GTS100

GTS100
SAP Global Trade Services

mySAP ERP Financials
Date Training Center Instructors Education Website
Participant Handbook
Course Version: 2006/Q2 Course Duration: 3 Days Material Number: 50079535
An SAP course - use it to learn, reference it for work
Contents
Course Overview ........................................................... v
Course Goals ............................................................ v Course Objectives ...................................................... v
Unit 1: Introduction........................................................ 1
SAP GTS: Structure and Functions ..................................2 System Architecture .................................................. 12 Basic Regulatory Principles ......................................... 33
Unit 2: Export Processes .............................................. 51

Lists of Goods ......................................................... 53 Export Licenses ....................................................... 62 Export Declarations................................................... 76 Transit Procedure at Export ......................................... 87 Letter of Credit ........................................................ 98 Restitution.............................................................103
Unit 3: Import Processes.............................................. 113

Nomenclatures and Classification ................................. 114 Import declaration....................................................126 Transit Procedure at Import.........................................137 Bonded Warehousing Procedure ..................................150 Forms of Import Control .............................................161
Unit 4: Origin of Goods and Preferences ......................... 179

Originating and Non-Originating Goods...........................180 Using Preference Determination in the Export Process ........189
Unit 5: Sanctioned Party List Screening .......................... 205

Boycott Lists ..........................................................206 Performing Sanctioned Party List Screening .....................214
Index ....................................................................... 229
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Course Overview
This course provides an overview of the product SAP Global Trade Services (SAP GTS). It takes into account matters concerning both customs law and foreign trade law.
Target Audience
This course is intended for the following audiences: Project team members (technical department and IT) Consultants Both without prior knowledge of SAP GTS
Course Prerequisites
Required Knowledge
Basic knowledge of processing sales orders and external procurement in SAP R/3 or SAP ECC
Recommended Knowledge
Basic knowledge of foreign trade law and customs law Basic knowledge of foreign trade functions in SAP R/3 or SAP ECC
Course Goals
This course will prepare you to: Understand the benefits and the structure of the SAP GTS product Explain the range of functions provided in SAP Compliance Management, SAP Customs Management, and SAP Risk Management Use SAP GTS functions in import and export processes
Course Objectives
After completing this course, you will be able to: Understand the background of control regulations with regard to foreign trade law and politics Take these control regulations into account in import and export processes Explain the requirements of customs law in foreign trade procedures and how they are represented in the system
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Course Overview
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SAP Software Component Information

The information in this course pertains to the following SAP Software Components and releases:
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Unit 1
Introduction
Unit Overview
This unit is intended to provide an insight into the structure of SAP GTS and to show how its services can be used in import and export processes. The legal background of the product's functions is also highlighted.
Unit Objectives
After completing this unit, you will be able to: Describe the SAP GTS product structure Explain how the services within SAP GTS are used in goods movements across borders Explain the basic system requirements for using SAP GTS Describe how the SAP GTS system and the commercial feeder system communicate Transfer master data from an SAP feeder system to an SAP GTS system Understand the background of control regulations with regard to foreign trade and politics Map these control regulations in SAP GTS and take them into account in import and export processes Explain the requirements of customs law in foreign trade procedures and implement these in SAP GTS
Unit Contents
Lesson: SAP GTS: Structure and Functions ...................................2 Exercise 1: Introduction to SAP GTS .......................................9 Lesson: System Architecture................................................... 12 Exercise 2: Organizational Units and Master Data ..................... 23 Exercise 3: Customs Document Types ................................... 29 Lesson: Basic Regulatory Principles .......................................... 33 Exercise 4: Legal Regulations ............................................. 43
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Unit 1: Introduction
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Lesson: SAP GTS: Structure and Functions

Lesson Overview
SAP GTS combines various services that you can use for your foreign trade processes. This lesson provides an insight into the structure of the product and how its subfunctions are used in import and export processes.
Lesson Objectives
After completing this lesson, you will be able to: Describe the SAP GTS product structure Explain how the services within SAP GTS are used in goods movements across borders
Business Example
Your company has branch offices in the United States and in the European Community (EC). It manufactures technical products that are sold throughout the world and procures components and trading goods from vendors in various countries.
Goods Movements Across Borders

For many companies, the import and export of goods is essential in many everyday business processes: The purchasing department orders goods for the company's warehouse or for end customers from vendors that are based abroad, and the sales department processes orders from foreign customers. These orders are subsequently delivered using transit procedures.
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Figure 1: Goods Movements Across Borders
In contrast to domestic trade, foreign trade is monitored by specific authorities: Regulatory agencies check whether imports and exports are permitted under foreign trade law and issue any licenses that are necessary. All international goods movements also have to be reported to the appropriate customs offices, using special forms or electronically. When goods are imported, import levies are imposed in the form of duties and/or specific taxes. When you are performing international business transactions, you usually have to submit specific documents in addition to the standard accompanying documents used in domestic business transactions, such as commercial invoices, shipping documents, and packing lists. For example, the authorities in many destination countries require certificates of origin from authorized public institutions, such as chambers of industry and commerce. If you wish to claim preferential treatment when paying import duties (customs tariff preference), you have to present appropriate proof of origin (for example, a movement certificate) to the competent customs office.
Product Structure
SAP Global Trade Services (SAP GTS) consists of three subsolutions: SAP Compliance Management, SAP Customs Management, and SAP Risk Management.
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Figure 2: Product Structure
SAP Compliance Management contains all the functions relating to import and export control regulations. This subsolution allows you to monitor procedures that are subject to licensing requirements and to comply with legal regulations that restrict or even prohibit trade with individual states, political groups, and individuals. SAP Customs Management supports customs procedures. The main emphasis is on the connection to electronic customs procedures and the printing of accompanying documents, but there are also functions for classifying goods. SAP Risk Management is the third subsolution added to SAP GTS 3.0. This is used for preference determination and the management of vendor declarations in relation to the issue of preference documents. It also supports the export of CAP products that qualify for a refund. The letter of credit administration has been added to SAP GTS 7.0. The SAP Compliance Management subsolution consists of the services below: Embargo Check Sanctioned Party List Screening Product-Related Check (Legal Control)
All the check functions can be used in both import and export processing, and each of the services can be activated independently. Note: The different check functions used in the SAP Compliance Management services are explained in more detail in the next three units.
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SAP Customs Management comprises the two services below: Customs Processing Transit Procedure
The 'Customs Processing' service supports specific electronic customs declaration procedures and the printing of customs documents. The transit procedure service allows you to use the New Computerized Transit System (NCTS) in Germany, France, the Netherlands, and Switzerland by enabling you to electronically process this particular customs procedure. The SAP Risk Management subsolution offers the services below: Preference Processing Letter of Credit Processing Restitution
Using the preference processing service, you can perform preference determination and manage vendor declarations. If you are exporting CAP products, you can apply for and manage CAP licenses and restitutions, using functions in the restitution service. The letter of credit processing service enables you to manage letters of credit in SAP GTS. Note: These services will also be covered in more depth later.
SAP GTS in the Company and in Logistics Processes

Measures against international terrorism, and the fall-off in paper-based communication brought about by electronic procedures have had far-reaching effects on our requirements of systems that model foreign trade processes. Not only is SAP GTS able to fulfill the considerably stricter requirements of foreign trade law, it can also connect the processes in your system to electronic customs procedures.
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Figure 3: SAP GTS in the Company
SAP GTS serves as a central gateway to the outside world. While previous complex system landscapes often made data redundancy and manual processing unavoidable, SAP GTS unifies and centralizes import and export processes. All the data required for carrying out foreign trade transactions is contained in SAP GTS in bundled form. SAP GTS also takes care of communication with the authorities and, if necessary, with foreign trade partners. This unified procedure makes it significantly easier to achieve 100% compliance with legal requirements. It thus reduces the risk of a company incurring sanctions by inadvertently breaking the regulations a major advantage, considering the often draconian nature of such sanctions. The connection to electronic customs procedures greatly speeds up import and export processes. All the relevant documents can be systematically archived and retrieved for the purposes of external audits.
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Figure 4: SAP GTS in Logistics Processes
The subsolutions SAP Compliance Management, SAP Customs Management, and SAP Risk Management manage all cross-border goods import and export processes, regardless of the type of feeder system. As early as the purchase order creation stage of the purchasing process in the feeder system, you can use SAP Compliance Management to check whether the planned import is permitted and, if necessary, stop the order from being processed further. If the import is permitted, but requires a prior license from an authority, the license can be applied for in good time and stored in the system. Sales staff can use SAP Compliance Management when putting together a request for quotation or an order to determine whether they are permitted to make a delivery to a particular customer. If a license is required for an export, you can apply for the license from the authorities and manage it in the system, just as you do in the import process. When goods are being exported, staff in the technical department can create the documents or messages required for carrying out the customs procedure (export procedure, transit procedure) directly from SAP Customs Management and then send them to the authorities. Depending on the country of destination, it is also advisable to perform preference determination in SAP Risk Management for the product that is to be exported. If you can export goods as originating products, the customer pays considerably less import duties due to customs tariff preferences, and you thereby strengthen your own competitive position. You may want use a letter of credit to guarantee payment by the customer. SAP Risk Management supports the processing of payment transaction documents.
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In the import process, SAP Customs Management supports the technical department with communication with the authorities while the goods are being transferred to a customs procedure. If you are a consignee in the electronic transit procedure, you can create the messages required to discharge the procedure in SAP Customs Management. Also, customs values can be calculated for every import consignment.
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Exercise 1: Introduction to SAP GTS

