This chapter examines how evolving traceability-related requirements translate into practical challenges for border management and trade facilitation. It situates these requirements within an evolving trade landscape, where a growing range of measures depends on information about how goods are produced, processed and sourced. Using carbon-intensity requirements as an illustrative case, it examines the institutional and operational settings needed to manage increasingly information-intensive border processes and draws broader lessons for implementing traceability-related requirements.
Better Borders for Trade, Traceability and Enforcement
Abstract
Traceability-related requirements are increasingly shaping how goods move across borders. Among the most prominent examples are emerging carbon-intensity requirements, which rely on information generated throughout a product's lifecycle and across complex international supply chains. As governments seek information not only about products themselves but also about how they are produced, sourced and transported, businesses are required to generate, collect and transmit this information across supply chains and jurisdictions. As a result, border processes are being asked to handle more complex and supply chain-based information.
This chapter examines how evolving traceability requirements translate into concrete border procedures and implementation challenges. Using carbon-intensity requirements as a case study, it analyses the types of information required at the border and identifies the operational implications for customs authorities, other border agencies and traders. In doing so, it illustrates broader challenges that arise whenever compliance depends on information generated and verified across supply chains rather than at the point of transaction on information collected at a single point in the trade transaction.
As traceability-related requirements move from concept to implementation, their implications for international trade depend on the information needed to demonstrate compliance. Many of these requirements are linked to non-product-related processes and production methods (NPR-PPMs), which refer to the conditions or methods under which a product is produced, without affecting its physical characteristics or functional performance (Moïsé and Steenblik, 2011[1]). While the use of NPR-PPMs in trade-related regulatory contexts is not new,1 growing demands from consumers, investors and regulators are increasing the range and complexity of related compliance requirements. These requirements now arise across a broad set of policy areas, including labour rights,2 deforestation, environmental performance, carbon intensity, product lifecycle information and circular economy objectives (Jaax and van Lieshout, 2025[2]; OECD, 2025[3]).
Although these measures cover different policy areas, they share a common feature: demonstrating compliance requires information that extends beyond the product itself and into its upstream production and supply chain. As a result, traceability information is becoming an important component of trade-related compliance. Unlike traditional border controls, which focus primarily on the characteristics of the product being traded, NPR-PPM measures require information about how goods were produced, processed or sourced. This may include information on emissions generated during production, labour conditions in upstream facilities, land-use practices associated with commodity production, or the circularity of materials used in manufacturing.
A further challenge is that NPR-PPM measures frequently rely on information generated in other jurisdictions and at multiple points along international supply chains. This can create practical difficulties for enforcement, as authorities may need to rely on information produced by foreign suppliers, third-party verification systems or other actors beyond their direct regulatory reach. The information involved may also include commercially sensitive details about production processes or supplier relationships and require risk-based approaches where full traceability is not feasible.
In addition, some supply chains involve activities that are inherently difficult to document and assess. For example, critical mineral supply chains used in battery production often span multiple jurisdictions and may involve artisanal or informal mining activities, creating particular challenges for the collection and verification of upstream information (OECD/IEA, 2025[4]). In this context, traceability is evolving from a voluntary firm-level tool into a practical instrument for linking policy objectives to goods crossing international borders.
Notes: The table reflects regulations and legislative proposals identified as of May 2026. Measures adopted, amended or proposed after this cu-off date are not covered. The table is intended to illustrate major regulatory initiatives relevant to the analysis rather than provide an exhaustive inventory. The policy proposals identified for Canada, Japan and Türkiye are not included in the analysis below given the limited public information available at this stage.
This broader evolution is reflected in a diverse landscape of measures being considered and implemented by governments. Economies worldwide have introduced or are developing binding measures that establish requirements related to how goods are produced, which may have implications for market access. These span across forced labour and supply chain due diligence, responsible sourcing of raw materials, deforestation and land use requirements, and carbon-intensity and environmental performance. Measures differ widely in their product scope, legal design, institutional arrangements, and enforcement modalities.3 While some set solely reporting obligations for firms, others create rebuttable presumptions or outright import prohibitions. Still, others condition market access on verified environmental or carbon performance data.
