I’d like to thank everyone in the customs community for all the support and comments received during the course of this discussion in Part 1 and Part 2 of the WCO CTS Myth. Please continue to like and comment on these blogs as it is the only way the WCO will recognize the growing concern from the technology sector as they pursue a closed and highly competitive technology development agenda. We have a movement that is growing organically. One day maybe we can see some positive change here.
I had posted a blog at one time to use as a possible checklist for Risk Management functions. It’s based on the functionality my associates and I have developed and/or deployed over the years. It’s not all inclusive and I admit I’m not the formal expert or decision maker on what functions should be considered benchmarks or not. I can only present one idea. Feel free to challenge me by commenting at the end of this blog.
The objective here is to provide a checklist that can compare the WCO CTS offering with technologies available in the private sector. I know UNCTAD and the WCO will defend their systems and position that private sector offerings are expensive, difficult to deploy, etc.,etc.,etc. but those are competitive arguments for a different blog. We also touch on some of these points in Part 1 and Part 2 of the WCO CTS Myth.
Today we will be focusing on functions. The checklist itself can be accessed here. I’ve done my own scorecard on the WCO CTS. Here’s how I would suggest the CTS scores. (see image left).
Of course, I’m the one setting the rules here for a cross functional comparison. It’s not entirely fair, but I’m provoking discussion here and I’m open to being challenged. The WCO or the community should set what they believe to be the best practice. If we use what “I think” are the comparable features for targeting and selectivity, then the WCO CTS just doesn’t score very well. For the record, I did give them points where I scored the line item as “debatable”. Access a spreadsheet version of the checklist for use here.
I’m open to being challenged on 2 fronts here.
1) If the reader thinks my checklist is unfair or is missing certain functions, then please send me a note. Let’s configure this so it becomes as inclusive and fair as possible.
2) If the reader thinks I’ve missed giving points to the CTS where it deserves it, then please send me a note and I will promptly change the score. I’m all about making this as fair and as transparent as possible.
Recap: The WCO CTS scores very low (at best 16%). That’s easily a fail and confirms my assessment that the system is indeed a rudimentary approach to risk management, and targeting and selectivity. I’d further suggest we could look at the scoring outcome this way:
The WCO professes the CTS to be a complete, efficient, and effective solution. Based on this scorecard I’d say that’s a bit of an exaggeration and taken from the UNCTAD/ASYCUDA Playbook discussed in Part 1 of the WCO CTS Myth.
They further describe it as user-friendly, simple, powerful, affordable, and sustainable. They say everything is required to implement and sustain an effective cargo manifest risk assessment solution. Like a technology vendor, they state they will provide the hardware, data assistance, training, support, maintenance. The WCO is suddenly discovering that software development can be difficult. As one example, they’ve only obtained 40% of the cargo data in some countries. That goes a long way from the full visibility needed at the border. (Maybe goods aren’t being smuggled in the other 60%?) They’ve also started outsourcing their training, and many argue the support, maintenance, and upgrades seen to date are minimal to non-existent. Others will say it doesn’t matter (i.e. this is acceptable) because there is no direct purchase or license fees and the upgrades are free of charge. That brings us back to how the WCO blocks the technology sector discussed in in Part 1 and Part 2 of the WCO CTS Myth.
Let’s take a look at some user interfaces to discuss what the CTS can and cannot provide.
Screenshot 1: The WCO CTS Interface with typical query fields for accessing cargo data. (source: https://www.youtube.com/watch?v=t2AJisXaAkE)
Screenshot 2: The WCO CTS Cargo Details Screen. The CTS makes data available from a database, but no true automated risk assessment capabilities exist at this point. A targeting system provides a triage capability. This one does not and as such, the customs officer is still required to review every transaction (from the query result) and look for anomalies based on their intuition. This is a data visualization tool. It is not a clear targeting and risk assessment tool. (source: https://www.youtube.com/watch?v=t2AJisXaAkE)
Screenshot 3: An example of an advanced targeting user interface that provides enhanced border virtualization, supply chain visibility, tracking, automated profiling, and data exploitation capabilities. This system ingests more than CUSCAR formats and can link declarations (CUSDEC), container status messages, bayplans, conveyance and routing information, satellite and terrestrial information, and crew/passenger data when desired. An effective risk assessment decision is based on a more robust ontology. The CTS uses only one format of CUSCAR and integrates with less than 40% of the available cargo information to date. It’s difficult to see why this is efficient, effective and sustainable (per WCO marketing statements.) Like UNCTAD, the WCO will not openly compete against products like this (and others), because they simply can’t.
From my perspective, one represents a simple interface for database query. The other is an advanced data exploitation and analysis tool. One gives access to the data. The other provides access and ensures (though automated profiling) that the person reviewing is immediately focused on the highest risk data objects arriving at the border. I’d suggest one is rudimentary. One is not. Which one do you prefer?
The WCO states their CTS is “best practice”. Many don’t agree and I don’t see how you can unilaterally make a statement like that without doing the initial homework and analysis to define what functional requirements are truly deemed “best practice.” That’s like building a go-kart and saying, this type of transportation is best practice.
The Future
So while the WCO struggles with this development, they are getting help. US CBP and New Zealand Customs are providing the WCO with additional insight on how to advance and shape the product going forward. This is unfortunate news for the technology providers. Both US CBP and NZ are certainly advanced in their capabilities to identify high risk commercial shipments. Will the go-kart with a lawn mower engine be upgraded with more horsepower? At the end of the day, you can only add so much onto a go-kart.
