Using blockchain technology, an English business chamber, Business West has certified an engineering company’s export consignment using blockchain. The company, Renishaw, manufactures precision devices for the healthcare and aerospace sectors.
Usually, a chamber of commerce issues a certificate of origin to endorse the place of manufacturing of goods for the customs authorities.
However, post-Brexit, if the UK no longer sticks to the EU Customs Union, it shall be run on complicated “rules of origin” where companies will have to submit proof of different places where machine parts of a particular product were made to benefit from preferential trade agreements.
Statistics show that various chambers of commerce issue a significant number of Certificates of Origin every year and this will rise sharply post Brexit.
Where does blockchain make a difference?
However, with the application of blockchain technology, such export documents could be fully digitized and shared, simplifying the process of checking the whole supply chain that includes bills of lading, customs declarations, and letters of credit.
A distributed ledger, accessible by an entire computer network, verifies transactions and will make export procedures more transparent and simpler. The current situation is such that to export goods to the Middle East, getting a valid letter of credit involves multiple people and paperwork which must be completed, tracked, and stored.
By contrast, once the blockchain solution gets implemented, any information on a particular consignment entered into a blockchain-based platform shall remain there permanently and may be tracked by way of a QR code. Moreover, no entry can be changed, altered, or manipulated, reducing the chances of false declarations.