Leveraging data for securing cross-border e-commerce parcel traffic ( Cross-border Research Association)

Arguments

Supply chains are in unprecedented times, making them more risky

Supporting facts:

• Conflicts such as Ukraine, staff shortages, and disruption to transport capacity all contribute to this issue

Topics: Supply chain, Risk, Covid-19, Disruption, Conflict

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Cargo crime is a big business, especially in Europe

Supporting facts:

• Europol has identified some 5,000 organised crime groups operating at an international level in the EU alone

Topics: Cargo crime, Europe, Organised crime groups

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Data is increasingly important in managing cargo crime

Supporting facts:

• TAPA’s intelligence system, the ‘Google of cargo crime’, connects the dots using various data sources to paint a clear picture of the issue

Topics: Data, Cargo crime, Intelligence

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Availability of good data can pose a threat if not secured, as bad actors can exploit it.

Supporting facts:

• Bad actors also have intelligence, they know exactly where the vulnerability in the sector is

Topics: Data security, Cyber threat

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Operational processes, including 100% screening, may need to be adjusted to fight perpetrators.

Supporting facts:

• The Yemen incident, where explosives were transported into Europe, lead to 100% screening by express companies

• Express companies cannot afford diversions as they promise speedy delivery

Topics: Operational processes, Screening, Security

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Report

Summary: Supply chains are facing unprecedented risks due to conflicts, staff shortages, and disruptions to transportation capacity. Cargo crime is a major concern in Europe, with thousands of organized crime groups operating within the EU. Data plays a crucial role in managing cargo crime, with TAPA’s intelligence system using various data sources to identify patterns and hotspots.

Cooperation and information sharing among stakeholders are recommended to mitigate supply chain risks. However, the security of data must be prioritized to prevent exploitation. Efforts to improve data may increase costs for logistic service providers, requiring a balance between cost optimization and data management.

Operational processes, including screening, need to be adjusted to combat criminal activities without affecting delivery speed. A holistic approach encompassing collaboration, data management, and security is vital for resilient and efficient supply chains.

Arguments

Question about the definition of e-commerce by OECD

Supporting facts:

• OECD’s definition of e-commerce is from 2009

• The definition states that it’s conducted over computer networks not specifically designed for the purpose of receiving or placing orders

Topics: E-commerce, OECD, Dropshipping, Fulfilment Centers

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The customer experience with e-commerce platforms needs to be improved in order to efficiently identify and tackle illicit trade.

Supporting facts:

• Customers often receive goods with low-value declaration which is not what they actually paid.

• This inefficient process impairs the accurate collections of revenues.

Topics: e-commerce, customer experience, illicit trade

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Finding a way to identify and profile entities for control in e-commerce transactions is needed

Supporting facts:

• In the case of e-commerce, most transactions involve individual consumers rather than legal entities.

• Custom officers use a credit analysis process to determine the level of trust and facilities provided to a company involved in transactions.

Topics: Risk Management, E-commerce, Customs Control

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Report

The discussion revolves around the definition of e-commerce by the OECD and its potential vagueness, specifically regarding social media sales, dropshipping, and fulfilment centres. The OECD’s definition of e-commerce, which dates back to 2009, states that it is conducted over computer networks that are not specifically designed for the purpose of receiving or placing orders.

However, it is argued that this definition may be unclear or vague with regard to newer forms of e-commerce, such as social media sales, dropshipping, and fulfilment centres. The audience raises concerns about the need for improved customer experience on e-commerce platforms in order to efficiently identify and tackle illicit trade.

Customers often receive goods with low-value declarations, which do not accurately reflect the actual amount they paid. This inefficient process hampers the accurate collection of revenues. Therefore, there is a pressing need to enhance the customer experience on e-commerce platforms to ensure more accurate declarations and effectively combat illicit trade.

Furthermore, the audience believes that e-commerce platforms should take a more proactive role in eliminating illicit trade. This entails actively implementing measures to identify and address fraudulent activities and ensuring the integrity of transactions. By taking a proactive stance, e-commerce platforms can contribute to the overall goal of achieving peace, justice, and strong institutions.

Another important aspect discussed is the need to find a way to identify and profile entities for control in e-commerce transactions. While not all transactions in e-commerce require customs control, it is essential to differentiate and profile entities involved in transactions.

