Customs & Border Management

Smarter Customs Risk Management solutions to tackle the counterfeit goods problem

The EU issued a press report on July 7th 2014, telling about Operation ERMIS which resulted in 70,000 counterfeit goods being seized in an EU joint customs operation*1.

Counterfeit products are a threat to local economies and undermine the ability of legitimate companies to compete in the market. Preventing the import of counterfeit goods therefore is a matter of protecting the nation´s economic interests.

The problem around counterfeit goods is immense. For example, a report from June 2014 estimated that Illicit trade in cigarettes (counterfeit and contraband) costs the EU an amount of 10,9 Billion Euro of lost tax revenue. *2

This report covers only cigarettes. Counterfeit goods include also clothes, watches, perfumes and more. Thus the problem is immense.

Normally when a problem is immense, there are multiple solutions. And such is the case here as well. Solutions for the counterfeit problems include for example education of the population (not to consume counterfeit products), changes in tax levels to reduce the incentive for trade in counterfeit goods and smarter solutions for customs risk management, increasing the probability that customs targeting officers, intelligence officers and border control officers will detect the shipments upon importation or will even be able to prevent it by tracking the parties involved.

In an IBM Point of View (PoV) about solutions for Customs Risk Management, we argue that much can be achieved by using analytics and event-based processing techniques, to complement rule-driven solutions. We also argue that technology alone is not enough; change management is a vital element in customs’ strategy for integrated risk management and analytics, along with the introduction of new technologies.

The full PoV is available via this URL:

http://www.ibm.com/common/ssi/cgi-bin/ssialias?subtype=WH&infotype=SA&appname=SNDE_UV_UV_USEN&htmlfid=UVW12361USEN&attachment=UVW12361USEN.PDF

The WCO (World Customs Organization) recognized IBM´s leadership in this domain by publishing a slightly adapted version of this PoV in the WCO News Magazine, volume 68 (June 2012). This version is available on the following URL (the full edition is available on the WCO website):

http://baida.nl/Assets/papers/201206_WCO_news_IBM_article.pdf

For an in-depth discussion about IBM risk management solutions for Customs administrations, contact your local IBM client representative or contact me.

 

*1   http://europa.eu/rapid/press-release_IP-14-776_en.htm

*2   http://www.kpmg.co.uk/email/06Jun14/OM014549A/PageTurner/files/assets/common/downloads/Project%20Sun.pdf

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