This chapter examines how digitalisation supports the operational integration between trade facilitation and traceability. It explores how tools such as Single Windows, electronic documentation and digital platforms can facilitate the sharing of information among traders, customs authorities and other competent agencies, and enable data from customs declarations, traceability systems and regulatory databases to be used more effectively for risk management and compliance purposes. It also highlights the technical challenges that remain in connecting these systems and integrating increasingly information-intensive regulatory requirements into border processes.
Better Borders for Trade, Traceability and Enforcement
Abstract
Digitalisation emerges as one of the key operational foundations shared by trade facilitation and traceability. As governments and businesses increasingly rely on information generated across international supply chains, digital systems become essential for collecting, transmitting, processing and verifying compliance-related information. The effectiveness of traceability-related requirements therefore depends not only on the quality of the underlying information but also on the ability of systems to transmit and use it efficiently across firms, agencies and jurisdictions.
This chapter examines the role of digital tools in supporting traceability-related requirements while facilitating efficient cross-border trade. It explores how digitalisation can support more efficient compliance and stronger supply chain visibility, while also identifying challenges associated with fragmented systems, uneven levels of digital readiness and limited interoperability between relevant platforms.
Since the entry into force of the WTO Trade Facilitation Agreement (TFA) in 2017, trade facilitation reforms have emphasised digitalisation, transparency, co-operation and the more effective use of information in border processes. Building on these developments, growing attention is now being paid to paperless trade and the digital infrastructures needed to support more data-intensive forms of trade and regulatory compliance (OECD, 2025[1]).
International efforts to advance paperless trade span a complex ecosystem of multilateral and plurilateral initiatives, trade agreements, regional frameworks, domestic reforms and private-sector solutions. In addition to the WTO TFA, discussions under the WTO e-commerce agenda have expanded attention to electronic transactions and other enabling frameworks for paperless trade. Trade agreements also incorporate gradually more paperless trade provisions alongside rules on electronic signatures, data flows and privacy, while newer digital economy partnerships promote modular co-operation and interoperability. Regional initiatives focus on practical implementation, complemented by high-level principles developed in fora such as the G7 and G20. At the domestic level, countries are deploying integrated digital border systems, while private-sector initiatives are advancing the digitalisation and standardisation of commercial documents (OECD, 2025[2]).
Digitalisation is important because it can yield important trade cost reductions. Digitalising border processes significantly boosts trade across all sectors, especially when combined with streamlined procedures, simplified documentation, and enhanced co-operation among border agencies. A 10% global improvement in these areas, as measured by the Trade Facilitation Indicators (TFIs), can lead to an 18% rise in global exports (Figure 4.1). The same analysis also shows that broader domestic digital regulatory conditions matter. Ambitious reductions in the barriers affecting e-transactions, e-payments, and connectivity – as measured by the OECD Digital Services Trade Restrictiveness Index (DSTRI)1 – are associated with a 37% increase in exports. Together, they suggest that both border digitalisation and broader domestic digital frameworks matter for trade performance. Finally, international co-operation is essential. As digital trade barriers grow, aligning global regulations on electronic transactions, data flows, and trust frameworks can further reduce frictions and support the broader transition to paperless trade (OECD, 2025[2]).
Impacts from a 10% improvement in the TFIs, by areas (%)
Note: The estimations control for border processes (as measured by the OECD TFIs), for domestic barriers to electronic transaction frameworks, e-payments and connectivity (as measured by the OECD Digital Services Trade Restrictiveness Index), as well as for the international trade-related discussions affecting digital trade (as captured through the OECD Index for Digital Trade Integration and Openness).
Source: (OECD, 2025[2]).
This shift is highly relevant for traceability. Many traceability requirements depend on the ability of authorities to access, verify and analyse information efficiently. For instance, a scanned PDF certificate may be easier to transmit than a paper certificate but extracting and validating relevant information can still require additional processing steps. Structured data fields, digital identifiers and machine-readable records can facilitate automated checks, cross-referencing with registries and risk analysis. At the same time, emerging technologies increasingly make it possible to extract and analyse information from unstructured documents. Digitalisation is therefore a necessary but insufficient step: the broader challenge is to ensure that trade-related information can be accessed, verified and used efficiently, together with the appropriate safeguards, across relevant regulatory and border processes.
Building on this paperless foundation, emerging technologies create new opportunities to strengthen both trade facilitation and traceability. Artificial intelligence (AI) and advanced data analytics can help authorities detect anomalies, identify high-risk consignments and allocate inspection resources more efficiently. For trade facilitation, this can improve risk management and reduce unnecessary checks on compliant traders. AI can also help extract and structure information from documents such as certificates, licences, test reports and scanned PDFs, making it easier to incorporate information that was not originally created in a machine-readable format into relevant border and compliance processes. For traceability, the same tools can be used to identify inconsistencies in origin claims, certification records, carbon-intensity declarations, product safety information or supply chain documentation (OECD, 2026[3]).