This can be achieved through a credit analysis process used by customs officers to determine the level of trust and facilities provided to a company engaged in e-commerce transactions. By effectively identifying and profiling entities, customs authorities can allocate resources more efficiently and mitigate the risks associated with illicit trade.

In conclusion, the discussion highlights the potential vagueness of the OECD’s definition of e-commerce and the necessity for it to encompass newer forms of e-commerce like social media sales, dropshipping, and fulfilment centres. It emphasizes the importance of enhancing the customer experience on e-commerce platforms to effectively combat illicit trade and calls for e-commerce platforms to take a proactive role in eliminating such activities.

Additionally, the need to identify and profile entities for control in e-commerce transactions is underscored, with a focus on using credit analysis processes to differentiate trustworthy entities. Overall, these discussions contribute to the ongoing efforts in improving e-commerce practices and ensuring their alignment with the sustainable development goals.

Arguments

Importance of data to identify high-risk traffics and smuggling

Supporting facts:

• Data helps to reduce risks by identifying illegal or suspicious activities

• Customs authorities can protect traders’ reputations from fraudulent activities via data insights

• Data sharing between departments can speed up clearance process

Topics: Data Analysis, Security, Customs Control

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Use of anti-patterns to detect anomalies

Supporting facts:

• Understanding companies’ normal behavior through data helps customs authorities to detect any changes which might indicate illegal activities

Topics: Data Analysis, Security

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Preventing incidents through data

Supporting facts:

• Data can help prevent smuggling of dangerous items like firearms and drugs

• Customs can protect parcel post workers from dangerous substances like fentanyl

Topics: Data Analysis, Security, Protection

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Requirement to put links to sellers’ websites under review

Supporting facts:

• There have been conversations with HMRC

• The process is starting and being continued one by one

• The EU has put pressure on marketplaces to be responsible for data

Topics: Sellers’ Websites, UK Legislation, Online Marketplaces

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Entities willing to share data and cooperate with customs help maintain their own reputation and identify problem clients.

Supporting facts:

• An entity’s reputation may be at risk if there’s a pattern of seizures at their warehouse.

• The compliance with data sharing helps the customs better understand the trade body, maintaining a balance.

• Entities which do not share data or seem purposefully unhelpful may have to face stricter inspection, hampering businesses.

Topics: Risk Management, Trade Compliance, Data Sharing

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Report

The provided information highlights the significance of data in customs control and security. Data analysis plays a critical role in reducing risks and identifying illegal or suspicious activities. By analysing data, customs authorities can effectively safeguard traders’ reputations from fraudulent activities.

Additionally, data sharing among different departments can expedite the clearance process, enhancing overall efficiency. Another important aspect emphasized is the use of data to comprehend companies’ normal behaviour. By analysing data patterns, customs authorities can more easily detect changes that may indicate illegal activities.

This approach enables the use of anti-patterns to identify anomalies, facilitating the identification of potential risks and threats. The stance on stringent control over firearm imports is presented due to the presence of strict gun laws in the UK. Incidents involving the smuggling of Scorpion machine guns into the country, resulting in the loss of innocent lives, underscore the significance of maintaining strict control measures.

Data analysis also plays a crucial role in preventing the smuggling of dangerous items such as firearms and drugs. By leveraging data, customs authorities can effectively identify and prevent such incidents. Furthermore, data insights can help protect parcel post workers from hazardous substances, such as fentanyl.

Regarding online marketplaces, discussions with HMRC are underway, leading to a review of the requirement to include links to sellers’ websites. The EU has exerted pressure on marketplaces to assume responsibility for data. This development highlights the necessity of ensuring responsible data management practices within online marketplaces.

While the future policy direction remains uncertain, progress in this regard has been influenced by the ongoing pandemic and other global events. It is too early to determine the specifics of where the policy is heading, as the process is still in the planning stages.

Entities that willingly share data and cooperate with customs not only help maintain their own reputation but also assist in identifying problematic clients. Conversely, entities that do not share data or purposefully impede the process may face stricter inspections, resulting in potential disruptions to their businesses.

To aid in risk management, the suggestion of implementing a system within trade bodies or associations for sharing information about problematic companies is proposed. This system would enable companies to avoid engaging with entities that have a history of non-compliance or other issues.

The idea is that even if a problematic entity switches carriers, their reputation will follow them, allowing for proactive risk management. In cases where entities exhibit deliberate non-compliance, stringent measures and stricter regimes may be necessary and implemented. These measures serve to protect against illicit transactions, uphold trade law and order, and act as a deterrent.