Exercise Objectives
After completing this exercise, you will be able to: Obtain an overview of SAP GTS
Business Example
You want to find out about SAP GTS from sources that are accessible to the public.
Task:
Obtain an overview of SAP GTS on the Internet. 1. Call SAP's Web site, http://www.sap.com. Select your country version, then select Solutions and SAP xApps. This takes you to a Web site that contains detailed information on SAP GTS. Search for information that interests you. What other way can SAP customers and partners obtain information?
2.
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Solution 1: Introduction to SAP GTS

Task:
Obtain an overview of SAP GTS on the Internet. 1. Call SAP's Web site, http://www.sap.com. Select your country version, then select Solutions and SAP xApps. This takes you to a Web site that contains detailed information on SAP GTS. Search for information that interests you. a) b) c) d) 2. Choose Start ! Training@sap to start the Internet Explorer. To go to the SAP home page, enter http://www.sap.com in the browser window. In the upper-right third of the screen, choose Country Sites, and on the next page, select your country version. Solutions contains a link to the SAP xApps. The various SAP xApps are listed on the right-hand side. At the bottom of the list, you will find a link to the SAP GTS Web site. Call this link. Answer: SAP customers and partners can use the SAP Service Marketplace. You will find it at http://service.sap.com. You require a user ID (S-User) to access this site.
What other way can SAP customers and partners obtain information? a)
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Lesson Summary
You should now be able to: Describe the SAP GTS product structure Explain how the services within SAP GTS are used in goods movements across borders
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Lesson: System Architecture

Lesson Overview
You require a specific system architecture to use SAP GTS. In this lesson, you will become familiar with the basic principles of this system architecture.
Lesson Objectives
After completing this lesson, you will be able to: Explain the basic system requirements for using SAP GTS Describe how the SAP GTS system and the commercial feeder system communicate Transfer master data from an SAP feeder system to an SAP GTS system
Business Example
Your company, IDES AG, intends to use SAP GTS in its branch offices in the United States and Germany. It checks the required system settings.
System Architecture
The SAP GTS product is based on SAP NetWeaver Application Server technology. The actual SAP GTS software is the SLL-LEG add-on. For feeder systems with release levels SAP R/3 4.0B to 4.7 inclusive, and SAP ECC 5.0, the PI_2004.1* plug-in is required in the corresponding release-dependent version. This plug-in allows you to use SAP GTS functions, such as the foreign trade law audit of documents and master data, in the feeder system. In SAP ECC 6.0, the plug-in functions are part of the SAP_APPL component. The software component SLL-LEG is an add-on to the SAP NetWeaver Application Server. It contains the functions of the SAP Compliance Management, SAP Customs Management, and SAP Risk Management Note: You will find more details on plug-ins in SAP Note 858706. In this note you can check, for example, which version of the plug-in is required for which feeder system release or SAP GTS release.
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Figure 5: SAP GTS in the System Landscape
You can use standard interfaces to connect SAP GTS to SAP R/3 and SAP ECC systems and/or to other solutions in the mySAP Business Suite, such as mySAP Customer Relationship Management (mySAP CRM), or mySAP Supplier Relationship Management (mySAP SRM). You can also connect the system to third-party systems. For detailed instructions on how to configure SAP GTS, visit the SAP Service Marketplace (http://service.sap.com) by choosing the instguides quick link.
Figure 6: Basic Principle of System Architecture
The feeder system and the SAP GTS system exchange data directly by means of Remote Function Calls (RFC). Before this can happen, a logical system name ('logical system') that is unique in the system landscape has to be assigned to both systems. SAP recommends the naming convention <system key>CLNT<client key>. Clients are then assigned to the logical system names. Feeder systems with similar properties are grouped together in logical system groups. Note: Such a system group is also required to connect only one feeder system to the SAP GTS system.
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An RFC calls up a function module in an SAP system from within another system. RFCs allow you to set up connections between different SAP systems or between an SAP system and a third-party system. In third-party systems, specially programmed functions are called up instead of the function modules. The interfaces of these functions simulate function modules. In an SAP R/3 or SAP ECC system, you can perform all the substeps required to configure an RFC connection in transaction /SAPSLL/MENU_LEGALR3 in the SAP GTS Cockpit, on the Basic Settings tab page. In the SAP GTS system, you can use transaction /SAPSLL/MENU_LEGAL to call a corresponding Cockpit and choose the System Communication/Workflow button. You must also enter settings in SAP GTS Customizing (SAP Global Trade Services ! System Communication ! System Connection to Feeder System). Note: The steps required to configure the system connection are described in detail in the configuration guides for the SAP GTS subsolutions SAP Compliance Management, SAP Customs Management and SAP Risk Management. You will find these guides in the Service Marketplace, by choosing the instguides quick link.
Master Data Replication

