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Standard Guide for Supply Chain Traceability, Authentication, Verification, Validation, and Oversight Using Emerging Technologies Including Blockchain
1.1 Data Sharing Security Measures—This standard presents an opportunity to share more thorough, reliable upstream data, in a way that also preserves and protects companies’ intellectual property and upstream documents. The use of a technology platform, underpinned by a distributed ledger, that is, blockchain, allows data and documents to be gathered directly from the industrial IoT systems of upstream supply chain participants and shared in accordance with what has been agreed between upstream companies, downstream customers, and regulators. In addition, companies agree to how data will be stored and protected, in alignment with relevant global standards for data security.
1.2 Safety and Technology Considerations—This standard does not purport to address any safety concerns associated with the use of particular products. It is the responsibility of the user of this standard to establish appropriate safety, health, and environmental practices and determine the applicability of regulatory limitations prior to use. Additionally, critical emerging technologies that could be utilized to implement the standard (for example, blockchain and other forms of distributed ledger technology, geospatial technologies, artificial intelligence) can be designed differently for each implementing entity, depending on its needs related to cost, security, scalability and performance, such as transaction throughput, network latency, and storage requirements.
1.3 Key Components of this Guide—This guide contains four main components, forming a multi-layered approach to help national authorities determine the veracity of claims regarding certain attributes of materials, components, and products in shipments and supply chains with a high level of confidence.
1.4 Tracing Materials—The guide provides guidance for the physical tracing of materials from origin to final product using reliable supply chain data and documentation. Such traceability allows for trustworthy data of the inherited supply chain activity within a product, as well as the continuous monitoring of this upstream activity so that importers or downstream manufacturers and transporters, or both, can know if their suppliers are consistently acting in compliance with their requirements.
1.4.1 The guide provides technology-neutral, vendor-neutral methodologies to track the origin, production flow, and incorporation of specific materials and components into specific products, using Certificates of Authentication (COAs). Creating a tamper-evident, time-stamped ledger for this purpose ensures that all documentation is protected from fraudulent practices, such as counterfeiting or forgery, or both. As a result, demonstrating compliance with this guide will provide a high level of confidence that a product fulfills relevant criteria, conditions, or requirements, or a combination thereof, relating to specific claims, such as origin, production flow, the sourcing of local or recycled content, or both, and the presence or absence, or both, of forced labor, presence or absence, or both, of entities of concern.
1.5 Verification and Validation:
1.5.1 The standard provides several approaches for national authorities to deploy in order to verify and validate that the tracing and authentication provisions have not been undermined by bad actors. These tools include:
1.5.1.1 creating risk tiers and applying more rigorous requirements where there is higher risk;
1.5.1.2 creating and updating decision rules within the system to raise flags for recognized third parties and national authorities when reviewing the documentation;
1.5.1.3 providing guidance on how to use industry (for example, sales) and geospatial data to detect potential fraud;
1.5.1.4 populating a continuous monitoring messaging system to authenticate third parties who monitor supply chains via tools such as annual audits (that is, to prevent companies from keeping two sets of books) and AI- and human review (that is, to help spot anomalies in the documents that indicate fraud).
1.5.2 The guide contains appendixes that set out the business logic on a sector-specific basis that can be used by a national authority to design their protocols, such as when flags should be raised for further investigation.
Note 1: To facilitate adoption and marketplace fairness, much like the airline travel has the system that records flights, the ground transportation system is in need of a “ground traffic controller” that standardizes the identifier and status information for communication between various stakeholders supporting the goods movement process and the ability to certify authentication from paper documents, or from the digital twin transaction that is being updated by authorized stakeholders during the goods movement process. This communication network would be best served as a public private partnership (PPP) that is managed on a cost plus basis as it is a service to the industry to have a trusted protocol and mechanism to enable trusted communication between authorized stakeholders and their contracted logistics service providers. A collaborative governance model, allowing participation from stakeholders across the supply chain enables entity validation, transaction validation and communication standards to share data elements that inform and enable additional access, based on role and permissions to a technology platform that logs and maintains the network and security of the processed updates on standardized transactions.
