology to allow interoperability, so the document can be verified by both systems. TradeTrust’s approach to verification provides flexibility to allow documents to be verified not only in digital format but also when the documents are converted into a paper document at any point of the transaction.
Lew Chuen Hong, Chief Executive of IMDA said: “IMDA spearheads the development of digital utilities as baseline infrastructure for the digital economy. As one such utility, TradeTrust helps verify documents for more efficient cross-border trade. This successful trial demonstrates TradeTrust’s value as a framework to connect governments and businesses for more effective trade flow.”
COOs are usually issued on paper and businesses regularly wait days to receive the hard-copy document via courier before dispatching to multiple parties, including customs agencies, brokers, and banks. Paper trade documents are generally required by authorities to prove authenticity and integrity.
Ho Chee Pong, Director-General, Singapore Customs said the COVID-19 pandemic has accelerated trade digitalisation, and demonstrated the importance of cross-border paperless trade.
“Singapore Customs appreciates the close collaboration with Australia in this aspect, and looks forward to further collaboration in promoting paperless trade,” Ho added.
In using this blockchain-based, decentralised approach, transactions can become more cost effective and offers scalability without the need for expensive data exchange infrastructure, lowering barriers to the adoption of paperless cross-border trade.