Tag / Data Analysis

by Mike Poverello

Implications of ‘Big Data’ for Customs Risk Management Capability

big_data

Historically, a customs officer’s “intuition” backed up by his/her knowledge and experience served as the means for effective risk management. In the old days (20 years ago and back) there wasn’t any need for all this ‘Big Data’ mumbo jumbo as the customs officer learnt his/her skill through painful, but real-life experience, often under bad and inhospitable conditions.

Today we are a lot more softer. The age of technology has superseded, rightly or wrongly, the human brain. Nonetheless, governments thrive on their big-spend technology budgets to ensure the safety of their economies and supply chains.

No less, the big multinational corporations whose ‘in-house’ business is no longer confined by national boundaries or continents are responsible for the generation of huge amounts of data which need to extend  to the limits of their operations. When the products of such business are required to traverse national boundaries and continents,  their logistics and transport intermediaries, financiers, and insurers become themselves tied up in the vicious cycle of data generation and transfer, also spanning national boundaries to ensure those products arrive at their intended destinations – intact, in time and fit for purpose. Hence we have what as become known as the international supply chain.

It does not end there. Besides the Customs authorities, what about the myriad of other government regulatory authorities who themselves have a plethora of forms and information requirements which must be administered and approved prior to departure and upon arrival of goods at their destination.

Inefficiencies along the supply chain culminate in delays with added cost which dictates the viability for sale and use of the product during delivery. These may constitute what is called non-tariff barriers (or NTBs) which negatively impact the suppliers credibility in international trade.

The bulk of this information is nowadays digitised in some for or other. It is obviously not all standardised and structured which makes it difficult to align, compare or assimilate. For Customs it poses a significant opportunity to tap into and utilise for verification or risk management purposes.

The term ‘Big Data’ embraces a broad category of data or datasets that, in order to be fully exploited, require advanced technologies to be used in parallel. Many big data applications have the potential to optimize organizations’ performance, (and here we have it) the optimal allocation of human or financial resources in a manner that maximizes outputs.

At this point, let me introduce one of the latest WCO research papers – “Implications of Big Data for Customs – How It Can Support Risk Management Capabilities” by Yotaro Okazaki.

The purpose of this paper is to discuss the implications of the aforementioned big data for Customs, particularly in terms of risk management. To ensure that better informed and smarter decisions are taken, some Customs administrations have already embarked on big data initiatives, leveraging the power of analytics, ensuring the quality of data (regarding cargos, shipments and conveyances), and widening the scope of data they could use for analytical purposes. This paper illustrates these initiatives based on the information shared by five Customs administrations: Canada Border Services Agency (CBSA); Customs and Excise Department, Hong Kong, China (‘Hong Kong China Customs); New Zealand Customs Service (‘New Zealand Customs’); Her Majesty’s Revenue and Customs (HMRC), the United Kingdom; and U.S. Customs and Border Protection (USCBP). Source: WCO

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by Mike Poverello

WCO News – February 2017 Edition

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Predictably, the first edition of WCO News 2017 provides a spectrum of insight on this year’s Customs theme – “Data Analysis”. Here’s a preview:

  • Data analysis: seizing opportunities for effective border management – By Kunio Mikuriya, Secretary General, World Customs Organisation.
  • Data analysis for effective border management – the Canadian experience By Charles Slowey, Director General, Global Border Management and Data Analytics, Canada Border Services Agency.
  • Border management modernization in New Zealand forges ahead – By Murray Young, Chief Information Officer, New Zealand Customs Service.
  • Mirror analysis, a risk analysis support tool for Customs administrations – By Roger-Claver Victorien Gnogoue, Financial Services Director, Côte d’Ivoire Customs
  • Data analysis in risk management: Singapore Customs’ perspective – By Singapore Customs
  • API-PNR: an overview of the French system and the challenges faced – By Christophe Hypolite, PNR Mission, France
  • Developing data analyst skills: how the WCO contributes to expanding this specialized area of work By Tsendsuren Davaa, Ph.D., Professional Associate, Compliance and Facilitation Directorate, WCO
  • Cognitive computing for Customs agencies: improving compliance and facilitation by enabling Customs officers to make better decisions – By Stewart Jeacocke, Global Customs Expert, IBM, and Norbert Kouwenhoven, EU Customs Leader, IBM European Union Team

Nice to also see a contribution from one of SARS’ own titled “Customs and the environment: bringing about a better future for all” – By Roux Raath, Environmental Programme Manager, WCO. You can access and download the magazine by clicking here!

by Mike Poverello

WCO – the opportunities and challenges of E-commerce

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The WCO Policy Commission, held in Moscow, Russian Federation, from 5 to 7 December 2016 under the chairmanship of Mr. R. Davydov, brought to the fore the key role of Customs in creating a sustainable and efficient e-commerce ecosystem, reviving-up the exchange of data between stakeholders and enhancing risk-management through electronic interface. The other main topics discussed during the Commission pertained to trade facilitation, security, the enhancement of the Customs/Tax cooperation and the modernization of Customs administrations.