You forward all the business partner records and product master records, and any bills of material relevant to preference determination, from your feeder system to the SAP GTS system with a direct RFC. A distinction is made between the initial transfer of data when the SAP GTS system goes live and the regular transfer of new or changed data in day-to-day processes. To perform the initial data transfer from SAP R/3 or SAP ECC, you use the transactions /SAPSLL/MATMAS_DIRR3 (material master), /SAPSLL/DEBMAS_DIRR3 (customer master), /SAPSLL/CREMAS_DIRR3 (vendor master), and /SAPSLL/BOMMAT_DIRR3 (bills of material). You can find these and all other data transfer transactions in the SAP GTS Cockpit of the feeder system (transaction /SAPSLL/MENU_LEGALR3).
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Figure 7: Master Data Distribution
After the initial transfer of data records, the product master data , business partner master data, and any bills of material, are available in the SAP GTS system. This master data is in part in SAP GTS. For example, commodity codes for the customs processing and the foreign trade law controls are assigned to the product master records, and business partners undergo sanctioned party list screening. Regular transfers of new and changed data are carried out using change pointers. If there are changes to master data, the system writes change pointers, depending on the default settings. On the basis of these pointers, the system determines data records that have been changed and transfers only these records to the SAP GTS system. Usually, jobs are defined for regular data transfer using the RBDMIDOC program. This program reads all the change pointers for a message type that have not been processed yet (for example, /SAPSLL/MATMAS_SLL for material masters) and uses an RFC to forward the relevant master records to the SAP GTS system. Note: For this purpose, SAP GTS uses what are known as reduced message types. These message types only contain a small number of the fields of the complete master record, namely only those required by SAP GTS. Only the changes to these fields are logged with a change pointer.
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Figure 8: Example: Transferring a Product Master
All the goods to be imported and exported are mapped in product masters in SAP GTS. You send material master data from the feeder system to the SAP GTS system, which then automatically creates product masters for the transferred material master records. The data transferred from the feeder system includes goods descriptions, units of measure, and in SAP GTS 7.0, also weights. In SAP terminology, a product master's data record consists of various views: For example, along with the General Basic Data, there are the Classification and Legal Control views. The General Basic Data view contains the base unit of measure and possible alternative base units of measure from the feeder system material, as well as the internal SAP GTS product identification number. In the Classification View, the commodity code for classifying the product is stored in a customs tariff. The Legal Control view, which is intended for managing import and export controls, is very similar. It allows you to create a code that classifies the product for import or export control. Note: You can also transfer commodity codes from the feeder system (see the List of Goods and Nomenclatures and Classification lessons). However, SAP Customs Management and SAP Compliance Management provide much simpler functions for classifying product master data. Customer and vendor master records that you transfer from your SAP R/3 or SAP ECC feeder system to the SAP GTS system are stored there automatically in the form of SAP business partner master records. The address data of the feeder system master record is also transferred to SAP GTS. SAP business partners can be used in a number of different SAP systems (for example, to combine partner data that is distributed across multiple systems within a company). They are part of the cross-application functions of SAP R/3 and SAP ECC, but they are also used in the mySAP CRM application, for example.
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You define the exact function that an SAP business partner performs for your company by assigning a business partner role to it in the system. A number of pre-defined business partner roles are supplied for SAP GTS:
Figure 9: SAP Business Partner Roles
When you are creating a new SAP business partner, the system combines centralized and application-specific data. SAP business partners for SAP GTS are always of the type Organization. The SAP business partners for the customers and vendors transferred from the feeder system are automatically assigned the corresponding business partner roles customer (SLLCPC) and vendor (SLLCPS) by the system.
Organizational Structures
In SAP GTS, you map your own company using the organizational units foreign trade organization and legal unit.
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Figure 10: Organizational Units in SAP GTS
To use the SAP GTS functions, you must define at least one foreign trade organization. This organizational unit maps the customs and foreign trade law system in your company. If the feeder system is an SAP R/3 or SAP ECC system, the foreign trade organization is assigned to at least one company code. If the foreign trade organization represents more than one company code to the authorities, you can also make multiple assignments. A company code, on the other hand, can be linked to only one foreign trade organization. Likewise, at least one legal unit is required in SAP GTS. This legal unit is a plant in an SAP R/3 or SAP ECC feeder system. A legal unit can be assigned to multiple plants, but a plant can be linked to only one legal unit. A foreign trade organization and legal unit(s) are linked to each other in Customizing for SAP GTS. The two organizational units are required to enable you to transfer documents from the feeder system, among other things. If a foreign trade organization or legal unit cannot be identified in SAP GTS when you are attempting to transfer a document, you can create the document or save your changes in the feeder system, but you will not be able to create a customs document in SAP GTS. You define foreign trade organization and legal units as SAP business partners in SAP GTS. It is imperative to assign the correct business partner role of foreign trade organization (SLLFTO) or legal unit (SLLSIT). For the preference processing service in SAP Risk Management, there is the additional business partner role vendor declaration administrative unit (SLLMGR). If you want to manage the vendor declarations for the purposes of preference determination in SAP GTS, you additionally assign this business partner role to the SAP business partner of your foreign trade organization.
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Along with customers, vendors, foreign trade organizations and legal units, customs offices, other authorities and possible data providers are also required for the functions of SAP GTS. For these you also create SAP business partners in SAP GTS in the corresponding business partner roles (SLLCOF for customs offices, SLLAUT for other authorities and SLLDAP for data providers). Note: The data provider business partner role is of interest to you if you want to load data (such as goods numbers or boycott list entries) into your system in the form of XML files (see the Nomenclatures and Classification lesson).
Document Replication
Before you can use SAP Compliance Management, SAP Customs Management and SAP Risk Management functions, the logistics documents that are created in the feeder system at the preliminary stage or during an import or export process (for example, purchase orders, orders and billing documents) also require counterparts in the SAP GTS system.
Figure 11: Customs Document Types - Examples: SAP Compliance Management
To ensure that relevant documents are replicated for all your processes, you have to flag these document types as relevant to SAP GTS in the feeder system. In Customizing for SAP GTS, you define customs document types as corresponding documents for the document types flagged in the feeder system. You then need to assign these customs document types to the corresponding feeder system document types in a table specifically for this purpose. SAP Compliance
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Management and SAP Customs Management each have to have their own sets of customs document types defined for them. SAP Risk Management uses the document types from the other two subsolutions. The customs document type is assigned the control parameters that are essential for foreign trade processes (for example, number range keys, text determination procedures, and action profiles for communicating with the authorities). Note: To use the SAP Customs Management, it is not absolutely necessary to transfer documents from the feeder system to SAP GTS. However, it does significantly reduce the user's workload. The same procedure is also necessary at item category level. First, you have to define customs item categories. You then assign these to the corresponding document item categories from the feeder system. In SAP GTS, you usually need a smaller selection of item categories than those available in the feeder system. If the SAP GTS system does not find a counterpart for a feeder system document type that has been flagged as relevant to SAP GTS, the system cannot create the feeder system document. If there is no customs item category for the preceding document item category, the system creates the customs document for the feeder system document without the corresponding document item data. In the feeder system, business partners are usually already assigned specific functions or roles in the import or export process. For example, customers are sold-to parties, ship-to parties, and payers. However, these functions are not always performed by the same partner: A sold-to party might order goods from you for a third party.
Figure 12: Partner Roles and Partner Functions
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In SAP R/3 and SAP ECC, the partner master data is assigned partner roles, which describe the functions a partner performs from the perspective of the company. For example, a customer can have the partner roles sold-to party, ship-to party, bill-to party, and payer. In the area of export control in foreign trade, the partner role of end customer can also be involved. You must define all the partner roles in the feeder system that are relevant for SAP GTS as partner functions in SAP GTS. When creating a partner function, you have to specify whether this function is to be used for goods receipts, goods issues, or both. You then assign the partner functions to partner groupings, which are subsequently linked to individual services of SAP GTS. For example, if you intend to use the embargo check, you define a partner grouping for each direction of goods movement (receipt/issue) and assign to it the partner functions that are linked to the feeder system partner roles. In this way, the system recognizes whether it has to screen the country of the immediate ship-to-party only, or also the country of the ultimate consignee (for example, when creating a sales order in the feeder system).
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Exercise 2: Organizational Units and Master Data

Exercise Objectives
After completing this exercise, you will be able to: Transfer product and partner master data from an SAP feeder system to an SAP GTS system.
Business Example
The feeder system already contains customer, vendor, and product master data. Some of this master data is also required in SAP GTS to map and control cross-border movements of goods.
Task:
The feeder system contains a material master record for a flywheel that IDES Germany regularly imports from its subsidiary in the United States and then sells to customers in a number of different countries. Transfer this master record to the SAP GTS system. Before you do this, check for which organizational levels the material has been created and find their counterparts in the SAP GTS system. 1. In the feeder system, display material T-BW01-##. For which plant were the Purchasing and Sales: General/Plant Data views created before the start of the course? In Customizing in the feeder system, find out which company code this plant is assigned to. Hint: To go to Customizing, choose Tools ! Customizing ! IMG ! Execute Project. Then choose SAP Reference IMG. 3. Check to which foreign trade organization the company code 1000 is assigned in the Customizing of the SAP GTS system. Which legal unit is the equivalent of plant 1000? Hint: The notes on task 2 show the menu path for Customizing.
2.
Continued on next page
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4.
Transfer material T-BW01-## from the feeder system to the SAP GTS system. Hint: You will not find the cockpit for SAP GTS functions in the menu structure of the feeder system. To call up the cockpit, you enter transaction code /SAPSLL/MENU_LEGALR3 in the command field. To make it easier for you to use the cockpit in the future, you can add this transaction to your favorites (Favorites ! Insert transaction).
5.
In the SAP GTS system, check whether a product master record has been created for the material in the feeder system. Hint: You will not find the cockpit for SAP GTS functions in the menu structure of the SAP GTS system. To call up the cockpit, you enter transaction code /SAPSLL/MENU_LEGAL in the command field. To make it easier for you to use the cockpit in the future, you can add this transaction to your favorites (Favorites ! Insert transaction).
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Solution 2: Organizational Units and Master Data

