Multi-million grant for digitization of international trade VU Economics Faculty to coordinate global research

Customs-related administrative burdens cost hundred of billions of euros worldwide every year. The European Commission is making a 5.8 million euro grant available for a large-scale international research project, the aim of which is to make international trade safer while reducing the administrative burden. VU Amsterdam is acting as the coordinating partner and will receive 2.1 million euros – the remainder will be divided between European universities, businesses and customs organizations collaborating in the project.

Information Technology for Analysis and Intelligent Design for E-government (ITAIDE) is an Integrated Project (IP), financed by the 6th Framework Programme of the EU. VU Amsterdam is going to coordinate the project, with four researchers under the leadership of Professor Yao Hua Tan. Tan is professor of Electronic Business at the Faculty of Economics and Business Administration. The Faculty has obtained the grant due to the extensive research expertise of its Information Systems department in the field of e-commerce, and particularly in designing electronic trade documents and procedures.

150 documents per container

There are some 150 different documents associated with one single container crossing a border. In the last few years, stricter security requirements, from the USA especially, have led to a large increase in the administrative burden. Last year, the European Commission launched the i2010 initiative in order to accomplish ‘administrative relief’ with the help of information technology. E-government is high on the Lisbon agenda. Customs, VAT and Duty details are currently all processed by separate information systems, even though the data is virtually identical. The challenge facing ITAIDE is to produce a new and sound design that can process these information flows more efficiently.

High-tech track devices

Tan and his consortium will investigate the issue of e-customs: how can customs documents and procedures be digitized and redesigned, and what business and administrative challenges may be encountered? An example is high-tech track devices, small units that can be attached to a container and which can store trade documents electronically. They not only record where the container is, but also its contents, and who is allowed access to it. The redesign of procedures is to be tested in case studies at large exporting firms in different European countries, such as Heineken and United Paper Mills, and the effects will be researched in, for example, Russia, the USA, China and Brazil. Working with tax and customs authorities, businesses and ICT developers at an early stage requires that new public-private partnerships are created, which increases the chances of newly designed documents and procedures actually being introduced. New network organization models will be developed during the project in order to help such public-private partnerships for e-customs to actually materialize.

Who is taking part?

Sixteen partners from various European countries are involved in the project. They include a number of universities, the United Nations CEFACT group and Dutch Customs, who play a leading role in the development of new customs procedures. The business world is also participating in the project, including Heineken, IBM and SAP. The results of the project will be used by the European Commission for developing e-customs in Europe, and worldwide by the United Nations for the development of electronic trade procedures.