1.6 Governmental Oversight and Participation—This guide recognizes that national authorities have inherent governmental responsibility for administering and enforcing their own laws, such as determining the admissibility of goods and whether the goods comply with relevant criteria, conditions, or requirements. Thus, it is critical that such authorities maintain rigorous oversight. The fourth part of the guide sets out a third-party conformance scheme based on relevant international standards for conformity assessment that such authorities can apply and administer – with any necessary jurisdiction-specific modifications that may be warranted – to recognize entities that meet certain criteria to provide tracing, authentication, and auditing services that conform with this guide. Given market competition and resource constraints that such regulatory authorities typically face, we recommend adoption of a rigorous, well documented third-party scheme which can increase the effectiveness of administration and support enforcement efforts at minimal cost; this, in turn, will increase industry compliance with relevant legal and regulatory requirements. This ecosystem is a natural fit for a neutral PPP to be selected for transparent function of messenger, clearinghouse, and single source of truth.
1.7 Purpose and Benefits of Distributed Ledger Technology—The purpose and benefit of adopting a distributed ledger technology is primarily shared responsibility (immutability, constant visibility, greater accuracy, greater data protection and greater overall efficiency) and governance to enable the participants to engage in the setting of rules and permissions. The implementation of immutable distributed ledger technology enhances the transparency, traceability, and trustworthiness of the supply chain, verifying product quality and authenticity while reducing fraud, tampering, and other malicious activities. Additionally, leveraging distributed ledger technology allows the owner or importer of a product and its digital identifier of the Certificate of Authenticity (COA) to protect their intellectual property by sharing information to necessary stakeholders via different permissions. This ensures that no third party within the supply chain can modify any part of a COA without the explicit consent of its rightful owner. By establishing an immutable record of authenticity, businesses can safeguard proprietary information, maintain regulatory compliance, and uphold the integrity of their certified products. In Appendix X1, DLT example COA is minted on a blockchain, featuring a screenshot of the summary page on the front of a Non-Fungible Token (NFT) with the unique traits of that product's attestation tagged as metadata traits.
1.8 Positioning related to other standards, initiatives and developments—In this section, the positioning and relationships with other standards, initiatives and developments are described.
1.9 Alignment with International Standards and Guidelines:
1.9.1 This international standard was developed in accordance with internationally recognized principles on standardization established in the Decision on Principles for the Development of International Standards, Guides, and Recommendations (“Decision”) issued by the World Trade Organization’s (WTO) Committee on Technical Barriers to Trade (TBT Committee).
1.9.2 One of the key principles contained in the Decision is the development dimension:
1.9.2.1 “Constraints on developing countries, in particular, to effectively participate in standards development, should be taken into consideration in the standards development process. Tangible ways of facilitating developing countries’ participation in international standards development should be sought. The impartiality and openness of any international standardization process requires that developing countries are not excluded de facto from the process. With respect to improving participation by developing countries, it may be appropriate to use technical assistance in line with Article 11 of the WTO’s Agreement on Technical Barriers to Trade. Provisions for capacity building and technical assistance within international standardizing bodies are important in this context.”
1.9.2.2 Consistent with this principle, ASTM waives membership fees for experts from developing countries. In addition, ASTM F49 Committee meetings are always virtual or hybrid, which eliminates travel costs for participants. Further, the F49 Committee is open to holding webinars and conducting pilot projects for governments and other interested parties in developing countries who want to engage in development of the standard, including with respect to sector- or claim-specific appendixes, or learn how to implement or apply the standard.
1.10 Alignment with International Guidelines on Conformity Assessment—This international guide was developed in accordance with internationally recognized guidelines on conformity assessment procedures established in the Non-Prescriptive Practical Guidelines to Support Regulators in the Choice and Design of Appropriate and Proportionate Conformity Assessment Procedures issued by the WTO TBT Committee.
1.11 Use of Critical Emerging Technology in Supply Chain Management—This guide also provides operational details for tracing and tracking both physical and digital assets for transactions on a digital ledger blockchain technology storage platform. This represents a significant technological shift where digital assets can be stored on a public or private digital ledger, open for some or all to view and verify. This marks a paradigm shift from the private cloud storage currently used in Web2 infrastructure platforms. As a particular example, Appendix X1 provides minimum requirements for the secure verification and authentication of a COA, ensuring transparency and trust while tracking any product through its supply chain on a blockchain.
1.12 This standard does not purport to address all of the safety concerns, if any, associated with its use. It is the responsibility of the user of this standard to establish appropriate safety, health, and environmental practices and determine the applicability of regulatory limitations prior to use.
1.13 This international standard was developed in accordance with internationally recognized principles on standardization established in the Decision on Principles for the Development of International Standards, Guides and Recommendations issued by the World Trade Organization Technical Barriers to Trade (TBT) Committee.
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