AI and machine learning can also support specific customs functions. AI-powered HS classification can use natural language processing and machine-learning algorithms to automate the assignment of tariff codes or regulatory requirements to goods descriptions. AI systems capable of analysing both textual descriptions and visual data are emerging, achieving accuracy rates exceeding 90% in some applications (ADB, 2025[4]). Beyond classification, AI can be applied to risk profiling, fraud detection, cargo inspection and automated document processing. By analysing large volumes of structured and unstructured data, models can identify suspicious patterns, flag higher-risk shipments and facilitate faster processing of compliant trade. Examples of early deployments by customs administrations in economies such as Korea, Singapore and the United States illustrate the potential and practical feasibility of these approaches (WCO, 2025[5]).
Application programming interfaces (APIs) also offer important possibilities. They can allow real-time transmission of information among customs systems, regulatory databases, private platforms and certification bodies. This can reduce repeated manual submissions and allow authorities to verify information closer to its source. For example, instead of requiring traders to upload a certificate, a border agency could query a relevant registry to confirm whether the certificate exists, whether it remains valid and whether it applies to the shipment concerned (WTO, 2024[6]; WCO/WTO, 2022[7]).
Digital certificates, verifiable credentials and electronic signatures can support confidence in trade-related information further. Traceability depends not only on the availability of data, but also on confidence in its source. Digital credentials can make it easier to identify who issued a certificate, whether the issuer is authorised, whether the information has been altered and whether the credential remains valid. They may also support mutual recognition arrangements by enabling customs authorities to verify in real-time whether a trader is a valid participant in a partner economy’s Authorised Economic Operator (AEO) programme. This is particularly relevant in sectors such as food and agriculture, chemicals, medical devices and batteries, where compliance often depends on accredited laboratories, inspection agencies, conformity assessment bodies or recognised certification schemes (see Chapter 5 for further insights on this).
Other technologies, including sensors, Internet of Things devices, geospatial tools and distributed ledgers, can support more continuous forms of traceability. Sensors can help monitor cold chains, transport conditions or the movement of sensitive goods. Geospatial data can support verification of production locations or land-use claims. Distributed ledgers may be useful in selected cases where several actors need access to tamper-resistant records of transactions or chain-of-custody events. These tools are not substitutes for sound regulation or institutional arrangements, but they can strengthen the evidence base available to authorities and firms (WTO, 2024[6]; WCO/WTO, 2022[7]).
Digitalisation could create new challenges if implemented without sufficient attention to users or if the underpinning regulatory frameworks are fragmented. One risk is that paper-based complexity is simply reproduced in digital form. Traders may be asked to use multiple portals, submit similar information to different agencies, comply with different data formats, or maintain separate accounts for customs, licensing, product safety, environmental and tax authorities. In such cases, digitalisation may reduce the use of paper while failing to reduce the underlying procedural burden (OECD, 2025[2]).
A second challenge concerns legal recognition. Digital tools only facilitate cross-border trade if electronic records, electronic signatures, digital certificates and electronic transferable records are legally accepted by the relevant authorities in other jurisdictions. Where legal frameworks remain incomplete, firms may be required to submit digital information while still retaining paper documents for official purposes. This can create duplication rather than simplification. Legal recognition also matters across borders: an electronic certificate issued in one jurisdiction may not be accepted by authorities in another unless there are clear rules, standards or recognition mechanisms.
Cybersecurity and operational resilience are also becoming central trade facilitation issues. As border processes become more dependent on digital systems, outages, cyber incidents or failures in key platforms can disrupt trade flows. This is particularly important for Single Windows, customs management systems, port community systems and digital certification platforms. Because these systems underpin the exchange and verification of trade-related information, disruptions can directly affect customs procedures, compliance checks and cargo clearance. The greater the reliance on digital infrastructure, the greater the need for contingency plans, resilience requirements, data protection safeguards and clear procedures for maintaining continuity of trade during system disruptions.
Digitalisation can also create level playing field challenges. Large firms may be able to invest in sophisticated compliance systems, integrate their enterprise software with logistics platforms and use specialised service providers. Smaller firms may face higher adjustment costs, especially when digital requirements are complex, fragmented or frequently changing. Developing country suppliers may also face difficulties generating, validating and transmitting the data required by foreign markets. Without appropriate support, digitalisation can unintentionally reinforce disparities between firms and countries (UNCTAD, 2022[8]; Baker, 2026[9]).