Task:
The feeder system contains a material master record for a flywheel that IDES Germany regularly imports from its subsidiary in the United States and then sells to customers in a number of different countries. Transfer this master record to the SAP GTS system. Before you do this, check for which organizational levels the material has been created and find their counterparts in the SAP GTS system. 1. In the feeder system, display material T-BW01-##. For which plant were the Purchasing and Sales: General/Plant Data views created before the start of the course? a) Log on to the feeder system with your user, GTS100-##. The instructor will tell you the system key, clients, and password at the start of the course. Choose Logistics ! Materials Management ! Material Master ! Material ! Display ! Display Current. Enter material number T-BW01-## and choose Enter. You can also choose Select View(s). Select the Sales: General/Plant Data and Purchasing views. Choose Enter: The Organizational Levels screen window appears. You can use input help for the Plant field (F4 key) to find out for which plant the material has already been created. This plant is plant 1000. To display the two selected views, accept plant 1000 by selecting Choose. Then choose Enter. The first view, Sales: General/Plant Data, is shown. To go to the Purchasing view, choose Enter. Exit the material master by choosing Back .
b) c) d)
e)
f) 2.
In Customizing in the feeder system, find out which company code this plant is assigned to. Hint: To go to Customizing, choose Tools ! Customizing ! IMG ! Execute Project. Then choose SAP Reference IMG. a) b) Choose Enterprise Structure ! Assignment ! Logistics - General ! Assign plant to company code. The assignment overview shows that plant 1000 is assigned to company code 1000. Continued on next page
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3.
Check to which foreign trade organization the company code 1000 is assigned in the Customizing of the SAP GTS system. Which legal unit is the equivalent of plant 1000? Hint: The notes on task 2 show the menu path for Customizing. a) Log on to the SAP GTS system with your user, GTS100-##. The instructor will tell you the system key, clients, and password at the start of the course. Choose SAP Global Trade Services ! General Settings ! Organizational Structure ! Assignment of Organizational Units from Feeder System to Foreign Trade Org. ! Assign Company Code at Feeder System Level. Choose Manually Assign Company Code: You see two table entries for the logical system name of the feeder system BACKEND. In the first entry, you see the key of company code 1000 in the FS Org. field. The key for the assigned foreign trade organization is DEIDES. Now choose SAP Global Trade Services ! General Settings ! Organizational Structure ! Assignment of Organizational Units from Feeder System to Legal Unit ! Assign Plant at Feeder System Level. Choose Manually Assign Plant: You see two table entries for the logical system name of the feeder system BACKEND. In the first entry, you see the key of plant 1000 in the FS Org. field. The key for the assigned legal unit is HAMBURG.
b)
c)
d)
e)
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4.
Transfer material T-BW01-## from the feeder system to the SAP GTS system. Hint: You will not find the cockpit for SAP GTS functions in the menu structure of the feeder system. To call up the cockpit, you enter transaction code /SAPSLL/MENU_LEGALR3 in the command field. To make it easier for you to use the cockpit in the future, you can add this transaction to your favorites (Favorites ! Insert transaction). a) b) c) d) Call up the SAP GTS cockpit using the transaction code /SAPSLL/MENU_LEGALR3 (GTS: Global Trade Srv.: Area Menu). Choose the Master Data tab page. In the Initial Transfer of Master Data to SAP GTS area, choose Transfer Material Masters . Enter material number T-BW01-## and choose Execute . The system issues a message to let you know that your master record has been transferred successfully. Choose Enter.
5.
In the SAP GTS system, check whether a product master record has been created for the material in the feeder system. Hint: You will not find the cockpit for SAP GTS functions in the menu structure of the SAP GTS system. To call up the cockpit, you enter transaction code /SAPSLL/MENU_LEGAL in the command field. To make it easier for you to use the cockpit in the future, you can add this transaction to your favorites (Favorites ! Insert transaction). a) b) c) d) Call up the SAP GTS cockpit using the transaction code /SAPSLL/MENU_LEGAL (Area Menu: Global Trade Services). In the SAP Customs Management area, choose Master Data. In the Customs Products area, choose the symbol Display Products .
In the Logical System Group field, enter the system group GROUP_GTS, and in the Product Number field, enter your material number T-BW01-##. Then choose Execute . The system displays the following views: General Basic Data, Legal Control, Classification, Preference EU and Special Customs Procedure. To leave the product master, choose Back .
e)
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Exercise 3: Customs Document Types

Exercise Objectives
After completing this exercise, you will be able to: Link document types in the SAP feeder system to customs document types in the SAP GTS system to allow you to use SAP GTS functions in the import and export process.
Business Example
You want to perform a foreign trade law audit for certain goods receipt and goods issue processes in IDES US and IDES Germany. In customs processing, you want to continue processing data from the sales transaction in SAP GTS.
Task:
You want to make sure that in the future, all the orders entered using sales document type ZA## in your feeder system are transferred to the SAP GTS system for screening within SAP Compliance Management. Hint: You will find the corresponding table in the Customizing of the feeder system in Sales and Distribution ! Foreign Trade/Customs ! SAP Global Trade Services - Plug-In ! Control Data for Transfer to SAP Global Trade Services ! Configure Control Settings for Transfer. 1. 2. Assign sales document type ZA## to application level SD0A (Dispatch/Export: Sales document). Flag the document type as being relevant to SAP GTS (services of SAP Compliance Management and SAP Risk Management) and call up a screen window if the document is blocked. You also want SAP GTS to set a preference indicator in sales documents of document type ZA##, where applicable. In Customizing for SAP Compliance Management, there already is a customs document type to which you can assign sales document types. Make a note of the document key: ___________ In Customizing for SAP Compliance Management, assign the feeder system sales document type ZA## to this customs document type. Hint: SAP GTS uses the same application levels as those used in the feeder system (in this case, SD0A).
3.
4.
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Solution 3: Customs Document Types

Task:
You want to make sure that in the future, all the orders entered using sales document type ZA## in your feeder system are transferred to the SAP GTS system for screening within SAP Compliance Management. Hint: You will find the corresponding table in the Customizing of the feeder system in Sales and Distribution ! Foreign Trade/Customs ! SAP Global Trade Services - Plug-In ! Control Data for Transfer to SAP Global Trade Services ! Configure Control Settings for Transfer. 1. Assign sales document type ZA## to application level SD0A (Dispatch/Export: Sales document). a) In IMG in the feeder system, choose Sales and Distribution ! Foreign Trade/Customs ! SAP Global Trade Services - Plug-In ! Control Data for Transfer to SAP Global Trade Services ! Configure Control Settings for Transfer. Select the application level SD0A (Dispatch/Export: Sales document) and double-click Document Types in the dialog structure. Choose New Entries and enter document type ZA##.
b) c) 2.
Flag the document type as being relevant to SAP GTS (services of SAP Compliance Management and SAP Risk Management) and call up a screen window if the document is blocked. You also want SAP GTS to set a preference indicator in sales documents of document type ZA##, where applicable. a) Set the indicators for Call Up SAP Compliance Management Services, Call Up SAP Risk Management Services, Output Global Trade Services Dialog and Set Preference Indicator in Feeder System. To create the new entry, choose Save and exit the table level by choosing Back .
b) 3.
In Customizing for SAP Compliance Management, there already is a customs document type to which you can assign sales document types. Make a note of the document key: ___________ a) In the Customizing of the SAP GTS system, choose SAP Global Trade Services ! SAP Compliance Management ! General Settings ! Document Structure ! Define Document Types. The appropriate customs document type is the one with the key EXPORD (Customs Export Document: Sales Document Level). Continued on next page
b)
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4.
In Customizing for SAP Compliance Management, assign the feeder system sales document type ZA## to this customs document type. Hint: SAP GTS uses the same application levels as those used in the feeder system (in this case, SD0A). a) Choose SAP Global Trade Services ! SAP Compliance Management ! General Settings ! Document Structure ! Assignment of Document Types from Feeder Systems ! Assign Document Type at Feeder System Level. Choose Manually Assign Document Type and then New Entries. In the Application Level field, choose the key SD0A (Dispatch/Export: Sales document). Enter the logical system name BACKEND and the feeder system document type ZA##. Add an explanatory text for this document type. Then assign the customs document type EXPORD to this data. To create the new entry, choose Save, and exit the table.
b) c) d) e)
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Lesson Summary
You should now be able to: Explain the basic system requirements for using SAP GTS Describe how the SAP GTS system and the commercial feeder system communicate Transfer master data from an SAP feeder system to an SAP GTS system
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Lesson: Basic Regulatory Principles