The newly established WCO Working Group on E-Commerce will work to tackle the different dimensions of e-commerce by collecting and exchanging best practices in the field, stocktaking and leveraging some of the ongoing work being carried out by other entities and drawing up proposals geared towards the development of practical solutions for the clearance of e-commerce shipments, including appropriate duty/tax collection mechanisms and control procedures.

Concerning the in-depth discussions on Custom /Tax cooperation, the WCO issued this year “Guidelines for strengthening cooperation and the exchange of information between Customs and Tax authorities at the national level” and will continue working on topics of common interest for Customs and Tax experts such as transfer pricing, drawback and Illicit Financial Flows (IFF).

During the Commission, WCO Secretary General Kunio Mikuriya, confirmed the WCO Theme for 2017 “Data Analysis for Effective Border Management” and stressed the impact of the digital revolution and the need to address promptly the challenges posed to the global economy. The Secretary General invited all the WCO Members to promote and share information in the coming months on how they are leveraging the potential of data to advance and achieve their objectives and respond to the expectations of traders, transport and logistic operators, and governments.

As data analysis will be emphasized in 2017 as a force multiplier for Customs administrations, it is relevant to highlight that the WCO is carrying out a Study to collect best practices among its members to assess and promote initiatives in the area of e-commerce. A previous analysis of preliminary data underscored the need for digitalization of processes, better sharing of information between e-commerce stakeholders and customs for improved risk management and the necessity for harmonization in the low-value shipment processes. Source: WCO

by Mike Poverello

WCO declares 2017 to be the year of Data Analysis

wco-icd2017The Secretary General of the WCO, Kunio Mikuriya, announced today that 2017 will be dedicated to promoting data analysis under the slogan “Data Analysis for Effective Border Management.” WCO Members will thus be called upon to further promote their efforts and initiatives in a sector that is becoming a key element in Customs modernization process: collecting and analysing data.

Customs has a substantial amount of data at its disposal, such as data submitted for the Customs clearance process. Customs can also tap data from other government agencies, commercially available databases, and open source information platforms such as digitized global public records and multilingual news sources.

Moreover, physical objects are nowadays embedded within electronics, software, sensors and network connectivity, which enables these objects to collect and exchange data, a phenomenon known as the ‘Internet of things’.

Simply collecting data for its own sake, however, is not sufficient and Customs administrations may face the risk of being overwhelmed with an avalanche of data. Data only has value when it is used effectively and efficiently. It is critical, therefore, that Customs administrations leverage data to make informed decisions, especially given the sophisticated and evolving challenges that Customs administrations face every day.

Data analysis can propel Customs to new levels of success in both compliance and facilitation, by enabling it to:

  • improve risk management which supports enhanced detection of irregularities, illicit consignments, the suspicious movement of people and financial flows, and the facilitation of legitimate trade;
  • learn from historical activity to predict trader or passenger behaviour;
  • engage with other government agencies to leverage their experience and expertise;
  • conduct quantitative research for purposes of building knowledge;
  • enhance performance measurement to improve officer practices and integrity. Data analysis thus can greatly support the core Customs’ objectives of revenue collection, border security, collection of trade statistics, and trade facilitation.

“To achieve these benefits, Customs administrations should make data analysis a strategic priority and acquire cutting-edge technology, establish appropriate automation policies, and recruit experts to collect and analyse data, and act upon the data-driven insights”, said WCO Secretary General, Kunio Mikuriya.

There are of course potential obstacles to an optimal use of data, such as the lack of qualitative data, data that has not been integrated or merged, lack of harmonization of data across border agencies, lack of skilled resources, IT infrastructures and cultural challenges. In addition, it is vital that appropriate privacy and confidentiality laws be respected.

“Data analysis and related challenges will be thoroughly discussed within the WCO during 2017, and at events such as the Information and Technology Conference, the Global Conference on Transit, and the Technology and Innovation Forum”, Dr. Mikuriya added.

As part of this initiative, the WCO will enhance the promotion of tools such as the WCO Customs Enforcement Network (CEN) which is a global Customs seizure database; the WCO Time Release Study (TRS) which is a methodology for measuring border agency clearance times; mirror analysis which involves using the HS Code to compare imports (or exports) of a country with exports (or imports) reported to the country by its trading partners to detect gaps in terms of quantities, weight or value that may reveal fraudulent flows or practices; the use of performance measurement to improve Customs procedures and integrity, such as through the techniques presented in the WCO Performance Measurement Contracts Guide; and the Data Model which supports data analysis by improving data collection and enabling the sharing of data between government agencies.

The WCO’s annual theme will be launched on International Customs Day, which is celebrated annually by the global Customs community on 26 January in honour of the inaugural session of the Customs Co-operation Council (CCC) which took place on 26 January 1953.

The WCO invites the Customs community to mark 26 January 2017 in their diary. Source: WCO