2-year R&D grant for the e-Origin project

Blog - 2-year r&d grant for the e-origin project

Reducing the risk associated with customs declarations and speeding up the declaration process is the promise of the European e-Origin platform.

This 2 year research project is funded by the Walloon region and led by e-Origin together within a consortium of two universities and two customs brokers.

For the Walloon region, this international initiative is strategic to defend, with Liege airport, its position as a strategic European logistics center and e-commerce hub, operating the most flexible cargo airport in Europe, and its leading position in customs expertise.

For e-Origin, it means setting up a European digital solution that will reduce the risk of non-compliance in e-commerce and speed up declaration procedures for customs brokers.

With the expertise of researchers from the University of Mons in artificial intelligence and customs experts from the University of Liège, e-Origin is working on an optimal solution that meets the challenges of tomorrow’s customs declarations in e-commerce.

The reasons that led to the launch of our research project

In recent years, the e-commerce boom has caused the number of parcels going through customs to explode. Since Covid-19, the number of small packages has continued to skyrocket, increasing the volume of cross-border shipments from non-EU countries, such as China. 

Exporting companies contract customs declarants to represent them, complete the customs declaration, and also take responsibility for what is declared to customs. With the number of parcels increasing, the risks they take become very high, and in this context, they must be able to protect themselves, limit the risks they take in one way or another. The difficulty is to deal with large volumes over a very short period of time, with unreliable declarative data because they come from multiple players in the supply chain.

This situation has revealed numerous cases of non-compliance in import customs declarations. The fraud detected or non-compliance can quickly amount to hundreds of millions of euros in financial penalties for a single customs declarant and its contractor. Even today, it is difficult to gather the right supporting elements for e-commerce declarations and therefore the customs controls slow down the logistics operations on the ground.

In practice, it is impossible to apply the traditional customs compliance methods and rules to e-commerce, which are usually applied to regular general cargo imports. The compliance of declarations is a challenge for operators in a constantly evolving national and European legislative context which leads to the development of new declarative systems and the use of new data sets. 

In this context, e-origin has launched this research project to provide reliable and efficient tools to improve customs compliance for all stakeholders involved in e-commerce.

An ideal location for our research project: Liège Airport

Liège Airport is the hub for Cross-Border E-commerce in Europe and getaway to China. Liege Airport has been growing steadily for several years to reach more than one billion e-commerce shipments that are cleared each year, mainly from China. This represents several hundred million declarative lines in B2C and B2B2C. 

For our research project, we couldn’t expect a better place to field test our solution in an environment that represents e-commerce in Europe and which benefits from the support of the regional and federal Belgian customs. 

Reliability of data in a customs declaration is a real challenge

Let’s understand the challenge better. When a foreign manufacturer exports to Europe, a whole chain of actors exchanges information to get through customs.  But the legislation is quite complex. It is a nightmare for declarants and customs to collect and verify information to have a compliant customs declaration…  

Why? Because 

  • Online sellers are afraid to share confidential information 
  • Critical information for the customs compliance are not clearly identified or not easily accessible
  • Shipment information are not properly filled out (intentionally or not…)
  • Difficult to trust. There are many unscrupulous actors, especially in e-commerce, who do not hesitate to falsify information or give wrong information about the value or the characteristics of  the products for example.

And all this consumes time and generates significant costs. 

We need an efficient collection of reliable data on goods. We solve this problem by offering a solution that provides reliable information, following a collaborative approach that allows actors to progressively enrich and certify product information and make it available online, securely. 

The solution has the following characteristics

  • To be adapted to international trade for customs declaration compliance. We are working with customs experts of the University of Liege (HEC executive with Customs Trade Law Academy) to set up a customs compliance data set that will serve as a reference for the collection of evidences on a declaration.
  • To allow the exchange of digital proofs that are verifiable and have a legal value because they are digitally signed
  • To be open and interoperable so it follows the current standards in the field
  • To be able to exchange information securely over the Internet between different service providers.

Contribution of research to customs compliance

The research orientation of the University of Liege (HEC-CTLA) is resolutely operational through the integration of the following dimensions

  • Discovery and confirmation of new risks
  • Mechanisms that drive decisions (the right ones and others) and validate them
  • Control, fraud and litigation aspects
  • The integration of customs processes, strategically in the company’s operations

On the academic level the University of Liege is focused on a legal aspect of customs clearance. Analyzing the European jurisprudence cases will allow better identification of the proofs required by the customs authorities in case of control or litigation.

Knowing the risks precisely in daily operations and at a strategic legal level will help customs brokers to set up an internal control process and make the right decisions when filing the customs declarations.  Of course e-Origin solutions are integrating these elements in order to automate the process as much as possible.

The combined research of the University of Liege and Mons and the support of the Belgian customs will allow them to better identify the declarative anomalies and to participate, thanks to these results, to the elaboration of a solution that will help the customs broker, during the declarative process.

Contribution of research on artificial intelligence 

A first level is the conformity of a declaration: checking that each data element is correctly filled in with information that makes sense (and that this information is reliable). This artificial intelligence helps to identify anomalies in this compliance.

A second level is the risk analysis system. This risk will allow the customs declarant to assess, understand and correct potential problems that may define a declaration as fraudulent in the eyes of customs. Artificial intelligence will help predict the correct classification of the imported goods for example.

The perspectives of the research project in the coming years. 

The project started on May 1, 2021. It is a 2-year innovation project and we aim to quickly valorize the most urgent first elements during the project. 

In this matter, the e-Origin project aims to provide in the very short term a conformity analysis of goods imported into Europe for all declarants in Belgium, with e-commerce as a target domain in the first instance. Artificial intelligence and reliable information will quickly complete this risk analysis in the coming months. 

As we are based at Liege airport, it is obvious that the airport’s registrants will be the first to benefit from this solution. This is an excellent opportunity for the airport because the solution will contribute to secure e-commerce flows for a healthy growth of the airport. All the airport’s stakeholders will benefit from this.

Our ambition is then to take the project beyond the Belgian borders, in Europe, in the next two years.