FIRST USE CASE ON taXchain: LONG TERM SUPPLIER DECLARATIONS
Long term supplier declarations (LTSD) certify relevant master data information for materials between buyers/ sellers for up to 24 months (comparable to a passport for a material). Those are necessary to prove the status of origin of a product in order to benefit from customs benefits through free trade agreements.
83% of all European companies issue LTSD in paperform. Currently, the issuance of LTSDs generates high administrative and personnel costs. Authorities demand proof of 'original document', which underlines the opportunity of the blockchain technology to be a trust-creating 'single source of truth'.
THE CURRENT MANUAL PROCESS... is fraught with risks e.g.:
- No change tracking: Changes in the origin of goods can currently only be communicated by mail or e-mail.
A direct adjustment of the issued LTSD is no longer possible. However, the supplier often cannot ensure the origin of the goods over a longer period of time.
- Audit: The company that has falsely issued an LTSD is always liable, but this is currently enormously difficult to prove in the event of a dispute.
- Risk of fraud:
Currently, anyone could pretend to be an entrepreneur.
- Lower utilization of customs benefits.
THE NEW DIGITAL PROCESSWith taXchain, partners will be able to generate and exchange LTSD documents within few minutes. The timely exchange of information and data combined with legally binding digital agreements for all business transactions, will lead to greater efficiency and transparency in the processes, cost reductions and competitive advantages for all involved ecosystem participants. In the long term view, the taXchain platform will enable frictionless cross border sales and open savings opportunities for all multinational enterprises buying, selling, and producing tangible products across borders.
- Dashboard to manage & track the E2E LTSD process: LTSD can be requested or issued digitally.
- Fraud prevention: Certificates are used to ensure that no contractor can impersonate another.
- Improved audit: Because data are stored immutably on the blockchain, it can be furthermore determined at any time by whom and when the LTSD was issued.
- Change tracking: Changes in the origin of goods can be continuously recorded and referenced to the respective LTSD ensuring the best possible utilization of preferential agreements.
- Maximum utilization of free trade agreements.