Advanced Technologies for adopting a Risk management strategy

Frank Callewaert - Global Technology Strategist Digital Transformation in Customs and Trade Business Drivers

Increasing Expectation New for Frictionless business models customs operations (eCommerce, 3D Print, Digital platforms e.g.) Demand for more Global shifts in accountability growth and trade and & transparency across focus on supply chain Customs Ecosystem security

Disruptive Paperless Need to improve innovation and Predictable customs Customs compliance technology (IoT, operations and fraud detection Blockchain, AI etc.) Digital Customs Roadmap a phased approach

Where we come from Where we want to be

Intelligent globally connected eCustoms & eTrade

• Phase 1: Capture Information Electronically & Process • Phase 2: Analyze, Declare & Collaborate Information with Customs • Phase 3: Connect All Stakeholders Capture Information Electronically & Process Capture Information Electronically & Process

PowerApps Capture Information Electronically & Process

Documents Cognitive skills Fully text-searchable rich index

Key Phrase extraction Location entity extraction Sentiment analysis

Organization entity extraction Persons entity extraction Language detection

Face detection Celebrity recognition Tag extraction

Custom skills Landmark detection Printed text recognition https://jfk-demo.azurewebsites.net/#/ Internet of Things is everywhere A Simple View of an IoT Solution

Things Data & Insights Actions Intelligent Cloud

Intelligent Edge

Cargo tracking Livestock & Pets Pets Livestock Freight Airplanes Buses Fleet monitoring Origin Tracking Predictive maintenance Health & Vaccines Arrival predictions Tracking of Trucks Trains Transport conditions Vaccinations Shipping timber/lumber Location Intelligence for Transportation Smart seals Location Traffic Systems Engines Digital Twins

Public Safety Surveillance Security Augmented reality

Communications Drones Equipment Warehouse Worker Safety Wearables

Identify and monitor threats Internet of Things for eCustoms Site Security and Surveillance Car plate – Container identification Traceability from producer to Buyer People traceability– Site access control Food Safety Movement Pattern detection Multilayer Origin Tracking - Quality attestation MFA and Smart Badging Smart Seals Factories QR – RFID Counterfeit & Fraud detection 100% Scanning Multilayer QR & RFID Warehouse Stocking conditions Smart seals Agriculture Port Cranes Buyer Augmented Reality Digital Twins DATA & AI driven Digital Customs ’s approach to AI adoption Risk Management Framework (RMF) & DATA

PPT 12 REM PPT DATA & AI driven Digital Customs

IoT & Big Data

Cloud

Machine Learning

Risk management Reactive: Example Historical reputation

Store on Data Lake or Query using Cosmos DB Spark

Requirement: Long term data storage and flexible retrieval The Data Lake Approach

Ingest all data Store all data Do analysis regardless of in native format Using analytic requirements without schema engines like Hadoop definition and ADLA

Devices Batch queries Interactive queries Real-time analytics Machine Learning Data warehouse Storage

Hadoop compatible file system interface for Azure Blob Storage Fine grained file and folder permissions (ACLs) Atomic file system operations Full support for all Blob features (AAD Integration, Zone Redundant and RA-Geo Redundant Storage)

Strong Partner Support Learn more. Azure Cosmos DB Microsoft’s globally-distributed database service Introducing Azure Cosmos DB A globally distributed, massively scalable, multi-model database service

TableTable APIAPI

Column-family Document

Key-value Graph

Guaranteed low latency at the 99th percentile Elastic scale out of storage & throughput Five well-defined consistency models

Turnkey global distribution Comprehensive SLAs Machine Learning finds patterns in data then uses those patterns to predict the future Risk management: Activity Based Monitoring

Movements Suspicious in area Meeting behaviors Use of Machine learning to discover anomalous behaviors in real world transactions or processes Risk management: predictive model

Machine Learning: Applied artificial intelligence on realtime data stream

Predict Detect Predict Positions Anomalies Global Risk Predict positions within 30 min predictive realtime What is HP-IMS

IMS = Integrated Maritime Services, EMSA’s core platform for the EU’s ‘Integrated Maritime Picture’ of ship positions, tracks and behaviours Scope of the HP-IMS Phase 2

➔ Four focus area’s

Performance, R/T R/T & Long Term Capacity, Maritime Historic Storage & Agility & Picture ABMs Queries Security Bing image search Speech API Entity linking Customer feedback analysis Bing Speech news search

Text to speech Custom recognition Machine Forecasting Language Recommendation (CRIS) API Learning

Text analytics

Thumbnail Academic Spell generation Cognitive Services knowledge check

Web language model

Bing Computer Knowledge autosuggest vision Vision

Emotion

Anomaly Sentiment Search detection scoring OCR, tagging, captioning Bing web search Technology can perceive the world