Failure to provide necessary data or cooperation could result in damaging repercussions for the non-compliant entity. In conclusion, the information highlights the vital role of data in customs control and security. Data analysis enables the identification of risks, helps prevent illegal activities, and promotes efficient processes.

The importance of strict control over firearm imports and responsible data management practices are emphasised. Additionally, the significance of sharing data, cooperating with customs, and implementing risk management systems within trade bodies or associations is underscored.

Arguments

Chavarria emphasizes the importance of a standardised global data model to facilitate e-commerce processes and improve data exchange, as well as for pre-arrival information for customs processes.

Supporting facts:

• He discusses the WTO data model and its goal of creating interoperability and a ‘customs language’ for exchanged data.

• He mentions the existence of reference data sets from China, the EU, and the US that can serve as standards.

• Chavarria identifies the issue of differing data set comprehensiveness among countries, resulting in a balance between too much and too little information.

Topics: Data standardization, E-commerce, WTO Data Model

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He mentions the establishment of e-commerce framework standards by the WTO, which are continuously updated to stay relevant.

Supporting facts:

• WTO has developed an e-commerce framework of standards, guided by eight principles and sixteen standards.

• The framework was approved in 2018, updated although since, and set to be reviewed every four years.

• Chavarria stresses that the framework isn’t static and must accommodate changes in technology and data management.

Topics: WTO, E-commerce, Standards

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Chavarria discusses the roles and responsibilities of different stakeholders in e-commerce.

Supporting facts:

• The last part of the WTO document Chavarria discussed allocates roles and responsibilities to all stakeholders involved in e-commerce.

• WCO aims to balance between imposing facilitation measures and defining responsibilities for the different stakeholders.

Topics: WTO, E-commerce, Stakeholders

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The definition of e-commerce can be complex and ever-evolving.

Supporting facts:

• WCO has a different approach to defining e-commerce compared to OECD, focusing more on goods.

• The concept of e-commerce is not always simple and is continually changing.

Topics: e-commerce, WCO, OECD, definitions

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Report

In a recent discussion, Chavarria highlights the importance of having a standardized global data model to enhance e-commerce processes and facilitate data exchange for customs procedures. He specifically mentions the WTO data model, which aims to establish interoperability and a common “customs language” for exchanging data.

Chavarria acknowledges that there are existing reference data sets from China, the European Union (EU), and the United States (US) that can serve as standards in this regard. However, he notes the challenge of differing data set comprehensiveness among countries, which requires finding a balance between providing too much or too little information.

The World Trade Organization (WTO) has also taken steps to address the need for standards in e-commerce through the development of an e-commerce framework. This framework is guided by eight principles and sixteen standards and was approved in 2018. Chavarria emphasizes that these standards are not static but are continuously updated to adapt to changes in technology and data management.

The framework is set to be reviewed every four years to ensure its relevance in the rapidly evolving e-commerce landscape. Furthermore, Chavarria discusses the roles and responsibilities of different stakeholders involved in e-commerce. The WTO document he refers to aims to allocate these roles and responsibilities among the relevant parties.

The World Customs Organization (WCO) plays a crucial role in this process by striking a balance between imposing facilitation measures and defining responsibilities for the various stakeholders. The definition of e-commerce itself is a complex and ever-evolving concept. Chavarria highlights that the WCO and the Organization for Economic Co-operation and Development (OECD) have differing approaches to defining e-commerce, with the WCO focusing more on the movement of goods.

This underscores the need to continually update and refine the definition to incorporate new developments and methodologies. The WCO’s commitment to staying up to date with the evolving nature of e-commerce is evident through their specific process for reviewing and updating the definition every four years.

This working group within the WCO is highly active, ensuring that the definition remains relevant in light of new technologies and methodologies. In conclusion, Chavarria’s discussion sheds light on the importance of a standardized global data model in improving e-commerce processes and data exchange for customs procedures.

The WTO’s development of an e-commerce framework, continuously updated standards, and the allocation of roles and responsibilities to stakeholders further support this goal. However, the complex and evolving nature of e-commerce necessitates the WCO’s commitment to regularly reviewing and updating the definition to ensure its relevance in a rapidly changing landscape.

Arguments

Data plays a vital role in ensuring safety, security, and customs compliance of the parcel delivery networks, reducing the environmental burden caused by returns and the destruction of e-commerce goods.