Instead of attempting to build, maintain, and upgrade an in-house WCO System, why are the requirements not being drafted for those members who seek a risk assessment and targeting system? This would create a common and fair playing ground with a variety of options to deploy a targeting system (through insourcing, outsourcing, COTS, SaaS, using closed or open source licensing frameworks). The WCO approaches scanner technology this way, but for some reason everyone thinks they can build a targeting system using the UNCTAD/ASYCDUA closed source model. The WCO will always preface to say that a member can make their own decision and hire a systems integrator, or buy/deploy COTS, but the barrier to market entry is being layered with more fortification. Customers will always avoid a lengthy tendering process if they can opt for a no bid/sole source arrangement especially if the funding is covered by another member. As long as a system is free it doesn’t matter how rudimentary the product is. This is all about the barrier to market entry that has been created. It’s wrong and the WCO should pivot. The longer they retain this path, the more damaging it becomes on the integrity and reputation of this important institution.
Options – and Moving Forward
Risk management, and the approaches for targeting and selectivity are more complex than UNCTAD or the WCO realize at this moment of their maturity with technology. To help clarify, the WCO are well-equipped internally, and externally with all their customs members to be able to determine, in theory, what a targeting system should do. What they lack is the technical understanding of how to build it. The WCO has provided a wish list of functionality to a developer/company that has no domain experience. You need both capabilities within the same organization to build a proper functioning and robust architecture solution. The WCO has no technical expertise to direct the proper design, other than the functionality, which is only half the picture.
There is a way to do this right, and it requires a more holistic view than what is currently being designed and developed. Companies like GreenLine Systems, A-T Solutions, PAE, Tradebytes, SecureBorders Group, Windward, Intrasoft, SGS, Cotecna, Soget, Arctic Group, SBS, Bull, IBM, Oracle, Unisys, Cap Gemeni, Palentir, Concepto, Larus, and others etc. -have all worked on mission critical decision support solutions for government customers to help identify high risk trade. My colleagues and I have worked on developing targeting systems for customs purposes for 15+ years. Egos aside, I would argue we are closer to this technology-vertical than anyone else and have an extremely deep understanding of the methodologies that work, the traps to avoid, and the redundancies to eliminate. It’s been our niche specialty for many years. It never makes much sense for an organization like the WCO or UNCTAD to come out of the woodwork and declare themselves as experts in this paradigm. There are a lot of international experts out there that work as sole proprietors/consultants, and firms who build leading edge solutions in this space.
A targeting system supports the decision of the customs officer or analyst. It’s essentially a decision support system. As such, a holistic view is always best when making decisions at the border. The following diagram is a good example:
Do you think the WCO CTS is factoring in these variables? Not likely.
TFA Alignment?
The WCO is also doing what they can to support the WTO Trade Facilitation Agreement (TFA) with programmes to support Authorized Economic Operators, Single Window, and yes …Risk Management. To support Articles 7.1 and 7.4 we have the WCO CTS being promoted, just like what we’ve seen with WCO SAFE. If so, we may see more false advertising by suggesting the best way a country can comply with articles 7.1 and 7.4 of the TFA is through adopting the WCO CTS. Establishing a programme makes sense to support the TFA. Building a WCO technology to do it, is not.
The following diagram is how the WCO envisions aligning an ICT Strategy for the TFA. It makes sense if the technology requirements are tendered. Or does the WCO fancy itself as a technology shop? So far, the CTS program seems to indicate the latter.
The worst could be yet to come. I was told not to worry. The WCO will still allow me and the other technology vendors to attend (and pay for) a 3 day WCO IT Conference to showcase our wares to the member nations. They didn’t tell us what their agenda was for the other 362 days of the year but the indicators are troubling.
CTS as a stepping stone to ATS-I?
The US CBP Targeting and Selectivity System for inbound cargo is called ATS-N. As CTS continues to expose itself as a very rudimentary solution, and the architecture finally limits itself in possible add-on functions, there will likely be an end to CTS. The U.S. Department of State funds this effort, so it seems to some that a logical outcome would be to scrap CTS over time and replace it with ATS-I. ATS-I is a version of ATS that was built for U.S. partner or coalition countries. Generally, US CBP agrees to license and install the system but this is in exchange for sovereign data access from the receiving country. In addition to the data privacy and sovereignty concerns, it’s another troubling outcome that will continue a barrier to market entry for the technology sector. As the WCO is a Customs Cooperation Council, the WCO may have opened a Pandora’s box of complex policy issues that will take many years to navigate and unfold. More can be read about the versions of ATS here. We have to wonder if the CTS is only chapter 1 to this story.
U.S. Customs and Border Protection Analysts Reviewing Cargo with ATS. (source: https://epic.org/privacy/surveillance/spotlight/1006/csiplan.pdf)
More Irony
So while the WCO won’t outsource technology, they will outsource a project management training package tailor-made for officials in customs authorities tasked with implementing customs and trade modernization projects. Does anyone else find this weird? The WCO is full of technical and advisory expertise to build and deliver training, support, and provide guidance, -yet they now want to outsource it? Maybe they are too busy building technology now. From my perspective, the WCO has their role upside down. Maybe I’m in the wrong business. Maybe we should let the WCO build technology and the rest of us can build training packages.
The WCO mission statement says,
“the WCO provides leadership, guidance and support to Customs administrations to secure and facilitate legitimate trade, realize revenues, protect society and build capacity.”
It seems clear it is outside of the scope of the WCO to develop technology, given its mission statement. I don’t understand. Can somebody please enlighten me? The WCO hasn’t. I know the WCO is not going to like this commentary. It’s not personal. This is only about principle. It’s time to change.
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