Perception Comprehension

35 Cognitive Services Machine Vision Learning

Visual Recognition Intelligent Service makes it easy to build a custom image classifier. For example: • Identify whether a photo includes a picture of your product • Differentiate between genuine versus counterfeit https://visionaidevkit.com/

Border Protection with automated Video Surveillance

Microsoft Kinect – the visual recognition system Vision API – Recognize People and Objects Video indexer: CCTV detection of people and suspicious behavior Custom Vision: customize your own state-of-the-art computer vision models for your unique use case Discover Explosives & Radiation detections INTRODUCING CORSYS: THE FUTURE OF SECURITY OPERATIONS

THE OVERALL PLATFORM – DIGITALLY ACCELERATING YOUR OPERATIONS

CASE OPERATIONS 01 MANAGMENT 02 PROFILER 03 DECISION CENTRE 04 OPTIMISER

SPLIT INTO 5 RISK CATEGORIES, CUSTOMISABLE TO SPECIFIC PORT PROCESSES

NON-PHYSICAL ANALYSIS & INSPECTION AUTOMATED RISK TOOLS CASE PATHWAY CREATION ASSIGNMENT COMMON 05 OPERATIONAL VIEW MACHINE ASSISTED MANUAL 06 INTELLIGENCE CASE CREATION CONFIRM/ OVERRIDE RISK PATHWAYS 3RD PARTY INGESTION

Cases ingested from AI and ML algorithms suggest Customs officers either confirm or override the All data feeds into a single view for supervisors to various sources, along a risk level for each case. The suggested risk levels from the profiler engine, these risk understand and control current operations, and an with additional data system learns from itself using levels correlate to various action pathways depending on optimiser to make the best use of available resources. from other sources verdicts from processed cases what inspection processes your port has available Case verdicts feed back to the ML algorithm

smithsdetection.com 43 INTRODUCING CORSYS: THE FUTURE OF SECURITY OPERATIONS

WHICH CAN ADAPT TO DELIVER NEW AVIATION / AIR CARGO CONOPS

CASE Profiler produces risk assessment score for each parcel based on the information captured 01 MANAGMENT 03 PROFILER 06

Building a trusted AI assisted Machine Learning Algorithm that could support future business model change – Scan all Scan some? MACHINE ASSISTED INTELLIGENCE AIRWAY BILL OPERATIONS DECISION CENTRE COMMON + 02 OPTIMISER 04 05 OPERATIONAL VIEW 3RD PARTY DATA Each parcel is routed to Airway bill and other 3rd different party data sent in advance process of shipment. according to decision centre outputs All captured data processed through operations optimiser TRUSTED SHIPPER

DOCUMENTATION ANOMALIES

RECHECK SCAN/TRACE INSPECT DASHBOARD

PHYSICAL INSPECTION

Dashboard provides real-time BI Decision centre gives officers full control and information via stream analytics, with PARCEL IS NOW READY TO LOAD visibility over decision making based on WEIGHTS & all results fed back into Profilers’ PARCEL ARRIVES X-RAY profiler scores ONTO AIRCRAFT FOR SHIPMENT DIMENSIONS machine learning

smithsdetection.com 44 INTRODUCING CORSYS: THE FUTURE OF SECURITY OPERATIONS

POWERED BY INDUSTRY-LEADING STANDARDS & TECHNOLOGIES

TECHNOLOGIES &

BLOCKCHAIN OPEN INTEROPERABILITY MACHINE AS-A-SERVICE PLATFORM WITH ANY BRAND OF NII DEVICE LEARNING ENGINE

CORSYS is a global arbitrator of trust for Global open platform linking your own CORSYS is able to support all of your Our global data sets have an industry shipping security; managed by in-house development platforms and scanners regardless of manufacturer leading perspective on ports and boarders Blockchain distributed ledger competitors apps by our powerful API providing interoperability across all risks and focus areas; enabling a more your devices effective use of your operations teams

DASHBOARDS IOT DEVICE AUGMENTED CLOUD FIRST FOR ALL DEVICES CONNECTIVITY INTELLIGENCE DESIGN

Improve processes and get better use Connect to any device and data feed to Leverages the power of a strong mixed The CORSYS service is built using from your human capital by providing aggregate information into one platform reality approach, with a mission focus industry leading security controls; with the most effective single pain of glass on the convergence of multiple data centrally managed policies and controls; to manage operations from the sets fused together, combined with the partnering with leading vendors such as operations centre to the front line results of physical inspection approach. Microsoft

smithsdetection.com 45 "LEGO blocks (#0048)" (CC BY 2.0) by regan76 @ flickr Supply Chain & eCustoms Scenarios

Farm to Buyer Trade (Import/Export) Retail to Consumer

Provenance – Certificate of Origin

Environment Monitoring w/ IoT (Temperature and Humidity)

Dispute Resolution Retailer receives PR value from Blockchain Based – Certificate of Origin engagement, with the ability to highlight what they’re doing for Retailer gets attestable end to end farmers, local economies, and to supply chain insight that can help drive sustainability. them optimize their supply chain and reduce costs. Transparency of farming transactions with supply chain helps farmers get credit.