Supporting facts:

• 65% of e-commerce shipments entering the European Union were undervalued

• Data is required for customs control

Topics: e-commerce, Parcel Delivery Networks, Customs Compliance

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E-commerce has provided SMEs an opportunity to trade internationally, but access to tools, training, and systems often remains difficult and costly.

Supporting facts:

• Increased data requirements for international e-commerce pose a challenge for SMEs

Topics: e-commerce, SMEs, international trade

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The landscape of e-commerce has transformed drastically, causing a shift from bulk shipments to individual shipments, making customs declarations more complicated.

Supporting facts:

• Previously, bulk shipments needed only one data set and customs declaration

• E-commerce requires individual data sets and customs clearances for each product

Topics: e-commerce, customs, transformations

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In the strive for more efficient and accurate data, environmental responsibilities should not be forgotten. Digital is demanding an increasing share of Earth’s energy and is being linked with wasteful behaviour.

Supporting facts:

• 90% of all data in human history was created between 2017-2019

• Digital could improve living standards but right now is contributing negatively to the environment

Topics: Digitalization, E-commerce, Environment

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E-commerce growth is increasing rapidly and its future impacts are still not completely known

Supporting facts:

• The business from E-commerce is expected to more than double to $3.3 trillion per annum

• 3D printing creates issue on how to tax an item produced in a specific country not necessary the country where the software image is created

Topics: E-commerce, Environmental Impact

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Effort is needed to improve data quality and consistency

Supporting facts:

• Perfection may not be achieved but let’s not throw out good data in the quest for perfection

• Current data often lacks quality, consistency and is often delayed

Topics: Improvement Efforts, E-commerce

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Report

The analysis of the speakers’ arguments highlights the importance of data in the e-commerce industry. One of the main points raised is that data plays a vital role in ensuring the safety, security, and customs compliance of parcel delivery networks.

By providing accurate and comprehensive data, the environmental burden caused by returns and the destruction of e-commerce goods can be reduced. This is seen as a positive development for the industry. However, it is also noted that increasing data requirements pose challenges for small and medium-sized enterprises (SMEs) involved in international trade.

The speakers argue that while e-commerce has provided SMEs with an opportunity to trade internationally, the access to tools, training, and systems necessary to meet these data requirements remains difficult and costly. This negative aspect highlights the need for support and resources to enable SMEs to effectively participate in the e-commerce market.

Another notable point raised is the drastic transformation of the e-commerce landscape. In the past, bulk shipments only required one data set and customs declaration. However, with the shift towards individual shipments in e-commerce, each product now requires its own data set and customs clearance.

The speakers argue that this change has made customs declarations more complicated and poses a challenge for the industry. The rapid growth of e-commerce and its future impacts are also discussed. It is mentioned that the business from e-commerce is expected to more than double, reaching $3.3 trillion per annum.

However, the exact consequences and implications of this growth are still not fully understood. This neutral sentiment suggests that there is a need for further research and analysis to fully comprehend the future impacts of e-commerce. In terms of data quality, it is pointed out that current e-commerce data is often unreliable.

The speakers argue that 18% of respondents report paying customs duties on international online orders that are too low, indicating a lack of accuracy in the data. Moreover, the cultural and language diversity, inconsistent standards, and data security concerns create confusion and inconsistency in the interpretation of e-commerce data.

Therefore, efforts to improve data quality and consistency are deemed necessary. However, it is also acknowledged that strict regulations and standards may not always be beneficial for the e-commerce industry. Enforcing more regulations could burden businesses and customers. Instead, the speakers propose global collaboration and a balanced approach that considers multiple objectives and higher standards.

This negative sentiment towards strict regulations underscores the need for a flexible and collaborative approach to regulation in e-commerce. Lastly, the negative impact of digitalization on the environment is highlighted. While digitalization has the potential to improve living standards, the speakers argue that it is currently contributing negatively to the environment.

The increasing demand for digital services is linked to an increasing share of Earth’s energy consumption, and wasteful behavior is observed. This raises concerns about the environmental responsibilities associated with pursuing more efficient and accurate data in e-commerce. In conclusion, data plays a crucial role in ensuring the safety, security, and customs compliance of parcel delivery networks in e-commerce.

However, increasing data requirements pose challenges for SMEs involved in international trade. The transformation of the e-commerce landscape towards individual shipments has made customs declarations more complex. The rapid growth of e-commerce and its future impacts are still not fully understood.

