Can Blockchain solve Brexit's border puzzle? Experts are sceptical

BRUSSELS (Reuters) - A team of experts has come up with a plan to use blockchain tracking for trade between Northern Ireland and the Republic of Ireland to avoid the re-imposition of a hard border after Britain leaves the European Union.

FILE PHOTO: View of the border crossing between the Republic of Ireland and Northern Ireland outside Newry, Northern Ireland, Britain, October 1, 2019. REUTERS/Lorraine O'Sullivan/File Photo

The ELAND consortium said on Monday that its proposal would involve building a secure freight transit system based on digital-locking containers, GPS routing records, automated certification and anti-tampering enforcement with every detail recorded in a blockchain time-series database.

“In essence, it is a bonded warehouse on wheels, and cuts the Gordian knot of how the UK can both leave the EU and maintain the guarantees set out in the Good Friday Agreement,” ELAND CEO Charles Le Gallais said in a statement.

“We are enabling the seamless movement of goods across borders to continue without the need for an Irish backstop,” said Le Gallais, a former British soldier whose team includes business leaders, haulage experts and technology engineers.

Le Gallais told Reuters that British Brexit officials and the Irish parliament had been briefed on the plan.

A British government spokesman, asked about the plan, said: “The government is grateful for all input in this matter, which it considers carefully.”

In Dublin, a spokesman for the Irish government said: “We have no comment to make on this proposal.”

Razat Gaurav, chief executive office of Llamasoft, which produces software to help companies around the world manage and structure supply chains, said the plan would provide visibility of what is crossing the border, and security. However, if it is too complex, industry wouldn’t use it.

Manufacturing Northern Ireland, a group that campaigns to reduce the cost of doing business, dismissed it as only viable for valuable or sensitive goods such as alcohol or medicines.

The Irish border is the main stumbling block for Britain’s divorce from the EU, which Prime Minister Boris Johnson says must happen on Oct. 31 even without a deal.

Last week Johnson proposed that, after Brexit, Northern Ireland would remain aligned with the EU’s single market for trade in animal, food and manufactured goods but would leave the EU’s customs union along with the rest of the UK.

This would inevitably require some form of border checks to preserve the integrity of the single market. The Johnson proposal says there would still be no need for physical infrastructure on the border thanks to alternative arrangements for checks, including monitoring technology.

EU officials have been sceptical of British suggestions that technology could do the job because London has not demonstrated that such solutions even existed.

ELAND said its proposal was based on “proven technology”, would be demonstrable within three months and could be fully implemented within one year.

Manufacturing Northern Ireland Chief Executive Stephen Kelly said the plan might work for rigid lorries that can be digitally locked at loading point, but it’s not clear how it would work for other vehicles such as curtain-side trailers and tankers.

It would also require customs officials to trust operators not to smuggle and to be truthful about the content of their trucks, and he doubted that the owners of Northern Ireland’s 140,000 lorries would invest in the equipment needed.

“If this was a viable idea, Sweden-Norway, USA-Canada borders would be already using it and both are world leaders in transport tech,” Kelly said.

Llamasoft’s Gaurav said that, based on his experience elsewhere in the world, if industry finds the tracking system too cumbersome it won’t adopt the technology.

“They try to find ways to work around it,” he said. “And then you’re back to a physical check.”

Additional reporting by Kate Holton in LONDON; Editing by Giles Elgood