The Customs Administration of the Czech Republic and ERIAN
A system for on-line electronic risk analysis of customs declarations (ERIAN) was developed at the Customs Administration of the Czech Republic as part of a PHARE project in 2004 to 2005. KOMIX, an important player in the area of IT, was selected based on a public tender to provide the complete supply of this unique system. The main objective of the new system was to supplant the existing outdated semiautomated local system of so-called “blocking tables”, whose functionality was limited, with a new system that would be centralised, have more flexibility for specification of risks searched and sufficient permeability. The solution chosen was designed as a versatile expert system working in real time, with a knowledge base fully manageable in a user-based way. Compared to other EU Member States, the implementation of the ERIAN system ranked the Czech Republic among the first handful of countries with a modern, full-fledged automated electronic risk analysis implemented.
Motivations and requirements
The system built processes about 25 thousand declarations in 24 hours on average; within that, about 80% are handled within 6 hours. In peak times, it handles about 100 declarations a minute. Since the Customs Information System is dependent on fast interaction with the businesses, it required a system architecture that would enable it to assess incoming declarations within seconds depending on their complexity.
At the same time, the architectural design had to anticipate a future significant growth in the numbers of documents assessed, primarily as a consequence of the planned involvement of the system in the processing of other agenda types. An important, if not the crucial, requirement for the newly built system was that it should be as open as possible in terms of management, maintenance and expansion of the set of a priori information based on which the document assessment proceeds. That means, the user should be able to modify and edit the set of a priori information as easily as possible without the necessity of programming interventions in the system. An equally important reason for the user management of the set of a priori information is the fact that the bearers of knowledge of suspicious behaviour patterns are specialists among the users, not the developers. Last but not least, an important reason is that the risky behaviour patterns and their description are the most valuable, thus most confidential, part of the system, and it is therefore appropriate that as few people as possible are aware of its content.
As mentioned above, ERIAN primarily performs electronic risk analysis of customs declarations being processed. However, it is not restricted to pure on-line analysis, i.e., analysis only based on static a priori information – risk profiles. To partly eliminate the main disadvantages of pure on-line analysis (particularly the inability to detect new risk behaviour patterns), the ERIAN system implements a connection of pure on-line analysis with off-line analysis. This connection expands the capabilities of the on-line analysis with the ability to automatically adapt behaviour to continuously changing characteristics of the real world and risky behaviour.
The transaction begins when, to put it simply, the declarant submits a customs declaration, the system or the customs official accepts it, and the application submits it for a risk assessment in the XML format. ERIAN is of a centralised nature, i.e., all the declarations accepted are sent for assessment to the centre, and replies in the XML format are returned.
The risk assessment proceeds based on predefined risk profiles. There are two types of risk profiles in ERIAN:
- tactical profiles (also known as blocking profiles)
- strategic profiles
The purpose of tactical profiles is to intercept as easily as possible a relatively simple, specific model of a risky situation, typically a requirement to halt or check a notified shipment, etc. The strategic profiles have a different purpose, nature and philosophy. Unlike the tactical profiles, whose purpose is simplicity, the strategic profiles give their maker a full freedom and a very wide range of tools enabling him to formulate even very complex models of risk situations.
In contrast to tactical profiles, the setting up of strategic profiles requires very knowledgeable makers, who must be perfectly conversant with the factual content of the issue to be modelled, and also have some experience of algorithmization. The reason is that the strategic profiles provide a general development environment that can employ both imperative and declarative programming elements as needed. Declarative programming in particular is a very powerful tool for formalising the required model without having to define the assessment procedure imperatively. Conversely, if needed, a strategic profile may contain a set of complex algorithms as well.
When setting up the profiles, the operator greatly draws on off-line analyses of historic data stored in the data repository. This is done using various analytical tools, which are not part of the ERIAN system, as is not the data repository. There is a direct link between the data repository of off-line analysis of the data stored in it, and the risk profiles in ERIAN, in the form of automated calculations of external parameters for some strategic risk profiles.
The implementation of ERIAN used the following technologies:
- Data exchange (incoming declarations, assessment results): XML
- Profile management: .NET 4+
- Client applications: .NET 4+
- Critical components: C
- Databases: MS SQL
- The .NET and MS SQL technologies were chosen by the client as part of the assignment.
ERIAN has turned out to be applicable not only for the area of assessment of risk of customs declaration in the Czech Republic and Serbia, but its versatility has made it applicable in other areas, such as:
- Health insurance statement verification for VoZP
- Workflow management in the National Schengen Information System (the Police Presidium)
- Optimization of the instruments used in claim recovery (Vostok Finance Group, Ukraine)
Further expansion to the potential applications has been enabled by opening the ERIAN system towards additional database platforms (such as Oracle).
The uniqueness of the system consists primarily in the extent to which users can alter the system behaviour by means of strategic profiles and adapt it to new findings and needs without the necessity of programming interventions in the system. Furthermore, it comprises the class of tools available to the user by means of the strategic profiles, the automatic expansion of on-line analysis with results of off-line analysis and, last but not least, the efficiency of processing and openness towards changes and processing of other agendas.
ERIAN is such a versatile instrument that it can be implemented in other areas as well (banking, insurance, healthcare, etc.) without fundamental change to the system, which can handle things such as regular portfolio scanning thanks to its high operating speed.