Brazil wants to build customs connectivity with blockchain

Contxto – Brazil is bringing in some innovative changes to its customs operations in 2020. The country’s IRS, known as the Receita Federal, announced a series of details regarding the launch of a blockchain project.

The initiative is known as bCONNECT and it will link up the likes of Brazil, Paraguay, Uruguay, and Argentina in early 2020. The overall purpose is to verify if blockchain technology can assist in three key areas in the customs and exportation proceedings: security, identity verification, and cost management.

The Receita Federal commissioned Serpo, a government-owned IT company, to develop bCONNECT.

bCONNECT network for customs

The Brazilian government had already hailed the coming of bCONNECT in May of 2019. Back then it had been thought of as a tool for Brazil to manage its exterior commerce with its partnering countries from the Mercosur agreement. However, no additional details had been provided.

But now it appears bCONNECT is solidifying into the real deal, to cover three areas for four countries who want to make the most of their shared trade agreement.

First, they want bCONNECT to ensure the integrity of information shared between them isn’t tampered with. Secondly, it should verify the identity of whoever feeds information onto the platform. And lastly, the partnering companies wish to see if the deployment of bCONNECT makes sense cost-wise.

But, what’s blockchain got to do with it?

Everyone involved in the project wants trade to be a smoother process. Consequently, this means tackling some of the traditional bureaucratic procedures at customs.

In order for this to happen, bCONNECT offers a shared database between Brazil and its partnering countries. Only Authorized Economic Operators (OEAs) can access the platform and share information across it. OEAS are companies, brokers, airport authorities, etc. that are allowed to engage in trade by a country’s customs authorities.

So basically what happens is Uruguay’s customs authorities will “give” Brazil a list of its OEAS, and Brazil will do the same. So if there’s a company from Brasilia that wants to export to another company in Montevideo, because they are both registered on bCONNECT, the vetting process through Uruguayan customs (hypothetically) should be easier.

In any case, the initiative is still in its pilot phase. But with bCONNECT, representatives of the Receita Federal hope to make information sharing over customs faster, more efficient, and safe. Qualities needed desperately in the logistics industry, where the exportation process often becomes a game of follow the paper trail.

-ML