Among these developments, carbon-intensity requirements provide a particularly useful illustration of how traceability is becoming central in trade contexts. Border carbon adjustments (BCAs) provide one relevant example of trade-related policy instruments whose implementation requires enforcement of carbon-intensity requirements at the border. Under these regulations, in most cases charges are levied on the emissions embedded in imported products at a level equivalent to the carbon price that would have applied had those goods been produced under the importing jurisdiction’s carbon pricing policies. BCAs can take different forms, including border taxes linked to domestic carbon taxes or certificate-based systems aligned with emissions trading schemes (ETS) (WEF, 2025[7]). A growing number of jurisdictions are exploring or developing BCA-type instruments, often alongside broader carbon pricing initiatives. Since 2026, the European Union’s Carbon Border Adjustment Mechanism (CBAM), the first operational BCA globally, requires importers to present certificates priced in line with the EU Emissions Trading System. Serbia has adopted a Law on Tax on the Import of Carbon-Intensive Products, also in force since 2026 – alongside a domestic emissions tax – as part of a broader effort to align with the EU CBAM. The United Kingdom plans to implement a CBAM from 2027, while economies such as Canada and Australia are examining border-related or carbon-leakage measures. Other economies, such as Türkiye and Japan, have included import-related carbon provisions in environmental legislation or announced plans for carbon levies (Table 2.1 maps existing regulations and policy proposals) (OECD, forthcoming[5]).
Existing and proposed measures differ markedly in their product and emissions coverage, the use of thresholds, and their legal and operational design. They range from tax-based approaches and import levies to regulatory schemes linked to domestic carbon pricing systems. Most initiatives focus initially on a narrow set of energy-intensive sectors and on direct production emissions, although several frameworks envisage broader product and emissions scopes or lifecycle-based approaches over time. Taken together, this mapping points to a broader uptake of requirements based on carbon-intensity metrics in trade-related contexts, alongside substantial variation in implementation choices and levels of regulatory maturity, with important implications for border authorities and traders operating across multiple jurisdictions.
Beyond BCAs, mandatory product labelling and sustainable production schemes may constitute market access requirements. In this context, carbon-intensity metrics serve as measurement tools for implementing and enforcing those requirements. Economic operators must provide carbon-intensity metrics, alongside other environmental attributes, as part of the information required to put products into domestic consumption. In contrast to BCAs, these labelling or sustainable production schemes do not attach a price or charge to embedded emissions. Instead, carbon-intensity metrics function as informational or compliance parameters, for example to support traceability, comparability, or eligibility under regulatory standards (OECD, forthcoming[5]).
2.2.1. Border implementation can be more complex, as illustrated by carbon-intensity requirements
The case of carbon-intensity requirements brings to the fore a set of distinct challenges. First, compliance cannot be verified through physical inspection at the border – as is also the case for other non-observable product attributes – and enforcement relies on access to the information on embedded emissions. Second, such quantification of emissions is both technically complex and novel and goes beyond binary yes-or-no compliance checks. As a result, effective enforcement depends on systems of trust built around data verification, certification and declaration processes, as well as secure data movement mechanisms involving multiple public and private actors along supply chains operating within a broader compliance ecosystem (OECD, forthcoming[5]).
Note: The categories presented are illustrative rather than exhaustive. They are based on the review of measures in (OECD, forthcoming[5]) and reflect the actors most commonly referenced in the measures examined. The specific actors involved may vary across measures, sectors and jurisdictions.
Source: OECD (forthcoming[5]).
In practice, this means that implementing regulations based on carbon-intensity metrics relies on an ecosystem of key actors operating both behind and at the border, and combining regulatory, operational, and technical functions. Although legal obligations are typically defined at the central or national level, their application at the border depends on co‑ordinated action across a range of public and private actors who together support the generation, transmission, verification, and enforcement of compliance-related information throughout the trade transaction. These actors can be grouped according to the functions they perform within the compliance ecosystem (Figure 2.1):
Producers of goods, such as operators of installations involved in the production process in various countries, responsible for providing (verified) emissions data.
Other economic operators, such as importers, exporters, direct and indirect customs representatives (e.g., customs brokers), responsible for identifying applicable obligations and submitting required carbon-intensity or product-related data.
Customs authorities, acting as the primary interface at the border, responsible for determining applicability of regulations at importation, verifying authorisations, carrying out clearance-related checks, and exchanging related trade transactions data.
Other border agencies and competent authorities, such as environmental, tax, energy, or market surveillance authorities, responsible for authorisations, registries, compliance assessments, and enforcement actions.
Accreditation bodies and third-party verifiers, supporting the credibility of reported data through accreditation and verification processes.