Blockchain can make economics work for partners, such as insurance companies, Customers can get insight into origins of their product, down to Source Farm to offer services to suppliers knowing which farm(s) participated, sustainable methods used, etc.

Customs has insight into the entire process Customs Blockchain in action | Real-time grain tracking

Harvest Carrier 1 Granary The grains are harvested and 25% of grains are The product is securely shipped with The grains are stored per assessed for contaminants. found to have toxins QR codes that verify that shipping manufacturer’s regulations The remaining grains are then and are rejected. and handling happen per and compliance standards packaged with multilayer QR manufacturer’s regulations and codes compliance standards

Miller Food processors The grains are milled and must be Transform the grains handled per manufacturer’s regulations into packaged goods for and compliance standards A consumption per manufacturer’s Retail store regulations and Rejects the pasta products sent by food compliance standards processor A due to poor handling procedures B

Food processor A has breached the contract and C is liable for penalty

SHARED LEDGER Smart contract Harvest Granary Miller Food processors Retail store Carriers • 25% of grains • Grains • Grains A: Pasta products A: Rejected – non- created • Grains have toxins stored milled B: Bread products compliant handling Grain needs to be delivered • 75% of grains • Compliant • Compliant C: Rice products B: Accepted harvested and • Compliant are shipped handling handling C: Accepted shipped. handling Interswitch | Seamless supply chain financing

Corp. Sales Officer Verifies the customer with the bank

Bank Admin Bank Manager Creates sales Issues the bank contract guarantee

Entrepreneur Supplier Supplier Entrepreneur Submits a Requires a bank Bank Admin Corp. Sales Director Receives the Receives purchase order guarantee for the Releases ATC to Approves bank guarantee and supplies to the supplier purchase customer guarantee terms fulfills the order

Bank Manager Option to contend the guarantee terms

SHARED LEDGER

Smart contract created Contract updated Contract updated Contract updated Contract updated • Entrepreneur submits a • Supplier requests • Bank and the • The supplier receives • Entrepreneur purchase order to a a bank guarantee supplier agree on the guarantee and receives the supplier guarantee terms fulfills the purchase supplies 3D printed assets tracking

OEM Schematic Precision parts manufacturer Digital equipment design published to the designs proprietary equipment blockchain and tied to the physical part

Physical part Each part is equipped with a Schematic update Notification unique QR code enabling customer Manufacturer updates design Digital twin informs customer that physical access to the digital schematic to improve performance 010011 part is nearing its operational limit

Digital twin In the cloud, the digital twin runs real-time analytics to monitor the physical part’s status Customer query Installation Customer queries the most updated Customer uses the schematics to confidently 3D schematics in the secure, blockchain print the perfect part form anywhere in the world ledger using the QR code

SHARED LEDGER Digital schematic Unique QR code Manufacturer updates Critical replacement • Part #1560-01-505-8009 • Part #1560-01-505-8009 • Part #1560-01-505-8010 • Part #1560-01-505-8010 • Material: Titanium • Product ID #12.645.23 010011 • Material: Titanium • Product ID #12.645.24 • 3.12mm x 4.33mm • Digital Twin ID #12.645.23 • 3.13mm x 4.34mm • Material: Titanium • Unique QR code link • 3.13mm x 4.34mm Connecting all Stakeholders Data Sharing DATA SHARING IS CHALLENGING A LACK OF TRUST BETWEEN DATA PROVIDERS AND DATA CONSUMERS DATA SHARING IS CHALLENGING Full mesh 1:1 trust

Ports

Importers Banks

Customs

Brokers Treasury

Gov . Agencies Single Window Definitions

lodge information with a single body to fulfil all import or export-related regulatory requirements

lodge standardized information and documents with a single entry point

police, border guards, veterinary and environmental authorities give the information only once DATA SHARING IS CHALLENGING WHAT IF WE COULD CREATE A NEW ZONE OF TRUST?

Trust zone

Data Trustee Choose Your Application Strategy …

Microsoft Azure

Microsoft Azure Stack

Microsoft Azure Data Box Edge Azure Stack updates Consistency across the cloud and the edge

a b c d Microsoft Azure

Azure Industrial Azure Data Azure Stack Sphere Drone Assets Box Edge Conclusions Technology empowers Customs to drive more complex initiatives

Digitize labor intensive, paper-based processes Enable cross-agency collaboration Address expanding volume and cost of data Cloud based Analytics - Big Data applications Machine Learning Optimize budget Blockchain Upgrade aging, costly and inflexible legacy technology Achieve security, privacy and regulatory Internet of Augmented compliance Things Virtual Reality Recruit and retain next generation of government workers