Lesson Overview
All the subareas in foreign trade are governed by laws and regulations. In this lesson, you will learn how to map the legal foundations that are relevant to your processes in SAP GTS.
Lesson Objectives
After completing this lesson, you will be able to: Understand the background of control regulations with regard to foreign trade and politics Map these control regulations in SAP GTS and take them into account in import and export processes Explain the requirements of customs law in foreign trade procedures and implement these in SAP GTS
Business Example
IDES AG is checking which laws and regulations are relevant to its foreign trade processes.
Legislative Levels
In most countries, customs law and foreign trade law is molded in the basic form of international agreements. The member states of the European Community (EC) have ceded much of their legislative powers in the area of customs and foreign trade law to the appropriate institutions of the EC. Foreign trade in these countries is therefore dominated by supranational legislation, namely by EC-wide legislation. However, in many cases it is up to the member countries to decide how these community regulations are put into place at national level.
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Figure 13: Supranational Legislation: The EC
On July 1, 1967, an amalgamation treaty brought together the executive organs of the European Coal and Steel Community (ECSC), the European Atomic Energy Community (EURATOM), and the European Economic Community (EEC) to form a common commission and a common council. This step brought about the creation of the European Community (EC). A year later, a customs union was established within the EC. This meant that the member states' national customs duties were abolished and the Common Customs Tariff (CCT) of the EC applied from then on to third countries. However, it was only in 1988 that the Single Administrative Document replaced member states' own customs declaration forms. In the same year, the Combined Nomenclature (CN) (EEC Regulation No. 2658/87 on customs tariff and statistical nomenclature and the Common Customs Tariff) replaced the Common Customs Tariff. In the Maastricht Treaty (February 7, 1992), the member states agreed to set up the European Union (EU), with the goal of extending the scope of economic cooperation and political integration. The long-planned single market finally became a reality on January 1, 1993. From that date, monitoring by customs officials of the movement of goods within the EC became a thing of the past. Within the borders of the single market, import duties (customs duties, import turnover tax, and special excise duty) no longer applied. A number of countries have signed treaties to form free trade zones. On January 1, 1994, the United States, Canada, and Mexico formed the North American Free Trade Zone, which is based on the North American Free Trade Agreement (NAFTA). This agreement aims to improve trade relations by removing trade barriers and to promote closer commercial cooperation.
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Figure 14: Free Trade Zones Example: NAFTA
Since 1994, duties and other non-tariff trade barriers (for example, licensing requirements or comparable control measures) have been gradually removed from commercial transactions between the three participating countries. These countries have also opened most service sectors to companies within the other signatory countries. Unlike the situation in the EC, the countries in the NAFTA do not have a common customs union. The national laws and duty rates of each of the countries in the NAFTA apply to third countries.
Foreign Trade Law

The figure below shows a combination of the key agreements, laws, and regulations on which the national import and export control measures in the EC are based. Again, German legislation is used as an example of laws at national level. Similar procedural laws apply in the remaining member states. International level Embargos arising from Security Council resolutions Chemical Weapons Convention (CWC) Wassenaar Arrangement
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Supranational level EC embargo regulations EC import control regulations EC export control regulations, especially EC reg. No. 1334/2000 (Dual Use Regulation)
National level (example: Germany) German Foreign Trade Administration Act and German Foreign Trade Regulations with import and export list Implementation Act and Implementation Regulation for the Chemical Weapons Convention Law for the Control of Weapons of War and its regulations
Embargos are part of Security Council resolutions and do not immediately apply in EC member states. Only once corresponding embargo regulations are in place do they become law. Examples from the recent past are the total embargo on Iraq and the partial embargos on Zimbabwe and Sierra Leone. The Chemical Weapons Convention is an agreement that controls weapons and disarmament. Among other things, it forbids or restricts trade in weapons-grade chemical substances. The Wassenaar Arrangement lays down measures for controlling the export of conventional weapons and dual-use goods. National law is largely superseded by EC law in the areas of import and export control. Embargos play a large role. These are embargos that the community has implemented against individual states, specific political groups, or particularly with regard to combating terrorism natural or legal persons. The Wassenaar Arrangement was implemented in Community law in the Dual-Use Regulation. In Germany, foreign trade is mainly regulated by the German Foreign Trade Administration Act and the German Foreign Trade Regulations. EC law has on several occasions been integrated into national law. This is the reason why the export list, an annex to the German Foreign Trade Administration Act, also includes the goods and goods categories that are contained in the Dual-Use Regulation. Depending on the industry, clauses from the Implementation Act for the Chemical Weapons Convention and its Implementation Regulation, or the Law for the Control of Weapons of War and its regulations, can influence foreign trade. Similar legal regulations apply in the remaining member states.
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International level Embargos arising from Security Council resolutions Chemical Weapons Convention (CWC) Wassenaar Arrangement
National level Export Administration Regulations (EAR) with Commerce Control List (CCL) International Traffic in Arms Regulation with U.S. Munitions List
The USA has also applied Security Council embargo resolutions in its national law. As a signatory of the Chemical Weapons Convention and the Wassenaar Arrangement, the United States restricts foreign trade involving weapons-grade chemical substances and the export of conventional weapons and dual-use goods. At national level, the United States has enacted embargos against particular countries, independent of Security Council resolutions. As with the embargos, the provisions of the agreements have been incorporated in the Export Administration Regulations and in the International Traffic in Arms Regulation. As in the EC, the lists of goods in the agreements have been integrated in appropriate national lists in the USA (Commerce Control List and U.S. Munitions List). Note: The laws and regulations designed to combat terrorism which are important in SAP GTS because they are part of annexes to boycott lists are not discussed here, as they explicitly make any type of business relationship with suspects a punishable offence, even in domestic trade. For more information on these legal foundations, see Sanctioned Party List Screening.
Customs Law
As in the figure for foreign trade law, the figure below shows a combination of the key agreements, laws, and regulations for the customs treatment of goods in the EC. Again, German legislation is used as an example of laws at national level.
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International level General Agreement on Tariffs and Trade (GATT) Convention on the Harmonized System (HS) Convention on a common transit procedure Preference agreements with third countries
Supranational level Community Customs Code and its implementing regulation
National Level (Example: Germany) Customs Administration Law Customs Regulation
In 1947, the multilateral General Agreement on Tariffs and Trade (GATT) was signed. In 1995, the GATT was institutionalized in the form of the World Trade Organization (WTO). The goal of the WTO is to liberalize world trade. The Harmonized System (HS) nomenclature is based on the International Convention on the Harmonized Commodity Description and Coding System (1983). This list is administered by the World Customs Organization (WCO) and all the goods are encoded as six-digit codes. Among other things, it is used as a basis for the nomenclatures for customs tariffs and statistical reports in the signatory countries. The transit procedure is one of the EC's simplified customs procedures, and amongst other things, it is used in dealings with EFTA countries that have an appropriate agreement (see also Transit Procedure). Preference agreements between the Community and other states have made a considerable contribution to the removal or partial removal of duties. Furthermore, within the Generalized System of Preferences (GSP), the Community does not impose customs duties on imports from a group of Southern countries. Note: On May 1, 2004 another ten countries joined the EC, rendering the preference agreements signed with these countries unnecessary. As is the case for imports and exports, Community law usually overrides national law in the area of customs. The material customs law of the European Community was set down in the Customs Code (EC regulation no. 2913/92), and the formal customs law in the Implementation Regulation of the Customs Code (EC regulation no. 2454/93).
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In procedural law in particular, which is not regulated - or only partially regulated - by Community law, the German Customs Administration Law and the Customs Regulation come into effect. There are similar legal regulations in the remaining member states. International level General Agreement on Tariffs and Trade (GATT) Convention on the Harmonized System (HS) North American Free Trade Agreement (NAFTA)
National level Omnibus Trade and Competitiveness Act of 1988 Tariff Act of 1930
The United States is also a member of the WTO and the World Customs Organization and has signed both the GATT and the Convention on the Harmonized System. NAFTA largely exempts companies from paying customs duties when trading with Canada and Mexico and removes other restraints. At national level, the HS has been converted into the Harmonized Tariff Schedule of the United States. The legal foundation is the Omnibus Trade and Competitiveness Act of 1988 and the national customs law is regulated in the Tariff Act of 1930. The national customs and foreign trade laws of many countries are largely determined by international conventions and these are therefore at least partly identical.
Legal Regulations in SAP GTS

In the system, you have to create all the laws and regulations that you must comply with for foreign trade law audits in SAP Compliance Management or for customs processing in SAP Customs Management or SAP Risk Management. You create these laws and regulations as legal regulations and activate them for the country or group of countries in which they apply.
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Figure 15: Legal Regulations
You can assign user-defined country groups to the legal regulations. This is advisable if the same regulation applies to a number of different countries, as in the EC, or if country lists are kept in connection with the issuing of licenses (as in the Export Administration Regulations, for example). When searching for a suitable license for an import or export procedure, the system can use this country group as a basis. You flag each legal regulation with a two-character, numerical code that specifies its purpose. The assignment of a legal regulation to a legal code determines how the legal regulation is used in SAP GTS: 03 (Foreign Trade Law): SAP Compliance Management services 01 (Customs Processing): 'Customs Processing' service 03 (Prohibitions and Restrictions): SAP Compliance Management services 06 (Preference Law): 'Preference Processing' service 07 (Transit Procedure): 'Transit Procedure' service 08 (Restitution): 'Restitution' service 09 (Letter of Credit Processing): Letter of Credit Processing service
In SAP GTS, you define separate legal regulations for each of the services. If you want to use the legal control service (product-related controls) for both imports and exports, you have to create a separate legal regulation for goods movements
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in both directions. At product master and license level, you can therefore assign separate nomenclatures for the classification of products that are subject to control measures. Note: For the SAP Compliance Management services, you can use legal codes 00 and 03. Legal code 00 is assigned to each of the legal foundations supplied by SAP. It is intended for foreign trade law regulations. You can use legal code 03 to map trade restrictions in the system that are not based on foreign trade law. Examples of this are regulations that forbid or restrict the import or export of anesthetics and medicines, certain animals and plants, or cultural assets.
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Exercise 4: Legal Regulations

