A data standard for exchanging tariff policy information

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Title

A data standard for exchanging tariff policy information

Category

• Data
• Document
• Technical
• Other Suggestions

Challenge Owner

• Simon Worthington (@simonwo), Data Standards Expert, Department for Business and Trade (DBT)
• Stephen Corder (@SteveCN7), Tariffs Senior Product Manager, Department for Business and Trade (DBT)
• Siân Thomas MBE, Chief Data Officer, Department for Business and Trade (DBT)

Short Description

This challenge aims to establish an open data standard for the exchange of
tariff policy information between all parties involved in international trade
with the United Kingdom.

All UK trade policy is encoded as structured data and entered into a ledger
database. The Department of Business and Trade (DBT) and His Majesty's Revenue
and Customs (HMRC) are responsible for keeping the ledger timely and accurate.
The database derives from the TARIC3 database published by the EU for its Member
States, with some UK-specific modifications to support an independent trading
regime.

HMRC, HM Border Force and DEFRA are responsible for enforcing trade rules for
the United Kingdom. Jersey and Guernsey have separate customs offices that
enforce rules for the Channel Islands. These bodies all consume the database and
use the data to apply the correct trade rules at the right time.

Outside government, there's a broad international trade community that also
consumes the database. Freight companies, other national governments and other
large organisations pull the data into their own systems. GOV.UK services such
as the Online Tariff Service also consume the database to provide a
human-friendly view.

TARIC3 is not standardised – it is a long-standing database that the EU
maintains for its own purposes. There is no open canonical documentation on how
the data works or what it means. There is currently no record of how the UK has
modified TARIC3 structures and semantics to work for its own needs. This makes
it challenging to build or procure new software that can work with UK tariff
data.

We will need to update the way we communicate tariff information as the user
needs of both tariff data publishers and consumers in the UK changes over time.
We also may need to respond to the EU's changes to TARIC3 to keep our UK
specific modifications compatible, which makes things easier for consumers. We
need a way to propose and agree changes amongst ourselves in line with the Open
Standards Principles.

By standardising the schema and semantics for tariff data in an open standard
with clear, precise language and publicly accessible governance arrangements, we
will ensure that future changes can be made in a stable and controlled way and
with full visibility to everyone in the international trade community that uses
our tariff data.

You can also read answers to the 47 open standard assessment
questions.

User Need

There is a broad set of organisations that work with tariff data:

• UK government departments author the data and consume it to provide services
  to the other groups in this list, such as HMRC's Online Tariff Service which
  displays tariff rates and rules for individual products to SME users, or
  Defra's IPAFFS service which provides biosecurity monitoring for imports of
  animal and plant products
• Customs officers in HMRC and Crown dependencies Guernsey and Jersey consume
  the data to enforce customs rules, such as applying the correct amount of
  taxation on declared imports and restricting the exportation of controlled
  goods like firearms subject to licenses
• Logistics providers, other national governments, and their suppliers
  consume the data in bulk to power their business processes, such as
  pre-calculating the possible import duty on future shipments, ensuring
  supplied documentation is up to date prior to declaration, or providing
  guidance to their own users
• Independent international traders, such as manufacturers, supermarkets,
  and farmers, consume a subset of the data for their own products of interest
  or supply chain, and are also interested in future changes to the data to
  prepare for changes in legislation

Within each of these organisations, there are a set of users who have different
jobs to be done with tariff data:

• Technical architects and engineers need to consult the standard to learn
  about its data structures and how to solve problems using the data
• User-centred designers and business analysts need to understand what
  each part of the tariff data means and how it changes to integrate the data
  into their services and processes
• Project managers need to know about upcoming changes so that they can plan
  work effectively
• Policy owners need to design policy that is easy to operationalise by
  understanding the capabilities of the data formats and therefore the systems
  that consume them

Whilst the Department for Business and Trade does the lion’s share of data
management for the UK Tariff, they work with over 30 different policy teams from
11 departments who are actually setting the trade policy. HMRC also contributes
quota volumes and VAT/excise rates to the final dataset. In the future, we
expect more of those departments to want to hold and contribute data about their
policy directly. Part of our mission with setting out this standard is to make
it easier for those teams to understand how to contribute.

Expected Benefits

We expect an open standard to bring the following benefits:

• Removal of ambiguity around how tariff data works: given that there is no
  canonical and exhaustive documentation, Government systems that have been
  developed by different suppliers are not completely aligned on the semantics
  or validation rules. This causes significant operational headache as data
  moves between systems. We expect a standard to provide a clear and unambiguous
  interpretation of data to all suppliers and make procuring support and
  modifications more straightforward.
• Standardisation of non-structural elements: where TARIC3 provides a data
  structure, it does not include other key aspects that require standardisation,
  such as the precise semantic meaning of fields, or sources/content of key code
  lists and their meanings. This information is equally important for correct
  interpretation of data. Without well-defined definitions, this information has
  to be reverse-engineered by comparing data to the textual content of trade
  legislation which is labour intensive and error-prone.
• Governance around changes: historically Government departments have made
  changes to tariff data interfaces unilaterally. These decisions have at best
  been made bilaterally between major Government users and without necessarily
  considering or informing smaller operators or non-Government users. This
  practice risks breaking key services or business processes downstream. We
  expect an open standard to provide a public mechanism to feedback on proposed
  standard changes and avoid breakage of consumers.
• Clarification of relationship to TARIC3: we do not believe that the
  changes the UK needed to make to TARIC3 to support an independent trade regime
  are currently well understood and that most users assume that the EU and UK
  treatment are identical. There is therefore risk that users misinterpret UK
  data. We expect an open standard to clarify this position, make clear what
  parts of the standard are divergent from TARIC3, and advise users on how to
  reconcile these differences.
• Joined up approach to upstream changes: today there is significant risk
  that Government departments would diverge on their response to upstream
  changes in TARIC3 because these changes are likely to manifest at contract
  renegotiation time with system suppliers. This plays into the ambiguity
  problem above and risks further divergence amongst key systems. There is also
  little incentive for UK system owners to keep pace with changes to TARIC3 but
  significant benefit of doing this for the end-user. We expect an open standard
  to bring users together to make a holistic response as "one trade community"
  to upstream changes.
• Open the door to future shared standard: whilst incentives are not
  currently well aligned between the EU and UK to collaborate on a shared
  treatment of tariff data, we expect an open declaration of behaviour and
  mature governance groups to be a stepping stone towards any possible future
  standard that works for the entirety of the European continent and beyond.

Functional Needs

• Allow full expression of the UK's independent trade regime and include
  • Duties that apply to goods imported from other countries and territories
  • Conditions that need to be met to import or export certain goods
  • Quantities of goods that can be imported with reduced rates
  • The legislative basis for these duties, conditions and quotas
• Record validity periods for these policies to the precision of a single day.
• Record a full version history of the data as first-class, allowing users to
  understand what changes are being made to the data and remain informed of
  corrections to errors.
• Be backwards compatible with TARIC3 data structures, so that large systems
  that already expect data in this format do not have to be redesigned.