Toward a New Architecture of Trust in Transatlantic Customs

The following insights emerged from a private roundtable of government, commercial, and policy leaders in Brussels, co-hosted by NYU’s Wahba Initiative for Strategic Competition (WISC) and the Centre for European Policy Studies (CEPS). The discussion was held under the Chatham House Rule.

The European Union and United States conduct enormous volumes of transatlantic goods trade each year, making the efficiency of their customs systems consequential for firms and consumers on both sides of the Atlantic. But new customs rules and procedures on both sides of the Atlantic have generated some concerns about regulatory headwinds.

For example, the EU’s reforms include the revision of the Union Customs Code (UCC), paving the way for the establishment of a central European Customs Authority, the EU Customs Data Hub, and Digital Product Passports (DPP). Meanwhile, the US is scaling up supply chain intelligence networks and expanding trusted trader capabilities.

Differences between the EU and US are inevitable given their distinct legal systems and policy mandates. But trade facilitation does not require full policy harmonization. It requires trust. The objective is not common systems, but mutual reliance between different systems – trusting the partners moving goods, the data describing them, and the assessments used to determine risk. Laying this foundation now rather than trying to retrofit interoperability later could help keep transatlantic goods trade open, efficient and secure.

Layer 1: Trusted Actors

Efficient trade relies on identifying and validating the entities moving goods and services across borders. For example, the World Customs Organization’s (WCO) Authorized Economic Operator (AEO) programs certify compliant supply chain partners. AEOs programs create mutually recognized standards to reduce risk and bridge informational gaps across customs authorities.

Further modernization requires evolving these programs into holistic, transparency-driven frameworks. Consider two parallel efforts:

• EU “Trust and Check” Regime: The EU reform introduces a “Trust and Check” status that goes beyond conventional AEO criteria. Trusted operators grant customs authorities continuous, full transparency into their operational data streams. In exchange, authorities can remove procedural bottlenecks – eliminating many mandatory pre-loading and docking formalities, effectively allowing compliant traders to act as their own customs authority and benefit from having a green lane.
• US “All-Threats” Expansion: US trusted trader programs are shifting toward an economic security and “all-threats” lens. This expansion evaluates supply chain integrity across sensitive sectors (such as pharmaceuticals) and enforces broader policy objectives (such as counterfeit goods and the prevention of forced labor) beyond tariff collection. This shifts the US stance from single-issue approaches, such as counterterrorism and tax accuracy.

Both systems seek to use richer information about trusted actors to differentiate risk and concentrate enforcement resources where they are most needed. The opportunity is to explore whether greater mutual recognition of trusted status could, over time, allow verification in one jurisdiction to support proportionate facilitation in the other.

Layer 2: Trusted Data

Historically, customs enforcement relied on single declarations processed through centralized national IT systems. The EU Customs Data Hub departs from this “one procedure, one IT system” paradigm by moving toward a model where the provenance, quality, and usability of data matter more than the underlying IT platform.

Governments do not need to build a single, unified transatlantic “Single Window” or connect every legacy software system. In practical terms, basic agreement that a product, company, origin designation, certification, or other critical data element has a sufficiently consistent meaning in both systems to be understood and acted upon might be enough to deliver substantial benefits. For example, modern supply chains are multi-layered and often no single party possesses complete, verified information on every aspect of a shipment. EU reforms aim to facilitate multi-party filings, allowing buyers, logistics providers and manufacturers to feed data directly into the system for a single consignment. Matching these digital inputs upstream yields higher-quality data than forcing a single broker to aggregate disparate information.

Additionally, a major operational gap in international trade is the lack of standardized business and product identification mechanisms equivalent to individual passports. While digital identity tools exist for people, products lack universal cross-border identifiers.

The EU’s Digital Product Passport initiative illustrates the potential value of standardized product-level information, even though DPPs were not primarily designed for achieving customs modernization. If critical product data can be defined and verified in ways that other jurisdictions can understand and trust, DPPs could provide a useful test case for transatlantic data interoperability in the context of customs.