Exercise Objectives
After completing this exercise, you will be able to: Map as legal regulations in the SAP GTS system, the laws and regulations that have to be complied with in foreign trade.
Business Example
Your IDES subsidiaries import and export goods on a daily basis. The main customs and foreign trade law regulations must be entered as legal regulations in the SAP GTS system.
Task:
In the SAP GTS system, create a new legal regulation for foreign trade law audits within SAP Compliance Management, and activate this regulation for use in the country of your choice. Hint: You will not require this legal regulation during the rest of the course. The purpose of this exercise is just to learn how to create and activate a legal regulation, as the procedure is identical for every service and every country. It therefore does not matter which national law you map in the system. 1. In the Customizing of the SAP GTS system, create a legal regulation for the services of the SAP Compliance Management with the key GTS## and a description of your choice. You can use the existing table entry for the Export Administration Regulations of the USA (EAR) as a reference. Hint: If, at first, you do not see the key for the legal code in the table of legal regulations, this means the expert mode is not activated. From the application menu toolbar, choose Adjust Local Layout , then Options.... Choose the Experts tab page and set the Display Key in All Dropdown Lists and Sort Items by Key indicators. Finally, choose Apply and OK. 2. 3. Specify that the legal regulation GTS## is to be used for checking goods issues. For the check functions of SAP Compliance Management, it is important that you assign appropriate deadline types to the legal regulation. In the example in this exercise, you have to limit the validity of export licenses. Continued on next page
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The deadline types VALFRO (Valid-From Date) and VALTO (Valid-To Date) are provided for this purpose. Assign these two deadline types to your legal regulation, GTS##. Hint: The tables dialog structure contains the Assign Deadline Types entry. 4. Activate the legal regulation for general use. Assign the appropriate country code, as the regulation will be used for exports from the country of your choice.
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Solution 4: Legal Regulations

Task:
In the SAP GTS system, create a new legal regulation for foreign trade law audits within SAP Compliance Management, and activate this regulation for use in the country of your choice. Hint: You will not require this legal regulation during the rest of the course. The purpose of this exercise is just to learn how to create and activate a legal regulation, as the procedure is identical for every service and every country. It therefore does not matter which national law you map in the system. 1. In the Customizing of the SAP GTS system, create a legal regulation for the services of the SAP Compliance Management with the key GTS## and a description of your choice. You can use the existing table entry for the Export Administration Regulations of the USA (EAR) as a reference. Hint: If, at first, you do not see the key for the legal code in the table of legal regulations, this means the expert mode is not activated. From the application menu toolbar, choose Adjust Local Layout , then Options.... Choose the Experts tab page and set the Display Key in All Dropdown Lists and Sort Items by Key indicators. Finally, choose Apply and OK. a) b) c) 2. Choose SAP Global Trade Services ! General Settings ! Legal Regulations ! Define Legal Regulation. Choose New Entries. Enter the key for the new legal regulation, GTS##, and add the description of your choice. Assign the new legal regulation to legal code 00 (Foreign Trade Law).
Specify that the legal regulation GTS## is to be used for checking goods issues. a) b) In the Import/Export field, choose the key 2 (Export/Dispatch). Choose Enter and save the legal regulation.
3.
For the check functions of SAP Compliance Management, it is important that you assign appropriate deadline types to the legal regulation. In the example in this exercise, you have to limit the validity of export licenses.
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The deadline types VALFRO (Valid-From Date) and VALTO (Valid-To Date) are provided for this purpose. Assign these two deadline types to your legal regulation, GTS##. Hint: The tables dialog structure contains the Assign Deadline Types entry. a) b) c) 4. Select the table entry you created in the last step, and double-click Assign Deadline Types in the dialog structure. Then, choose New Entries. In the Type of Date field, enter the keys VALFRO and VALTO one after the other. Save your changes.
Activate the legal regulation for general use. Assign the appropriate country code, as the regulation will be used for exports from the country of your choice. a) Choose SAP Global Trade Services ! General Settings ! Legal Regulations ! Activate Legal Regulations at Country/Country Group Level. Select the table entry for your legal regulation GTS## and double-click on the Country folder in the dialog structure. Choose New Entries. Enter a country code of your choice and save this entry.
b) c) d)
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Lesson Summary
You should now be able to: Understand the background of control regulations with regard to foreign trade and politics Map these control regulations in SAP GTS and take them into account in import and export processes Explain the requirements of customs law in foreign trade procedures and implement these in SAP GTS
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Unit Summary
You should now be able to: Describe the SAP GTS product structure Explain how the services within SAP GTS are used in goods movements across borders Explain the basic system requirements for using SAP GTS Describe how the SAP GTS system and the commercial feeder system communicate Transfer master data from an SAP feeder system to an SAP GTS system Understand the background of control regulations with regard to foreign trade and politics Map these control regulations in SAP GTS and take them into account in import and export processes Explain the requirements of customs law in foreign trade procedures and implement these in SAP GTS
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Test Your Knowledge
Test Your Knowledge

1. Which services does SAP Compliance Management include?
2.
Which SAP GTS subsolution enables you to perform preference determination?

Choose the correct answer(s).
! ! ! ! 3.
A B C D
SAP Compliance Management SAP Risk Management SAP Customs Management None
Which organizational unit in an SAP feeder system is the equivalent of the legal unit in SAP GTS?
! ! ! ! 4.
A B C D
The company code The plant The storage location The sales organization
Which master data can you transfer from an SAP R/3 or SAP ECC system to an SAP GTS system?
! ! ! ! ! 5.
A B C D E
Material masters Bills of material Customer masters Storage bins Vendor masters
What is the function of the Convention on the Harmonized System in foreign trade?
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Answers
1. Which services does SAP Compliance Management include? Answer: SAP Compliance Management includes the embargo check, license determination, and sanctioned party list screening services. 2. Which SAP GTS subsolution enables you to perform preference determination? Answer: B Preference determination is part of the preference processing service in SAP Risk Management. 3. Which organizational unit in an SAP feeder system is the equivalent of the legal unit in SAP GTS? Answer: B The legal unit in SAP GTS is the equivalent of the plant in an SAP feeder system or SAP feeder system group. 4. Which master data can you transfer from an SAP R/3 or SAP ECC system to an SAP GTS system? Answer: A, B, C, E You can transfer materials, customers, vendor masters, and bills of material to SAP GTS. 5. What is the function of the Convention on the Harmonized System in foreign trade? Answer: The nomenclature for the Harmonized System forms the basis of the customs tariffs of all the countries that have signed the convention.
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Unit 2
Export Processes
Unit Overview
This unit explains the purpose of SAP Compliance Management, SAP Customs Management, and SAP Risk Management in export processes.
Unit Objectives
After completing this unit, you will be able to: Create goods list numbers Assign goods list numbers to your product masters Manage export licenses in SAP GTS Describe various forms of export declaration Create an export declaration in SAP GTS Describe the steps involved in and the advantages of the transit procedure Explain the ways in which the transit procedure can simplify customs processing Describe the various steps in the NCTS Create an authorization for participation in the transit procedure as an authorized consignor Explain the purpose of the letter of credit Explain letter of credit processing in SAP GTS Explain the economic and legal background of restitution Describe the features of the 'Restitution' service
Unit Contents
Lesson: Lists of Goods.......................................................... 53 Exercise 5: Classifying a Product Master ................................ 59 Lesson: Export Licenses........................................................ 62 Exercise 6: Assigning a License to a Customs Document............. 69 Lesson: Export Declarations ................................................... 76 Exercise 7: Export Declarations in the AES ............................. 83 Lesson: Transit Procedure at Export .......................................... 87
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Exercise 8: Creating Authorizations ...................................... 95 Lesson: Letter of Credit ......................................................... 98 Lesson: Restitution .............................................................103
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Lesson: Lists of Goods

Lesson Overview
In many countries, a license is required to export certain goods. The legal control service in SAP Compliance Management provides product-based check functions to ensure that the system prevents these types of goods from being exported if they do not have a valid export license. This lesson deals with the preparations for license management in the system, namely, the classification of product masters according to the respective national lists of goods.
Lesson Objectives
After completing this lesson, you will be able to: Create goods list numbers Assign goods list numbers to your product masters
Business Example
Your company, IDES US, intends to export new ball bearings to various countries. However, ball bearings of this type are categorized as dual-use goods in the Export Administration Regulations and are therefore placed on the Commerce Control List. As a result, your exports from the United States require a license.
SAP Compliance Management in the Export Process