Efforts are needed to improve data quality and consistency as the reliability of current e-commerce data is questioned. Balancing strict regulations and higher standards is important to avoid burdening businesses and customers. The negative environmental impact of digitalization is also a concern.

Overall, there is a need for further research, support, and collaboration to effectively navigate the complex landscape of data in e-commerce.

Arguments

Tony Magniston is the head of research at Cross Border Research Association, a Swiss based research institute focusing on supply chain security and trade facilitation research.

Supporting facts:

• Tony Magniston is introducing himself and the purpose of his organisation during the presentation

Topics: Cross Border Research Association, research, supply chain security, trade facilitation research

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The association is currently working on project Parsec aimed at countering the abuse of parcel and letter security for postal and express services for criminal and terrorist activities.

Supporting facts:

• Parsec is a 4.7 million euro project that will last 36 months

• There has been a massive increase in the volume of international parcels over the past two decades making it difficult to prevent crime and terrorism

Topics: postal security, express services, parcel

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The enforcement architecture developed involves a three-layer screening for imported international parcels, and data-driven risk assessment for the targeted parcels.

Supporting facts:

• The process will involve multi-energy photon-counting detector, X-ray diffraction and neutron-induced gamma-ray spectroscopy

• Facilities would be designed for optimal flow of parcels with selective controls for parcels that present the highest risk

Topics: parcel screening, risk assessment, customs compliance

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External data sources could add value to customs risk assessment in six identified ways, including enhanced cross-validation of information, early data access, and company information.

Supporting facts:

• Some identified sources include International Post Corporation, Orbis, Dan and Bradstreet, Universal Postal Union

Topics: customs risk assessment, external data sources

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Existing system collects price information and provides it to customers to determine appropriate value for imported goods

Supporting facts:

• Project with IBM developed a web crawling system to study price information

• Information collected from online platforms but not directly

Topics: e-commerce, custom declarations, importation

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Report

Tony Magniston is the head of research at the Cross Border Research Association, a renowned Swiss-based research institute that specializes in supply chain security and trade facilitation research. The association is currently undertaking a significant project called Parsec, which has a budget of 4.7 million euros and aims to address the misuse of parcel and letter security for criminal and terrorist activities in postal and express services.

This project comes as a response to the escalating volume of international parcels over the past two decades, which has made it increasingly challenging to prevent crime and terrorism in this field. To enhance parcel screening and minimize the risks associated with imported international parcels, the enforcement architecture being developed involves a three-layer screening process.

This process utilizes sophisticated technologies such as multi-energy photon-counting detectors, X-ray diffraction, and neutron-induced gamma-ray spectroscopy. The objective is to ensure the optimal flow of parcels while implementing selective controls for parcels that pose the highest risk. In addition to advanced screening techniques, the Cross Border Research Association highlights the value of leveraging external data sources for customs risk assessment.

Noteworthy sources identified include the International Post Corporation, Orbis, Dun and Bradstreet, and the Universal Postal Union. By incorporating external data, customs risk assessment can be further enhanced through enhanced validation of information, early access to data, and gaining valuable company information.

Männistö, a proponent of data-driven approaches to improve parcel screening, advocates for the use of external data sources, even going as far as suggesting that government agencies should be willing to invest in data access. This perspective acknowledges the potential challenges that arise from procurement rules, data privacy concerns, and data quality.

However, Männistö believes that utilizing data outweighs these barriers and presents significant benefits for improving parcel screening and overall security. Furthermore, an existent system has been developed, in collaboration with IBM, that collects price information from online platforms. The purpose of this system is to provide customers with the necessary information to determine the appropriate value for imported goods.

This contributes to efficient trade and ensures fairness in importation processes. Lastly, it is worth noting that Belgian customs may be particularly advanced in dealing with foreign online merchants. While no specific supporting facts were mentioned, this observation indicates that Belgian customs have likely implemented effective strategies and measures to address the challenges associated with cross-border e-commerce and maintain efficient operations.

Overall, the Cross Border Research Association, led by Tony Magniston, plays a crucial role in promoting supply chain security and trade facilitation research. Through initiatives like the Parsec project and the exploration of data-driven approaches, they aim to combat criminal and terrorist activities, enhance parcel screening, and support efficient trade practices.

The notable involvement of Belgian customs in dealing with foreign online merchants further highlights the importance of continuous innovation in adapting to the rapidly evolving landscape of international trade.