Skip to main content
SpringerLink
Log in

Towards a Blockchain Solution for Customs Duty-Related Fraud

  • Conference paper
  • First Online:
Database Systems for Advanced Applications. DASFAA 2022 International Workshops (DASFAA 2022)

Part of the book series: Lecture Notes in Computer Science ((LNCS,volume 13248))

Included in the following conference series:

  • 1023 Accesses

Abstract

Customs duties are meant to control the flow of goods across international borders and represent a significant source of government revenue. In many parts of the world, the enforcement of customs duties is labor-intensive and fraught with inefficiencies, fraud, and corruption, leading to a substantial loss of revenue. We propose a blockchain model built on Hyperledger Fabric that can reduce some of these hindrances and pay for itself quickly through more efficient transactions and a reduction in opportunities for fraud. We illustrate how permissionless blockchain models are a better fit for international trade and show how ordered transactions in a blockchain can help reduce fraud related to avoiding duties on the import and export of goods. Last, we conduct some benchmarking on the scalability of our proposed model and examine some of the effects it may have on performance.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 79.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 99.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

References

  1. Tax Foundation. New European commission report: vat gap. https://taxfoundation.org/vat-gap-eu-europe-2020/

  2. European Commission. Tax and customs union. https://ec.europa.eu/taxation_customs/vat-gap_en

  3. Pierce, J.R., Schott, P.K.: A concordance between ten-digit US harmonized system codes and SIC/NAICS product classes and industries. J. Econ. Soc. Meas. 37(1–2), 61–96 (2012)

    Article  Google Scholar 

  4. Saberi, S., Kouhizadeh, M., Sarkis, J., Shen, L.: Blockchain technology and its relationships to sustainable supply chain management. Int. J. Prod. Res. 57(7), 2117–2135 (2019)

    Article  Google Scholar 

  5. Chang, Y., Iakovou, E., Shi, W.: Blockchain in global supply chains and cross border trade: a critical synthesis of the state-of-the-art, challenges and opportunities. Int. J. Prod. Res. 58(7), 2082–2099 (2020)

    Article  Google Scholar 

  6. Juma, H., Shaalan, K., Kamel, I.: A survey on using blockchain in trade supply chain solutions. IEEE Access 7, 184115–184132 (2019)

    Article  Google Scholar 

  7. Okazaki, Y.: Unveiling the potential of blockchain for customs. In: WCO Research Paper No 45 (2018)

    Google Scholar 

  8. Ainsworth, R.T., Shact, A.: Blockchain (distributed ledger technology) solves VAT fraud. In: BU. School of Law, Law, and Economics Research Paper, pp. 16–41 (2016)

    Google Scholar 

  9. McDaniel, C.A., Norberg, H.C.: Can blockchain technology facilitate international trade? In: Mercatus Research Paper (2019)

    Google Scholar 

  10. Visser, C., Hanich, Q.: How blockchain is strengthening tuna traceability to combat illegal fishing The Conversation, pp. 1–4 (2018)

    Google Scholar 

  11. Juma, H., Shaalan, K., Kamel, I.: Customs-based blockchain solution for exportation protection. In: Shen, H., Sang, Y. (eds.) PAAP 2019. CCIS, vol. 1163, pp. 405–416. Springer, Singapore (2020). https://doi.org/10.1007/978-981-15-2767-8_36

    Chapter  Google Scholar 

  12. Vos, D., et al.: DEFenD: a secure and privacy-preserving decentralized system for freight declaration (2018). arXiv preprint arXiv:1803.09257

  13. Wu, B., Li, Y., Liang, X.: A smart contract-based risk warning blockchain symbiotic system for cross-border products. In: Chao, K.-M., Jiang, L., Hussain, O.K., Ma, S.-P., Fei, X. (eds.) ICEBE 2019. LNDECT, vol. 41, pp. 274–289. Springer, Cham (2020). https://doi.org/10.1007/978-3-030-34986-8_20

    Chapter  Google Scholar 

  14. De Angelis, S.: Assessing security and performances of consensus algorithms for permissioned blockchains (2018). arXiv preprint arXiv:1805.03490

  15. Soelman, M., Andrikopoulos, V., Pérez, J.A., Theodosiadis, V., Goense, K., Rutjes, A.: Hyperledger fabric: evaluating endorsement policy strategies in supply chains. In: 2020 IEEE International Conference on Decentralized Applications and Infrastructures (DAPPS), pp. 145–152. IEEE (2020)