Central or supranational authorities, where applicable, responsible for co‑ordination, oversight, and the management of shared registries or information systems.
2.2.2. Wider traceability needs can reshape the actors and information involved in border processes
The carbon-intensity case points to a broader implication for traceability-related requirements: their implementation can expand the range of actors relevant to border processes and deepen interdependencies between them. Where compliance depends on information generated upstream and on attributes that cannot be directly observed at the border, customs and other border agencies may need to rely on information produced, transmitted or validated by businesses, producers, conformity assessment bodies, accreditation bodies, auditors and other competent authorities. Importers and customs representatives may in turn need to identify applicable obligations and connect product- or shipment-level information with evidence generated elsewhere in the supply chain. The precise allocation of responsibilities will differ across instruments, but the broader pattern is one of an increasingly distributed compliance ecosystem in which effective implementation depends not only on individual actors performing their respective functions, but also on the reliability of the links between them (OECD, forthcoming[5]).
The carbon-intensity case also illustrates a second, related feature of traceability requirements: the growing complexity and diversity of the information that these actors may need to manage. Beyond emissions, traceability-related information can encompass other dimensions of environmental performance, including water-use, land-use or satellite-based deforestation information and energy consumption; social dimensions, such as working conditions, wages and compliance with domestic and international labour and human rights standards; and governance-related information, including data relevant to corruption and fraud risks (OECD/IEA, 2025[4]). As with carbon-intensity metrics, collecting, comparing and exchanging some of these data elements can be challenging due to diverging methodologies, limited data availability, confidentiality concerns and legal constraints (OECD, 2024[8]). These challenges can become more pronounced where traceability extends throughout the product life cycle and therefore involves different stages and actors across production, use and end-of-life processes, as discussed in the following Chapter 3 on the environmental product lifecycle.
2.2.3. Guidance is limited on how enforcement interacts with customs procedures and trade facilitation tools
Despite the growing number of measures requiring traceability elements, the extent to which new requirements specify operational border enforcement steps remains limited. Analysis of the shift to paperless trade and the digitalisation of trade documents and processes indicates, for instance, that border aspects are rarely fully specified in selected regulations that set specific social and environmental requirements (OECD, 2025[9]). Figure 2.2 shows that the guidance provided is limited: more than 60% of the measures reviewed do not provide clear guidance on border implementation dimensions – including documentation requirements, border procedures, data sharing, and border agency co‑operation.
While 57% of measures reviewed clarify documentary requirements and border formalities, aspects of data platforms for information sharing and border-agency co‑operation are rarely addressed (around 19% and 17% of measures clarify their role respectively) (OECD, 2025[9]). Overall, fewer than 20% of new environmental and social-related requirements reviewed are designed with comprehensive border implementation in mind. This suggests that, across traceability-related requirements more broadly, the connection between substantive compliance obligations and practical border implementation often appears only partially described.
Share (%) of social and environmental-related requirements reviewed
Notes: Based on the analysis in OECD (2025[9]) on a set of proposed and in force social and environmental trade-related measures. These include: Australia bill banning imports made using forced labour (2021); US Customs and Border Protection Forced Labour Trade Law (2022); Canada BILL S-211 enacting the Fighting Against Forced Labour and Child Labour in Supply Chains Act (2023); Mexico Forced Labour Law (2023); European Union ban on products made with forced labour (2024); United Kingdom Environment Act (2021); European Union Deforestation-free Products Regulation (2023); European Union Carbon Border Adjustment Mechanism (2023); European Union Ecodesign for Sustainable Products Regulation (2024). The four categories presented each include a varying number of sub-measures detailed in OECD (2025[9]).
Source: OECD (2025[9]).
A similar pattern is visible for carbon-intensity requirements, where guidance on border-related implementation also varies considerably across existing regulations and policy proposals. This reflects differences in regulatory scope, maturity and legal design, as well as the fact that many measures remain under development and continue to be accompanied by evolving implementation guidance. Among the measures mapped, guidance is most commonly provided on data requirements (38%) and the role of customs and other border agencies (53%) (Figure 2.3). Even in these areas, however, guidance often remains general, with limited detail on operational issues such as the use of digital tools, description of data elements, or the integration of new requirements into existing clearance processes. Other trade facilitation elements are addressed much less frequently, with only 19% of mapped measures referring to aspects such as border agency co-operation, risk management, post-clearance controls or Authorised Economic Operator (AEO) programmes4. While this does not necessarily imply that such mechanisms will not be used in practice, it suggests that their role is often not yet clearly articulated. As carbon-intensity requirements become operational, greater clarity on how they interact with existing trade facilitation frameworks could support more consistent implementation while helping to minimise unnecessary disruptions at the border.