A further risk is digital compliance burden. Because digital tools make it easier to request, store and process information, governments may be tempted to expand data requirements without sufficient discipline. This can generate new forms of red tape, particularly where data requests are not clearly linked to risk management or regulatory necessity.
Traceability can intensify many of these challenges because it requires more granular and diverse information than traditional customs procedures. Customs data generally focus on the consignment description, trader, tariff classification, value, origin, transport route and applicable duties. Traceability-related requirements may require additional information on production facilities, suppliers, input materials, processing methods, batch numbers, certification schemes, emissions values, recycled content, safety tests or end-of-life pathways (Chapters 2 and 3). This information is often generated far upstream in the supply chain, long before goods reach the border.
Traceability also expands the number of actors involved in trade-related compliance. Beyond traders, customs brokers and customs authorities, relevant actors may include producers, subcontractors, laboratories, certification bodies, conformity assessment bodies, environmental agencies, market surveillance authorities, logistics providers, recyclers, digital platform providers and sector-specific regulators. This creates a more complex compliance ecosystem. Digital tools can help connect these actors, but they also raise questions about who is responsible for generating, validating, transmitting and correcting relevant data (Box 4.1).
Digital platforms for reporting, exchanging and verifying environmental or social-related sustainability information are being developed in parallel by businesses, industry associations and governments. These initiatives can differ substantially in scope, governance, technical architecture and the level of assurance provided. Some establish common data models and technical specifications; others operate sector-specific data spaces; and an increasing number of public systems collect information required for regulatory enforcement. This diversity reflects different sectoral needs and concerns over data protection, confidentiality and trust, but it also creates challenges for interoperability.
Industry-led initiatives generally seek to enable firms to transmit environmental or social-related sustainability information without transferring control of all their data to a central platform. For example:
The Partnership for Carbon Transparency’s PACT Network provides an open, cross-sectoral data model and application programming interface for the secure, peer-to-peer exchange of product carbon-footprint data between compatible software solutions.
Catena-X applies a governed data space model to the automotive industry, combining common data standards and rulebooks with mechanisms that allow participants to specify how their data may be used.
Together for Sustainability provides a more sector-specific model for the chemical industry, combining a product carbon footprint methodology, a common data model and an exchange solution through which companies and their suppliers can share upstream emissions information.
Public regulatory systems are being developed for a different purpose: to receive, verify and make available information required to demonstrate compliance. For example:
The European Union Deforestation Regulation relies on an information system through which operators submit due-diligence statements containing information such as product classification, quantity, country of production and production-site geolocation. The Regulation provides for an interface with national customs systems through the EU Single Window Environment for Customs. The EU Carbon Border Adjustment Mechanism (CBAM) similarly relies on a central registry through which importers and installation operators manage authorisations, emissions information and reporting obligations; since January 2026, customs authorities verify the importer’s CBAM authorisation before releasing covered goods for free circulation. The EU’s CATCH system provides a further sector-specific example: since 10 January 2026, EU importers and competent authorities have been required to use CATCH to submit and process digital catch certificates for fishery products entering the EU market; the system aims to enable the paperless sharing of data, documents and certification information among trading parties and control authorities, thus supporting verification of the legal origin of imported products and efforts to prevent illegal, unreported and unregulated fishing. The emerging EU Digital Product Passport system adds another model: a central registry will index product passports while detailed product information may remain in decentralised data sources.
The United States Customs and Border Protection (CBP) Forced Labor Portal enables importers to submit supply chain tracing evidence for review under forced-labour enforcement procedures, including evidence covering the full supply chain of an imported good or component. The United States CBP has also incorporated the Altana ID into its Global Business Identifier test, which explores the use of common and commercially maintained identifiers to improve the identification of businesses and visibility across international supply chains. These initiatives illustrate how public enforcement systems may increasingly draw on detailed information generated in private supply chain networks.
Japan’s Ministry of Economy, Trade and Industry is supporting the creation of data-sharing use cases, including a project for sharing carbon footprint information across automotive and battery supply chains.
Australia’s National Agricultural Traceability Strategy is developing common data standards and an interoperable framework rather than a single central platform, including work on the verification of sustainability claims.
In the United Kingdom, the Ecosystem of Trust has pilot tested how data held in commercial supply chain systems could be shared with border authorities. The evaluation found that the data could meet around 80% of minimum customs risk assessment requirements and potentially reduce decision times by 17%.