Layer 3: Trusted Assessments

The third layer involves maximizing the potential of fast, efficient tools to detect noncompliance. Doing so depends crucially on the first two layers. For example, AI is a powerful enabler for customs verification, but its efficacy is bound by the underlying data architecture. Without verified actor identities and semantically clear data, AI models merely analyze fragmented or poor-quality inputs.

• US Deployment: US Customs and Border Protection utilizes risk management tools and is actively working to use AI-enabled tools to maximize intervention accuracy, aiming for over 90% effectiveness in isolating non-compliant cargo. Guidance has also been issued for customs brokers leveraging AI for tariff classification and country of origin, balancing innovation with human accountability.

• EU Governance and Network Analysis: The EU operates under the governance parameters of the EU AI Act. While moving more cautiously on AI in Customs compared to the US, the EU leverages advanced transactional analytics – such as Eurofisc’s Transactional Network Analysis – to detect suspicious behavioral patterns across corporate networks without inspecting underlying commercial secrets. This is another instance where a tool developed for a different purpose – in this case, VAT fraud detection – could potentially be leveraged for customs risk management.

Once the central EU Customs Authority becomes operational in Lille, it could draw on proven algorithmic models tested by US authorities, enabling both sides to automate routine risk processing while focusing human enforcement on high-risk anomalies.

The Broader Regulatory Challenge

Trusted interdependence can ensure that trade moves freely. However, the primary obstacle to border fluidity may not be customs agencies, but surrounding sectoral regulators. Customs reform is currently moving faster than the broader regulatory architecture.

Customs administrations operate with a growing focus on trade facilitation and integrated risk management. In contrast, non-customs authorities – such as Sanitary and Phytosanitary (SPS) agencies, food safety boards, environmental regulators, and pharmaceutical monitors – request data for narrow statutory objectives. These agencies frequently evaluate risk through isolated mandates (e.g. invasive species control, drug authorization) with limited regard for administrative efficiency or semantic data alignment.

Because the border touches dozens of distinct regulatory entities, customs modernization is a whole-of-regulatory-system challenge. True border efficiency cannot be achieved solely through customs agency coordination; it requires bringing sectoral regulatory rules and international treaty bodies into alignment with modern digital data architectures.

Potential Areas for Practical Experimentation

With both US and EU customs architectures evolving, there is a window of opportunity to build interoperability into new systems now rather than attempt to retrofit it after each side’s architecture has become more deeply embedded.

Operational deployment by major markets can strongly influence the evolution and adoption of international standards. Rather than attempting comprehensive US-EU customs harmonization at the outset, targeted demonstrations could test where interoperability produces measurable gains while preserving each jurisdiction’s preferred architecture. If the US and EU demonstrate a functional, data-centric framework for cross-border trade, their combined economic weight could establish a de facto global standard that third countries will be attracted to adopt and join.

Potential areas for experimentation and pilot projects include:

1. Critical Data Alignment: Identify a limited set of high-value data elements – such as entity identity, trusted-trader status, product identity, and origin – and test whether harmonized definitions and verification methods allow information generated in one system to be relied upon in the other.
2. Trusted-Trader Pilots: Test whether existing mutual recognition arrangements can be extended or deepened for selected trusted traders, products, or trade corridors, with measurable effects on compliance costs, clearance times, and enforcement effectiveness.
3. Product-Level Verification: Explore whether emerging tools such as Digital Product Passports can provide customs authorities with verified product-level information without requiring the US and EU to adopt identical underlying systems.

Moving Forward

The US and EU do not need identical customs systems to make transatlantic trade faster, safer and more resilient. What they require is an architecture of trust – a framework capable of recognizing critical data, entity identities and risk assessments across jurisdictions. With both sides currently redesigning their customs platforms, there is a distinct, time-sensitive window to build mutual reliance directly into the foundation of transatlantic trade. Demonstrating this capability through pragmatic pilots could help establish a transatlantic benchmark for modern digital border management and provide models that other trading partners could choose to adopt.