The Committee on International Trade adopted an
own-initiative report by Emma MCCLARKIN (ECR, UK) on the
blockchain: a forward-looking trade policy.
The Committee on Industry, Research and Energy and the
Committee on Civil Liberties, Justice and Home Affairs, exercising
their prerogatives as associated committees in accordance with Rule
54 of the Rules of Procedure, also gave their opinions on the
report.
In the report, the blockchain is considered as
a private, permissioned distributed ledger technology (DLT),
comprising a database made up of sequential blocks of data that are
added with the consensus of network operators.
Blockchain technology offers the potential to improve
trust and confidence in the current trade system by providing an
immutable record of transactions. Members stated that there are at
least 202 government blockchain initiatives in 45 countries
around the world and economies in regions of Asia-Pacific, the
Americas and the Middle East, in particular, are investing in
blockchain technologies for trade.
According to Members, the blockchain may:
- enhance and improve EU trade policies, such as Free
Trade Agreements (FTAs), Mutual Recognition Agreements (MRAs),
particularly of Authorised Economic Operators (AEOs), data adequacy
decisions and trade defence measures;
- support the trade and sustainable development
agenda by providing trust in the
provenance of raw materials and goods, transparent production
processes and supply chains, and in their compliance with
international rules in the field of labour, social and
environmental rights;
- enable customs authorities to automatically obtain the
required information for a customs declaration, reduce the need for manual verification and paper
trails, and provide a precise update on the status and
characteristics of goods entering the EU to all relevant parties
simultaneously;
- monitor the origin of goods and their manufacturing conditions, reduce the costs
of transactions, insurance and logistics, remove intermediaries,
increase trust between transacting parties, and combat contraband
and the entry of illegal goods;
- improve transparency and traceability throughout the supply chain, raise the level of
participant trust in a given network;
- reduce the costs of
supply-chain management by removing the need for intermediaries and
their associated costs, along with the physical requirement to
produce, transport and process paper documentation;
- improve the application of correct duty and VAT
payments and revenue collection within trade policy, and g.
reducing the total time goods are in transit by automating
tasks that are typically accomplished through manual
means.
Recognising the challenge
posed by the relationship between blockchain technologies and the
implementation of the EU data protection framework, namely the
General Data Protection Regulation (GDPR), Members stressed the
need to ensure that blockchain fully conforms with the EU’s
data protection framework and fully respects the principles set out
in EU law.
In conclusion, the
report called on the EU and its Member States to play a leading
role in the process of standardisation and security of
blockchain and to work with international partners and all relevant
stakeholders and industries to develop blockchain standards.
The Commission shall explore security challenges as
cybersecurity is essential for applications that use distributed
ledger technologies, including in international trade.
The Commission is invited, inter alia,
to:
- follow developments in the area of blockchain, in
particular the ongoing pilots/initiatives in the international
supply chain, and the external aspects of customs and regulatory
processes;
- produce a horizontal strategy document
involving relevant DGs on adopting blockchain technologies in trade
and supply-chain management as well as in the area of intellectual
property and in particular regarding the fight against
counterfeiting;
- assess the judicial and governance aspects of
blockchain and whether blockchain offers
better solutions to existing and emerging technologies that can
address current challenges in EU trade policy;
- develop a set of guiding principles for
blockchain application to international trade, in order to provide
industry and customs and regulatory authorities with a sufficient
level of legal certainty that encourages the use of blockchain and
innovation in this area;
- work with the Member States to launch and supervise
pilot projects using blockchain technology in international
trade, in order to test its benefits;
- set up an advisory group within DG Trade on
blockchain and to develop a concept note for private permissioned
pilot projects on the end-to-end use of blockchain in the supply
chain;
- conduct policy investigations into how blockchain can
modernise the Union’s trade defence policies to strengthen
their legitimacy and enforcement;
- work with relevant stakeholders in order to review and
develop a framework for addressing challenges to
interoperability and compatibility between blockchain
systems.
The report welcomed the launch of the
‘EU Blockchain Observatory and Forum’. It
requested that the Commission explore the possibility of expanding
the mandate of the EU Blockchain Observatory and Forum and involve
relevant local and global stakeholders to address upcoming
challenges and foster the support of decision-makers.