Digital Transformation of Latin American Customs with Blockchain
Abstract
Isaias Cerqueda-Garcia
The use of paper in customs procedures generates inefficiencies, delays, and additional costs that negatively impact international trade. This study examines the impact of paper-based processes in the customs operations of Mexico's main trading partners in Latin America, revealing significant disparities among countries. For instance, Argentina reports document compliance times of up to 8 days, while El Salvador stands out for its efficiency, with processes taking as little as 13 hours. However, despite these differences, all customs administrations in the region share common deficiencies that highlight the urgent need for digital transformation. The research combines a quantitative analysis of document compliance times with a qualitative case study of the CADENA project, an innovative initiative led by the Inter-American Development Bank (IDB) and based on Blockchain technology. CADENA has proven to be an effective solution for modernizing customs processes, enabling secure and efficient data exchange between customs authorities, as well as real-time traceability of Authorized Economic Operator (AEO) certificates. The results of the project demonstrate that Blockchain not only reduces processing times but also automates procedures through the use of smart contracts, enhancing transparency and data integrity. Furthermore, CADENA has optimized the management of Mutual Recognition Agreements (MRAs), establishing itself as a cornerstone for the development of Customs 4.0. In conclusion, Blockchain technology emerges as a key enabler for the digital transformation of customs, streamlining processes, reducing costs, and strengthening regional competitiveness. It is recommended to expand the implementation of CADENA and explore new use cases, such as the generation of digital documents, to further advance toward more efficient and sustainable customs management.