Share (%) of measures reviewed
Notes: Based on the mapping of carbon-intensity requirements identified in Table 2.1. The policy proposals identified for Canada, Japan and Türkiye are not included in the analysis given the limited public information available at this stage. “Further trade facilitation aspects” include, for example, Authorised Economic Operator (AEO) programmes, border agency co-operation mechanisms, risk management tools and post-clearance controls.
Source: OECD (forthcoming[5]).
The implementation of traceability-related requirements places greater emphasis on elements of technical interoperability. The case of carbon-intensity requirements highlights how implementation depends not only on the availability of relevant information, but also on the ability to integrate and transmit it across border processes in a technically compatible way. This involves, first, combining existing customs data and documentation with new regulation-specific information, such as carbon-intensity data, importer authorisations and supporting compliance documents, in a way that can be incorporated into established clearance procedures. Second, it requires effective data movement between customs, environmental and other competent authorities through interoperable digital systems, including customs risk management tools, Single Windows, carbon registries and other dedicated platforms. Together, these elements enable authorities to apply carbon-intensity requirements efficiently while limiting reliance on manual processes, reducing administrative burdens and supporting consistent, risk-based enforcement (Table 2.2) (OECD, forthcoming[5]).
Notes: The table provides an illustrative overview of the types of data elements, documents and data analysis systems that may be relevant for implementing carbon-intensity requirements, based on the mapping of regulatory approaches presented in Table 2.1. It is not intended to provide an exhaustive inventory of all requirements across all measures considered. The distinction between “existing” and “new” refers to whether the information, document or system is generally already used in trade and customs processes or whether it may need to be newly created, collected or adapted by the relevant authorities and/or stakeholders for the implementation of carbon-intensity requirements.
Source: OECD (forthcoming[5]).
The rise of traceability-related requirements and the lack of regulatory guidance on enforcement practices raises questions about how actors must adapt operational steps at the border. Related requirements can cause operational challenges for both public authorities and firms, which need to navigate operational steps at the border. These steps include: understanding and correctly determining which goods are subject to which rules; transmitting relevant data for compliance across actors; verifying authorisations and registrations status; identifying de minimis thresholds; and detecting circumvention risks and taking enforcement action. Implications also arise for processes which go beyond traditional border enforcement, such as collecting, reporting and submitting the correct supply chain data for compliance in time and across different jurisdictions and economic sectors.
The new procedural requirements introduced by traceability-related requirements can challenge the smooth functioning of existing trade facilitation tools. Traceability-related requirements introduce new compliance obligations that may not yet be fully integrated into border procedures and information systems. Without adaptation, this misalignment could result in delays, duplication, or inefficiencies at the border. The rollout of traceability-based regulations can create risks of disruption to particular trade facilitation elements such as information availability to facilitate trader compliance, automated and electronic clearance of import declarations, pre-arrival processing, risk management, Single Window systems, border agency co-operation, post-clearance audits, and AEO programmes. A lack of clear and accessible information may complicate importers' ability to comply with traceability obligations, creating uncertainty across supply chains and increasing the risk of non-compliance, particularly for smaller operators. Traceability procedures could also place specific pressure on automated customs clearance, as additional checks risk increasing administrative burdens and importation times. Limited integration of traceability data with existing customs systems and digital platforms could further cause fragmentation, manual handling and delays, especially where traceability frameworks are managed by sectoral or environmental authorities whose systems are disconnected from customs infrastructure. The absence of traceability compliance dimensions within AEO frameworks risks creating a two-track compliance burden that undermines the facilitation benefits these programmes are designed to deliver.
Traceability elements involve new circumvention risks and potentially require adjustments to customs risk management. Customs risk management and related co‑operation is an important pillar of modern border enforcement and contributes to the improvement of trade facilitation as also evidenced by the OECD Trade Facilitation Indicators (OECD, 2025[10]). Where compliance depends on upstream production conditions or other non-observable attributes, circumvention may involve practices such as “origin washing”, false declarations, misclassification or rerouting through third countries, potentially obscuring relevant links across deeper supply chain tiers.5 Meeting these challenges will likely require customs risk management to evolve towards more data and risk-driven solutions capable of detecting patterns across shipments and supply chain tiers, rather than relying on document checks alone.
