By Pascal Minvielle, Chief Operating Officer at Webb Fontaine
The mission of customs has always been to prevent the entry of prohibited goods into the local market and to collect duties and taxes at the borders. Its role is crucial, especially in many countries where it is the primary source of revenue, helping states maintain economic stability.
Over the past 50 years, customs administrations have had to evolve to cope with increased trade volumes, secure the supply chain, and support the emergence of customs unions.
The role of the World Customs Organization (WCO) has been pivotal in this evolution. By developing international standards, particularly the Revised Kyoto Convention adopted in 1999, and ensuring their implementation, the WCO has simplified and harmonised customs clearance operations across many countries.
However, the simplification of customs processes has been truly effective only when technological advancements have been able to support them, that is, when declarants have been able to submit their customs declaration and make the payment from their office. This article offers an overview of the evolution of IT solutions that have enabled customs to absorb increased volumes, enhance compliance with regulations, and reduce bureaucracy.
Early automation
Due to its complexity, the automation of customs processes differs from that of, for example, income tax or VAT processes. A great variety of domains must be integrated within a single platform: manifest processing (inventory of goods on the means of transport), inspections, investigations, dispute management, accounting, tariff and customs value management, bonded warehouse control, etc.
Before 1980, in most countries, automation was limited to the use of desk calculators for determining duties and taxes. Declarations were made on paper with six carbon copies, and manual registers were commonly used to record the list of customs declarations and their processing. The customs tariff, which lists customs duty rates based on the type of goods, was present on every desk. Declarants followed a precise route from counter to counter.
From 1985, mainframe computers appeared in many advanced countries, allowing customs personnel to enter declaration data. Then, gradually, with the advent of more affordable desktop computers, each customs administration was able to equip itself with workstations.
By the late 1980s, the customs tariff was digitised, and manifest data were entered manually. Customs managed to reduce clearance time and became a provider of increasingly reliable foreign trade statistics.
From 1990 to 2000, computers were made available to declarants within the customs offices, in Direct Trader Input (DTI) units, allowing them to enter their declarations themselves. Banks opened branches in customs offices to speed up payments. This evolution was accompanied by legal provisions making paper declarations obsolete in favour of electronic declarations.
In terms of risk management, a rudimentary system based on static criteria directed transactions towards various types of control (documentary inspection, physical inspection, non-intrusive inspection) or simply towards exit without control. Customs value control, aimed at verifying that the declared value was not undervalued or overvalued, relied mainly on a comparison with the prices indicated on previously submitted paper invoices. The compilation of these reference documents and comparison were done manually by officers.
National connectivity and internet access
The early 2000s marked a major turning point with the arrival of national networks and fibre optics. Thanks to the connectivity of remote border posts, it became possible to link all customs offices to a centralised server, facilitating, in particular, the consolidation of statistics, the use of a single manifest nationwide, and the centralisation of credit accounts.
At border offices without infrastructure, declaration entry became possible using laptops connected to a solar panel and a simple VSAT antenna linked to the central server via satellite.
This period saw the emergence of One-Stop Border Posts (OSBP) created to facilitate passage at land entry and exit points.
Around 2005, with the rise of the Internet, any declarant with a connected computer could enter their customs declarations. Eliminating the need to physically go to customs, these developments led to a true revolution that also helped relieve congestion at customs offices. Specialised cybercafés also emerged, allowing informal declarants to complete their customs formalities.
At that time, documents accompanying the declaration (invoices, waybills, packing lists, etc.) were dematerialised, and electronic payment methods were introduced.
This article has been split into two parts. Read part two here.
Originally posted on WCO News. Access this article in English, French and Spanish.
About Webb Fontaine
Webb Fontaine is revolutionising international trade by empowering governments and communities with technology powered by AI. We offer comprehensive solutions across the trade spectrum, ranging from risk management to customs systems, single window, and beyond. Webb Fontaine is headquartered in Dubai, UAE with a presence across Europe, Middle East, South America, Asia and Africa.
