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Government rules out blockchain at borders until after Brexit due to 'significant work' required

A previous HMRC pilot of distributed ledger technology will not provide any short-term solution to issues around UK borders after Brexit

The government has ruled out use of blockchain at UK borders until after Brexit, citing the “significant work” that would be needed.

HM Revenue & Customs (HMRC) ran a six-week proof-of-concept trial of the distributed ledger technology in 2017, to assess its use for coordinating customs activities at borders. The trial was deemed a success, but the government has now said it will not lead to any further work until the UK leaves the European Union.

Financial secretary to the Treasury Mel Stride revealed in answer to a parliamentary question that blockchain may be revisited in future, but it’s likely to require a lot of work.

“Any significant implementation of blockchain would require significant further work by HMRC. Further work on the application of blockchain to Authorised Economic Operator status is deferred until after the UK leaves the EU when timescales and cost will be revisited,” he said.

Stride added that the results of the HMRC trial are being used in the department’s Future Borders programme.

“The pilot focused on building a single ‘permissioned’ blockchain that could be used to inform a trader’s Authorised Economic Operator status. The proof of concept ran for six weeks, and established that government could use blockchain to securely share the results of sensitive risk checks to improve the efficiencies of certain customs processes,” he said.

“We are working with the cross-government Future Borders programme to progress the pilot as part of their Trusted Trader initiative.”

The use of technology has been frequently cited as a potential solution to the problems surrounding the Irish border when the UK exits the EU.

Chancellor Philip Hammond told the Conservative Party conference in October last year: “There is technology becoming available. I don’t claim to be an expert on it, but the most obvious technology is blockchain.” His comments were widely received with scepticism from tech experts.

In a report last September, the House of Lords European Union (EU) Committee also expressed its concerns about government’s plans to rely on technology to solve any customs issues at the border post-Brexit, saying tech “does not yet provide the answer”.

The Public Accounts Committee has also raised worries about HMRC’s ability to get its existing systems ready for Brexit, with 11 out of 12 critical border IT systems at risk of not being ready, according to an October report from the National Audit Office.

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