How close can business get to frictionless borders?

Border bureacracy inevitable but businesses can tap existing technologies to smooth the way after Brexit

A ‘No Border No Brexit’ sticker near the Hands across the Divide peace statue in Derry. Photograph: Charles McQuillan/Getty Images

A ‘No Border No Brexit’ sticker near the Hands across the Divide peace statue in Derry. Photograph: Charles McQuillan/Getty Images

 

If Brexit goes ahead, could cutting-edge technology make a frictionless border possible? That was the question Senator Terry Leyden raised on a visit last summer to the National College of Ireland, where he was addressing students working in areas such as cloud computing, web technologies, fintech, cybersecurity and data analytics.

The question comes against a political background where the UK government is chasing a frictionless solution to avoid the need for any post-Brexit hard border in Ireland. With the deadline for Brexit looming later this month, no frictionless solution has proven effective.

National College of Ireland has a history of running invention competitions, where groups of students wrestle with real-world problems rather than theory. In this case, with Pramit Kumar and Sourav Bhattacharya, we have worked to create a “verified trade partner” solution to post-Brexit trade.

We realised we had to find a solution that would work regardless of the outcome of Brexit: deal or no deal, soft border, hard border or border in the Irish Sea, and not just for companies trading with the UK but for those transiting through the UK to continental Europe.

The verified trade partner solution leverages existing, tried-and-tested technologies and is based on four fundamental pillars – import-export order matching; QR codes; blockchain technology; and automatic number plate recognition.

Essentially the system provides a tool for customs authorities to monitor and control imports and exports between certified traders, and facilitates physical checking of goods. While we don’t underestimate the extent of the complexities of the logistics, regulation and administration involved, we believe we have come up with a system that would form the basis of a solution to the problem of post-Brexit trade.

Authorised Economic Operator

Authorised Economic Operator is an optional certification at the moment, but many Irish businesses are already registered because of the trust that comes with it, which reduces the requirement for customs controls.

Administered in Ireland by the Revenue Commissioners, you can complete a self-assessment questionnaire on revenue.ie to ensure your business procedures meet the criteria, which include customs legislation and tax compliance, financial solvency, and appropriate record-keeping. The application form is also available online.

Adding a system that allows a customs officer to use QR codes to instantly match an export order with its corresponding import order further speeds the process. QR stands for “quick response”, and these codes were designed back in 1994 with the intention of being decoded at high speed.

QR readers are widely available for download on both Apple and Android platforms, and codes can be created and printed easily, requiring little or no hardware investment. They are similar to barcodes but they can store a lot more information in a lot less space. They are also less easily damaged and so less likely to become unreadable during the wear-and-tear of transport.

Blockchain solutions

Blockchain technology, developed over the past decade, ensures the integrity of documentation at all points. It combines the accessibility and convenience of the internet with the security of encryption and shared attention.

Blockchain is like an online version of a ledger. Its key strength is that it is designed to make it virtually impossible to add, remove or change data without being detected. Since all participants have a copy, they have the ability to see any tampering.

Accessible through apps, blockchain can be cheaper for businesses than traditional technology. And because blockchain is a single, shared database that’s always updated, it means there is no need for businesses to create and maintain their own database.

The industry feedback we’ve received suggests that our verified trade partner solution anticipates the direction international trade is taking in any case, outside of and no matter the outcome of Brexit.

Our research drew on resources that many smaller businesses in Ireland might not have – our own professional backgrounds and experience, our academic specialities, the time to focus on all the complexities of the challenge, and the insight and feedback of industry and faculty mentors.

Speeding transit through borders relies on businesses establishing themselves as “trusted”, and engaging with decentralised transaction and tracking technologies.

However, the closest we could come to “frictionless” will still not be as fast as no border at all. It involves registration, certification, software, hardware, labelling and tracking – and there will, in any case, be random checks. Quite simply, Irish businesses need to prepare for a changed landscape after Brexit. AEO certification and self-education in these technologies are very good places to start.

Chris Gaffney is studying for a postgraduate diploma in fintech at National College of Ireland

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