The parallel development of these systems raises the risk of fragmented data models, repeated reporting and inconsistent assurance requirements. Private platforms may be designed primarily to support management of business-to-business social or environmental criteria, while government systems require legally reliable evidence for risk assessment and enforcement. The principal policy challenge is therefore not necessarily to create one universal platform, but to establish the technical, semantic and legal conditions under which trusted data can be securely reused across systems. This includes alignment of product and business identifiers, data definitions, calculation methodologies, verification requirements, access rights and interfaces with customs and Single Window systems. Particular attention is also needed to ensure that the costs of participating in these emerging data ecosystems do not exclude SMEs or suppliers in developing economies.
Note: The examples provided in this box are meant to be illustrative rather than exhaustive.
Source: Based on (OECD, 2025[2]); OECD (2026[10]); US CBP Forced Labour Compliance; US CBP Global Business Identifier Test; Japan Ouranos Ecosystem; Australia National Agricultural Traceability Strategy; UK Ecosystem of Trust;
The importance of data provenance is therefore particularly pronounced for traceability. Authorities do not only need access to information; they may need to know where it came from, who generated it, when it was produced, which methodology was used, whether it was verified and whether the issuing entity is recognised. This is especially important where traceability information supports regulatory enforcement. A carbon-intensity value, chain-of-custody claim or safety certification is only useful if authorities can assess its reliability.
The growing use of digital traceability systems creates new possibilities for automatically identifying missing, inconsistent or unverifiable information, but also requires governments to decide how such information should be used in border processes. A missing data field or an inconsistency does not necessarily indicate non-compliance, and authorities need clear rules on when such flags should trigger further checks, delay clearance or allow information to be corrected. They must also determine what evidence is sufficient to release goods and who bears responsibility when information provided by a foreign supplier or third-party platform is inaccurate. These questions become particularly important where automated systems inform or directly affect clearance decisions.
There is also a risk that digital traceability requirements could create barriers to participation in trade. Firms that cannot generate machine-readable data, access recognised certification systems or connect to digital platforms may face difficulties accessing certain markets, even where their products meet substantive requirements. This is particularly important for small producers, informal suppliers and firms in developing economies. Digital traceability can support more efficient compliance, but it can also raise the fixed costs of participating in international trade.
Across all these developments, the cross-cutting issue is data. Digital tools for trade facilitation depend on the ability to generate, transmit, verify and reuse data across public and private systems. For traceability, this includes a growing volume of non-personal data (NPD): product identifiers, batch numbers, facility identifiers, origin information, audit results, emissions values, recycled content, certification status, testing results, transport conditions and chain-of-custody records. These data are often commercially sensitive, technically complex and generated across multiple actors (López González, Del Giovane and Ferencz, 2025[11]).
This makes data governance a core aspect in relation to traceability-related requirements. Governments need to define what data are required, who must provide them, in what format, at what point in the trade process and for what purpose. These questions are becoming increasingly important because across an ever-broader range of commercial data. Governments also need to determine who can access the data and under which conditions. Some traceability-related information may be relevant for consumers, some for importers, some for customs, some for environmental or market surveillance authorities and some only for accredited auditors.
Notes: Products or production data may include technical characteristics of products, as well as information, reports and documents on products and production, including about testing. Environmental-related requirements fall under the “environmental data” category.
Source: Lopez-Gonzalez, Del Giovane and Ferencz (2025[11]).
Confidentiality is particularly important. Traceability data may reveal supply chain relationships, production methods, sourcing strategies, input prices or other commercially sensitive information, including information that could expose supply-chain vulnerabilities if disclosed. If firms fear that data submitted for regulatory purposes may be exposed to competitors or used beyond their intended purpose, they may resist participation or provide less complete information. Data frameworks therefore need to combine transparency for regulatory purposes with safeguards for confidential business information.
Data quality is another key challenge. Traceability systems are only as reliable as the data they contain. Poor quality data, inconsistent identifiers, outdated registries or unverifiable certificates can undermine both trade facilitation and enforcement (Box 4.2). Governments and international partners therefore need to focus not only on data collection, but also on validation, auditability, version control, correction mechanisms and the identification of reliable data sources. The objective should be to ensure that data can be acted upon with confidence.
Interoperability is equally relevant. If each market requires different data formats, identifiers, platforms and verification methods, compliance costs will rise. Firms may need to adapt their systems separately for each destination market, while authorities may struggle to compare or verify information across jurisdictions. Common data models, internationally recognised standards and, where appropriate, recognition of digital credentials can help reduce duplication and support more scalable traceability systems (OECD, 2025[12]; World Bank, 2025[13]).