As early as the order creation stage of the sales process in the feeder system, you can use SAP Compliance Management to check whether the planned export is permitted and, if necessary, stop the order from being processed further. To do this, the system can check first whether the country of destination is affected by an embargo. You can additionally (or alternatively) check whether the business partner's name is on any boycott lists in other words, whether a personal embargo has been imposed on the business partner. If there are no problems with the business partner, the system may then perform a product check that is, it checks whether the export is allowed, but requires a license from the authorities. You can use SAP Compliance Management to apply for any required licenses in good time and store them in the system.
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Figure 16: SAP Compliance Management in the Export Process
The three services in SAP Compliance Management embargo check, sanctioned party list screening, and product-related check (legal control) can all be activated separately. You therefore do not have to use all three check functions every time you export goods. For example, if you are not exporting any goods with licensing requirements, the product-related check for goods issues remains deactivated. The legal control service applies to products that, for various reasons, cannot be imported or exported without prior authorization from the authorities. As in our scenario, exports that are subject to licensing requirements are often those of armaments and/or goods that can be used for both civil and military purposes (dual-use goods).
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Figure 17: Product-Related Export Controls: Goods Categories
Since many industrial enterprises manufacture and export dual-use goods, this lesson deals with this category of goods. However, the system settings shown here also apply to armaments. Note: Even exports of agricultural products and of some processed products are usually subject to licensing requirements. The management of CAP licenses for these types of products is dealt with in the lesson on Restitution. It is controlled in the same way as the export license management in the legal control service.
Dual-Use Goods
The term 'dual-use goods' mainly applies to goods with a primarily civil function, but which can also be used for military purposes. The EC Council instituted regulation No. 1334/2000 as a common export control system for these types of goods. The main goal was to ensure that EC member states adhered to international arms non-proliferation treaties (Wassenaar Arrangement, Chemical Weapons Convention). This has heavily restricted the export of armaments and dual-use goods. The United States establishes similar measures in the Export Administration Regulations (EAR) on the basis of the same conventions.
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Figure 18: Dual-Use Goods
Annex I of the Dual-Use Regulation is the EC's common list of dual-use goods. As a rule, exports of the goods in this list are subject to licensing requirements. The national customs offices are responsible for approving applications for export licenses. In Germany, the Federal Office of Economics and Export Control (Bundesamt fr Wirtschaft und Ausfuhrkontrolle, or BAFA) is responsible for this. The list of goods under the Dual Use Regulation has been incorporated into the respective national legislations of the member states. In Germany, it has been incorporated into the export list, which is contained in an annex to the German Foreign Trade Administration Act. In the United States, the Commerce Control List performs a comparable function. Export licenses are issued upon application to the Bureau of Industry and Security of the U.S. Department of Commerce. This authority also provides binding information about classifying specific goods.
Lists of Goods
If you want to use the legal control service for exports, the product masters of all the goods affected by each control measure have to be classified according to the appropriate list of goods. Goods have to be classified so you can perform a product-master-related transaction check and manage export licenses in the SAP GTS system. The figure below is an example of an excerpt from the German export list.
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Figure 19: Export Control Classification Numbers
The export list is split into three sections. Section A consists of a list for weapons, munitions, and armaments. Section B lists other goods (electric-shock batons, electric-shock devices, components specifically designed for these devices, and thumbscrews and shackles). Section C contains a list of dual-use goods. Subgroups are designated by alphanumerical character combinations. Thus, codes 3A to 3E stand for general electronics, and 4A to 4E for calculators. The first digit indicates the category, and the second digit indicates the class, of the listed goods. This coding is specified in the Wassenaar Arrangement. Therefore, the first two digits of the goods list numbers are identical in all the countries that have signed the Wassenaar Arrangement. The goods themselves are indicated by five-digit codes and described in more detail in the national lists, so there are national variations in the last three digits. Both the EC's common list of dual-use goods and the Commerce Control List identify 10 categories of goods. You have to create the code numbers of the relevant list(s) of goods in the SAP GTS system before they can be assigned at product master level. You can enter code numbers manually in transaction /SAPSLL/LLNS_002 (Maintain Export Control Classification Numbers). In the USA and Germany, data providers sell full lists of goods in XML format, which you can upload to an SAP GTS system (see the Nomenclatures and Classification lesson). If you have already created goods list numbers in the SAP R/3 or SAP ECC feeder system, you can transfer them from the feeder system to the SAP GTS system using the /SAPSLL/ALNUM_UPLOAD_R3 program. You can also export the assignment of goods list numbers to material masters (program /SAPSLL/MAEX_UPLOAD_R3) if the material masters already exist in the form of product masters in SAP GTS and the goods list numbers have also been transferred or newly defined in SAP GTS. For a precise description of the procedure for transferring data from the feeder system, see OSS Note 806625.
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Exercise 5: Classifying a Product Master

Exercise Objectives
After completing this exercise, you will be able to: Assign a goods list number to a product master
Business Example
In preparation for exporting the ball bearing T-BW03-## from the United States, you have to classify this product in accordance with the Commerce Control List.
Task:
Classify product master record T-BW03-## in accordance with the Commerce Control List. The correct Export Control Classification Number (ECCN) is 2A001. In addition, flag the product master as relevant to export license management. 1. First, check whether the system proposes legal regulation Export Administration Regulations (EAR) and the numbering scheme for the Commerce Control List (USECC) in the Legal Control view of the product master for the ball bearing T-BW03-##. Assign list number 2A001, and set the Individual Maintenance indicator.
2.
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Solution 5: Classifying a Product Master

Task:
Classify product master record T-BW03-## in accordance with the Commerce Control List. The correct Export Control Classification Number (ECCN) is 2A001. In addition, flag the product master as relevant to export license management. 1. First, check whether the system proposes legal regulation Export Administration Regulations (EAR) and the numbering scheme for the Commerce Control List (USECC) in the Legal Control view of the product master for the ball bearing T-BW03-##. a) b) c) d) In the SAP Compliance Management area of the SAP GTS cockpit, choose Classification/Master Data. In the Export View for Customs Products area, choose the symbol Change Products . Enter material number T-BW03-## and the group of logical systems GROUP_GTS and choose Execute . Choose the Legal Control view: The overview of legal regulations and numbering schemes should contain the legal regulation Export Administration Regulations and the numbering scheme Commerce Control List. Select the numbering scheme for the Commerce Control List: The Export Control Classification Number field is now ready for input. Enter 2A001, and choose Enter. In the Additional Data area, set the Individual Maintenance indicator. To complete the procedure, save your entries.
2.
Assign list number 2A001, and set the Individual Maintenance indicator. a) b) c)
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Lesson Summary
You should now be able to: Create goods list numbers Assign goods list numbers to your product masters
Related Information
Web site for the Wassenaar Arrangement: http://www.wassenaar.org/
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Lesson: Export Licenses