Using a trade facilitation lens helps to analyse implementation readiness for traceability requirements across various actors, sectors and economies. In a trade facilitation context, readiness can be understood for two complementary dimensions: (1) operational readiness: the ability to embed new requirements into existing border procedures through appropriate mandates, workflows, staffing, and co‑ordination; and (2) systems and data readiness: the availability of the digital infrastructure, interoperable IT systems and structured data environments needed to generate, transmit, and process traceability-related information. The analysis of carbon-intensity requirements suggests that these two dimensions do not always coincide and are unevenly distributed across firm sizes, sectors, and contexts (OECD, forthcoming[5]). Large firms may already operate relevant compliance and reporting systems, while small and medium-sized enterprises (SMEs) and firms in developing economies often face resource, data and institutional constraints that limit their ability to meet new requirements (Figure 2.4). Sector-specific factors also play a role: products with complex tariff classifications (such as critical minerals) or non-standard trade flows (such as electricity), can pose enforcement challenges that go beyond standard customs procedures (OECD, forthcoming[5]).
Note: Illustrative, derived from OECD (forthcoming[5]).
Source: Based on OECD (forthcoming[5]).
Improving readiness requires targeted capacity building and international co-operation. Technical assistance, co‑ordinated through international organisations and development partners, can help build the administrative infrastructure, digital systems, and human capital needed to comply with and enforce traceability requirements, particularly in developing economies. At the same time, regulators can support smoother implementation by providing clear operational guidance, phased timelines, and harmonised data formats that reduce duplication and lower compliance costs across jurisdictions. For developing economies and SMEs in particular, the costs of complying with traceability-related requirements can be disproportionately high relative to available resources and institutional capacity (OECD, forthcoming[5]).
References
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← 1. The analytical distinction between product-related and non-product-related PPMs emerged in the late 1980s and early 1990s. It was shaped by early General Agreement on Tariffs Trade (GATT) panel practice and later refined through WTO jurisprudence, including US – Shrimp (1998) and subsequent interpretations under GATT Article XX and the TBT Agreement (Conrad, 2011[11]).The objectives of NPR-PPM measures vary across economies. They can include market-based incentives, regulatory thresholds, and eligibility criteria for public support (Moïsé and Steenblik, 2011[1]).
← 2. OECD/EUIPO work on illicit trade has similarly highlighted the growing importance of supply chain transparency and traceability in addressing risks associated with forced labour and strengthening due diligence across global value chains (OECD/EUIPO, 2026[14]).
← 3. Examples include: the UK Modern Slavery Act (2015), Australia's Modern Slavery Act (2018), the US Uyghur Forced Labor Prevention Act (2021), the EU Deforestation-free Products Regulation (2023), and the EU Carbon Border Adjustment Mechanism (2023) (Jaax and van Lieshout, 2025[2]).
← 4. Authorised economic operators (AEO) are operators who meet specific criteria and who are therefore benefiting from additional trade facilitation measures, such as low documentary and data requirements, low rate of physical inspections and examinations, rapid release time, deferred payment of duties, taxes, fees, and charges, use of comprehensive guarantees or reduced guarantees, a single customs declaration for all imports or exports in a given period, clearance of goods at the premises of the authorised operator or another place authorised by customs. The specified criteria to become an AEO may include an appropriate record of compliance with customs and other related laws and regulations, a system of managing records to allow for necessary internal controls, financial solvency, and supply chain security. See Article 7(7) of the WTO Trade Facilitation Agreement: https://tfadatabase.org/en/tfa-text/article/7.
← 5. Forced labour measures illustrate some of these challenges. Under the U.S. Uyghur Forced Labor Prevention Act (UFLPA), a rebuttable presumption applies to goods linked to the Xinjiang Uyghur Autonomous Region, with enforcement drawing on risk-based targeting and supply chain documentation. Early evidence suggests that, while direct shipments from the region to the United States had ceased by early 2023 and the value of at-risk imports from China declined, indirect exposure through deeper supply chain tiers remained persistently high, illustrating the challenges of detecting circumvention and tracing relevant links beyond direct suppliers (RAND, 2025[12]). Experience in other jurisdictions also points to the institutional and resourcing demands associated with operationalising import prohibitions linked to forced labour (OECD/EUIPO, 2026[14]; OECD, 2026[13]).