    Google Scholar 

  16. Harris, C.G.: Using Hyperledger fabric to reduce fraud in international trade. In: 2021 IEEE International Conference on Artificial Intelligence and Blockchain Technology (AIBT). IEEE (2021)

    Google Scholar 

  17. Widdowson, D.: Bordering on corruption: an analysis of corrupt customs practices that impact the trading community. World Customs J. 7(2), 11–21 (2013)

    Google Scholar 

  18. Ferreira, C., Engelschalk, M., Mayville, W.: The challenge of combating corruption in customs administrations. Many Faces Corruption 11, 367–386 (2007)

    Google Scholar 

  19. IBM and Maersk: The paper trail of a shipping container. Infographic (2017). https://www-01.ibm.com/common/ssi/cgi-bin/ssialias?htmlfid=XI912347USEN

  20. Wolf, R.: VAT carousel fraud: a European problem from a Dutch perspective. ntertax 39(1), 30–31 (2011)

    Google Scholar 

  21. Montecchi, M., Plangger, K., Etter, M.: It’s real, trust me! Establishing supply chain provenance using blockchain. Bus. Horiz. 62(3), 283–293 (2019)

    Article  Google Scholar 

  22. Dinh, T.T.A., Wang, J., Chen, G., Liu, R., Ooi, B.C., Tan, K.L.: Blockbench: a framework for analyzing private blockchains. In: Proceedings of the 2017 ACM International Conference on Management of Data, pp. 1085–1100 (2017)

    Google Scholar 

  23. Androulaki, E., et al.: Hyperledger fabric: a distributed operating system for permissioned blockchains. In: Proceedings of the thirteenth EuroSys Conference, pp. 1–15 (2018)

    Google Scholar 

  24. Baliga, A., Solanki, N., Verekar, S., Pednekar, A., Kamat, P., Chatterjee, S.: Performance characterization of hyperledger fabric. In: 2018 Crypto Valley Conference on Blockchain Technology (CVCBT), pp. 65–74. IEEE (2018)

    Google Scholar 

  25. Thakkar, P., Nathan, S., Viswanathan, B.: Performance benchmarking and optimizing hyperledger fabric blockchain platform. In: 2018 IEEE 26th International Symposium on Modeling, Analysis, and Simulation of Computer and Telecommunication Systems (MASCOTS), pp. 264–276. IEEE (2018)

    Google Scholar 

  26. Yusuf, H., Surjandari, I.: Comparison of performance between Kafka and raft as ordering service nodes implementation in Hyperledger fabric. Int. J. Adv. Sci. Technol. 29(7s), 3549–3554 (2020)

    Google Scholar 

  27. Nguyen, M.Q., Loghin, D., Dinh, T.T.A.: Understanding the scalability of Hyperledger Fabric (2021). arXiv preprint arXiv:2107.09886

  28. Hyperledger Caliper. https://www.hyperledger.org/projects/caliper

  29. Cahill, M.J., Röhm, U., Fekete, A.D.: Serializable isolation for snapshot databases. ACM Trans. Database Syst. (TODS) 34(4), 1–42 (2009)

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. School of Mathematical Sciences, University of Northern Colorado, Greeley, CO, 80639, USA

    Christopher G. Harris

Authors
  1. Christopher G. Harris
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Christopher G. Harris .

Editor information

Editors and Affiliations

  1. University of Aizu, Aizu, Japan

    Uday Kiran Rage

  2. Indraprastha Institute of Information Technology, Delhi, India

    Vikram Goyal

  3. Data Sciences and Analytics Center, International Institute of Information Technology, Hyderabad, Telangana, India

    P. Krishna Reddy

Rights and permissions

Reprints and permissions

Copyright information

© 2022 The Author(s), under exclusive license to Springer Nature Switzerland AG

About this paper

Check for updates. Verify currency and authenticity via CrossMark

Cite this paper

Harris, C.G. (2022). Towards a Blockchain Solution for Customs Duty-Related Fraud. In: Rage, U.K., Goyal, V., Reddy, P.K. (eds) Database Systems for Advanced Applications. DASFAA 2022 International Workshops. DASFAA 2022. Lecture Notes in Computer Science, vol 13248. Springer, Cham. https://doi.org/10.1007/978-3-031-11217-1_9

Download citation

  • DOI: https://doi.org/10.1007/978-3-031-11217-1_9

  • Published:

  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-031-11216-4

  • Online ISBN: 978-3-031-11217-1

  • eBook Packages: Computer ScienceComputer Science (R0)

Publish with us

Policies and ethics

Search

Navigation