The growing use of digital tools for traceability raises policy questions that extend beyond the traditional trade facilitation agenda. A first issue is how traceability-related requirements connect with existing trade facilitation systems. Rather than creating separate digital portals for each new requirement, governments can explore, where appropriate, how relevant information can connect with Single Windows, pre-arrival processing, risk management and agency co-operation frameworks. This could help avoid fragmentation and unnecessary duplication.
A second issue is a possible shift from document recognition towards greater attention to the underlying data. Traditional trade facilitation often asks whether a document is accepted, whether it can be submitted electronically and whether it is recognised by an authority. Traceability can require a more granular approach. Governments may need to consider specific data elements (see Box 4.2 on improving granularity of HS codes as a necessary complement to digitalisation efforts), methodologies, digital credentials, issuing bodies, accreditation systems or verification processes. The focus therefore extends from the form of a document to the reliability and usability of the information it contains.
Digital tools such as electronic certificates, product passports, Single Windows and traceability platforms are increasingly promoted to improve visibility and resilience in critical mineral supply chains. However, digitalisation alone cannot ensure traceability if the underlying trade data do not identify the minerals being traded with sufficient precision. Digital systems can only track what is actually recorded.
The OECD's ongoing work on critical minerals trade data shows that conventional HS6 trade classifications frequently aggregate different minerals into broad product categories, obscuring the origin, movement and processing stage of specific materials. As a result, supply dependencies and concentration risks can be significantly underestimated. For some critical minerals, including niobium, scandium, germanium and osmium, concentration measured using more detailed national tariff codes is at least twice as high as that suggested by standard HS6 data.
A key insight from the ongoing OECD mapping of HS codes and national trade nomenclatures is that countries already differ substantially in the extent to which they disaggregate critical minerals. Some jurisdictions have introduced specific statistical breakouts for minerals such as scandium, indium, boron or tellurium, while others continue to record them within broader categories. These differences create opportunities for international co-operation at the World Customs Organization (WCO), peer learning and eventual harmonisation of more granular trade classifications.
More detailed HS classifications would strengthen traceability by enabling customs authorities, regulators and firms to distinguish individual minerals, follow their movement through different stages of the value chain and better assess supply chain risks. For instance, such granularity is particularly important for strategic battery minerals. Lithium trade is highly concentrated, with the top three exporters accounting for almost 90% of global exports, while nickel supply chains are progressively more affected by export restrictions and processing-related policy interventions. Reliable traceability of these supply chains therefore depends on the ability to identify these materials accurately in trade data from the outset.
Notes: The levels of concentration are assessed through Hirschman-Herfindahl indices computed at aggregate (HS6) and disaggregate (HS6+), across exporting economies. The calculations are carried out for selected critical minerals, drawing on the Harmonised System nomenclature, Canada’s Customs Tariff Nomenclature (January 2025), the EU Combined Nomenclature (January 2025), Japan’s import tariff codes (January 2025) and the US Harmonised Tariff Schedule nomenclature (July 2025).
Source: OECD (forthcoming[14]).
A third aspect concerns trusted digital identity. Traceability depends on the ability to identify products, facilities, firms, certifiers, laboratories and regulatory authorities. Digital identity frameworks can help establish whether a product is linked to a given producer, whether a certificate was issued by a recognised body or whether a facility is authorised under a particular scheme. Trusted identifiers can therefore become an important component of trade facilitation infrastructure.
A fourth area is verification without full disclosure. In some cases, firms may wish to demonstrate compliance without revealing all underlying supply chain information. This is particularly relevant where traceability data are commercially sensitive. Digital tools may allow authorities or supply chain partners to confirm that a product meets a requirement, that a certificate is valid or that a threshold has been respected without requiring disclosure of the full underlying dataset. This could help reconcile regulatory information needs with the protection of confidential business information.
Machine-readable regulatory information is a fifth issue. If traceability checks are to become more automated, regulatory requirements may need to be expressed in clearer and more structured ways. This can include publishing required data fields, accepted formats, recognised certifiers, validation rules and procedural requirements in ways that digital systems can interpret. Machine-readable regulatory information can reduce uncertainty for firms and make it easier for service providers to develop compliance tools.
Finally, digital traceability raises questions of accountability in automated enforcement. Where AI, algorithms or automated rules are used to assess risk or verify compliance, traders need clarity on how decisions are made, how errors can be corrected and how review or appeal mechanisms operate. The use of digital enforcement systems therefore gives greater prominence to questions of transparency, human oversight and accountability (ESCAP and ADB, 2026[15]).
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← 1. This corresponds to a 0.1-point reduction (or an approximately 55% reduction from average global restrictions) in the DSTRI for electronic transaction frameworks, e-payments and connectivity.