Lesson Overview
This lesson enables you to manage export licenses in SAP GTS.
Lesson Objectives
After completing this lesson, you will be able to: Manage export licenses in SAP GTS
Business Example
Your company, IDES US, has found that the ball bearings it intends to export to various countries come under the Export Administration Regulations. The correct Export Control Classification Number has already been assigned to the product masters affected. You now want to apply for an export license for a shipment to India with the relevant authorities.
Export Licenses
The foreign trade and payments legislation in many countries generally allows the free movement of goods with third countries. However, restrictions on free trade can be imposed for political reasons. Section 7 of the German Foreign Trade Administration Act, for example, allows restrictions to Ensure the security of the Federal Republic of Germany, Prevent the peaceful coexistence of peoples from being disturbed, Prevent the foreign relations of the Federal Republic of Germany from being seriously damaged.
In the United States, export control measures are established in a similar way. The Commerce Control List states specific control reasons for this purpose (for example, anti-terrorism, national security, non-proliferation of arms, weapons, and nuclear technology). The Commerce Control List therefore addresses in particular weapons and arms technology, but also dual-use goods covered in the Lists of Goods lesson. The export of goods with dual use is noticeably restricted in countries that have signed the Wassenaar Arrangement and usually requires a license. The national customs offices are responsible for approving applications for export licenses (see the List of Goods lesson). Every country has different types of export licenses. The figure below exemplifies the types of licenses that are provided in Germany, though a distinction between single authorizations and general authorizations is common in many countries.
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Figure 20: Example of Types of Export License (Germany)
The single export license is the standard export license type. It applies to only one goods delivery to a recipient. The highest amount license is a special type of single export license. It permits delivery of multiple orders to a recipient, up to a specified amount. The BAFA may also assign collective export licenses to reliable exporters. This license allows the exporter to export listed goods to more than one consignee. General licenses are not given to individual applicants. After they are published in the Federal Gazette, they are valid for certain goods classes and country groups. Exporters who want to use this type of license have to register with the BAFA. Depending on the type of license, the exporter may have to report regularly to the authorities. Besides the national license types, the Community General Export License (CGEL) no. EU001 also applies to the export of dual-use goods to certain countries. In the United States, as in the EC, only exports of certain products or exports to specific countries require a license. Exports that do not require a license are indicated as such on the export declaration (no license required/NLR). If an export requires a license in principal, the exporter has to check whether a license is really needed for the shipment or whether a license exception applies. The exceptions are specified in detail in the EAR and linked to the listed goods in the CCL. For example, you do not have to apply for an export license if the shipment does not exceed a specific value (shipments of limited value/LVS). Exceptions are granted for various reasons, including for export shipments to civil end-users (CIV).
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Depending on the country of destination and the product, the authorities can grant either a General License or Individual Validated License for exports that require a license.
Figure 21: Types of Export License (U.S.)
A general license in the United States is largely the equivalent of the general license in the EC, meaning that it is granted for all exports of specific products. These general licenses are published in the EAR and exporters do not have to submit an application for them. If a suitable general license does not exist, individual exporters can apply for an individual validated license, which is granted for specific products. This is valid either (as with the German individual license) for one shipment only or for multiple shipments within a specified time period, and is usually issued by the Bureau of Industry and Security (BIS) within the U.S. Department of Commerce.
Licenses
All types of licenses (not just the export licenses discussed here) are managed in SAP GTS as licenses. Licenses are master data in SAP GTS that map licenses and authorizations from authorities and, sometimes, securities, such as guarantees.
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Figure 22: License Management: Licenses
Using this master data, SAP Compliance Management can check if a valid license has been provided whenever movements of goods with licensing requirements are being performed. If a license has been provided, the system can automatically assign it to a procedure. However, you can also assign a license manually. In Customizing for SAP GTS, you specify which types of license users can create in SAP Compliance Management. You also define which fields are to be filled for each master record and which status (for example, Requested, Granted, or Extended) can be assigned to a license.
Figure 23: Licenses and License Types
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To be able to create licenses, you first have to define license types in Customizing for SAP GTS. License types are basic templates for possible licenses. Therefore, if you wish to use a general license in SAP Compliance Management, you first have to define the license type as a General License. For the general license itself, you then create a license for the license type general license, in which you enter the details of this export license. On the license type level, you configure the detailed settings for the licenses that will later be managed as licenses in the system. This how you specify the objects that are to be checked by the system (such as product, customer, recipient country) and the maintainable fields in the master record. You can also make entries for value updates or quantity updates. You then assign the allowed status to the license records. The basic forms of this status (for example, Requested or Issued) are predefined in the system. You define which intermediary steps of the licensing process the user can record in the license type assignment. The license status determines whether the license can be used in real-life procedures. The system cannot assign any more customs documents to a license that has expired, for example. Note: In SAP GTS, in contrast to the foreign trade in SAP R/3 and SAP ECC, you can also perform a quantity depreciation on the license level. Every country works with its own license types on the basis of different regulations. You therefore always have to assign your license types to at least one legal regulation. Since the license type is linked to a number of configuration parameters, you can map legal requirements in different ways at this level, and record any differences between different legal systems. For example, you could define a General License type for the legal regulation Export Administration Regulations and a different type for the legal regulation German Foreign Trade Administration Act and configure each differently. Note: In the Customizing of client 000 in your SAP system you will find defaults for license types which you can use directly or as copy templates.
Check Process
The SAP GTS system replicates the sales documents or outbound deliveries transferred from the feeder system in the form of customs documents and uses these documents to check whether the procedures are permissible under export law.
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Figure 24: Product-Related Checks in the Export Process
If the legal control service is activated, the SAP GTS system checks whether the procedure requires a license. If it does, the system searches for an existing export license in the form of a license and assigns it to the procedure. If the system cannot find an appropriate license, it blocks the customs document. If SAP Note number 579357 has been implemented in the feeder system, it will no longer be possible to deliver the order or execute other follow-on functions. A customs document that has been blocked by the SAP Compliance Management check functions can be unblocked if a corresponding license record is assigned to it in the SAP GTS system. This assignment can be performed manually at any time. The system can subsequently also automatically link export licenses to existing and newly transferred documents. The determination of a suitable export license is based on a condition technique specific to SAP GTS. It depends on the legal regulation, which is in turn determined by means of the country of the legal unit from which the goods are to be exported. Another determination criterion is the goods list number of the product to be exported. However, when creating determination records, you can refer to what are known as control groupings. These freely definable groups group together any number of goods list numbers (control classes) for license determination purposes. To create determination records, use transaction /SAPSLL/CD_MAINTAIN. You create licenses for existing export licenses, or those that have been applied for, using transaction /SAPSLL/LCLIC01 (Create License). You can find both transactions in the SAP GTS cockpit, in the area SAP Customs Management, (Legal Control - Export button).
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Exercise 6: Assigning a License to a Customs Document

Exercise Objectives
After completing this exercise, you will be able to: Assign export licenses
Business Example
Your company, IDES US, exports ball bearings to India and Germany. When entering the appropriate orders in the feeder system, you want to check that the planned exports are allowed under foreign trade law.
Task:
IDES US sells your ball bearing T-BW03-## to customer 98765 in India and to IDES Germany (customer number 10000). SAP Compliance Management checks that the two transactions are allowed under foreign trade law. 1. In the feeder system, create an order with sales document type TA for the customer in India, 98765. Create the order for 10 pieces of material T-BW03-##. Enter the document for sales organization 3000, distribution channel 12, and division 00. What message does the system issue when it is saving the document? Make a note of the document number: __________________________ Create an order for IDES Germany (customer number 10000), also for 10 pieces of the ball bearing T-BW03-## for sales organization 3000, distribution channel 12, and division 00. Use order type TA again. How does the system react when you save? Make a note of the document number: _________________. Try to deliver the order for the Indian customer from step 1. How does the system respond? Check the blocked document in the SAP GTS system. Display the check log. Why exactly was the order blocked? You have now received the license to export the ball bearing to India. In the SAP GTS system, call up a license for an export license created for you before the course began and change the status from Requested to Issued. Hint: Find the corresponding export license using the external identification number GTS100-##. Continued on next page
2. 3.
4. 5. 6.
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7. 8.
Now, assign the license to the order from step 2. In the feeder system, try again to deliver the order for the Indian customer 98765 from step 2. Deliver the order to IDES Germany and make a note of the document numbers for the two outbound deliveries. Post the goods issue for the two outbound deliveries. Outbound delivery to customer 98765: ____________ Outbound delivery to customer 10000: ____________ Hint: The system may issue an error message to inform you that No schedules lines are due for delivery by the chosen date. If the system issues this message, move the selected date forward one week.
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Solution 6: Assigning a License to a Customs Document

Task:
IDES US sells your ball bearing T-BW03-## to customer 98765 in India and to IDES Germany (customer number 10000). SAP Compliance Management checks that the two transactions are allowed under foreign trade law. 1. In the feeder system, create an order with sales document type TA for the customer in India, 98765. Create the order for 10 pieces of material T-BW03-##. Enter the document for sales organization 3000, distribution channel 12, and division 00. a) b) c) d) 2. In the application menu, choose Logistics ! Sales and Distribution ! Sales ! Order ! Create. Enter order type TA, sales organization 3000, distribution channel 12, and division 00. Choose Enter. Enter customer 98765 as the sold-to party, and add purchase order number ##. Choose Enter. Then, enter material T-BW03-## and an order quantity of 10. Choose Enter.
What message does the system issue when it is saving the document? Make a note of the document number: __________________________ a) b) Create the order by saving. When saving the order, the system shows the results of the checks from the three SAP Compliance Management services. The system blocks the document for product-related export control reasons (legal control service). Choose Enter and make a note of the document number.
3.
Create an order for IDES Germany (customer number 10000), also for 10 pieces of the ball bearing T-BW03-## for sales organization 3000, distribution channel 12, and division 00. Use order type TA again. How does the system react when you save? Make a note of the document number: _________________. a) b) c) In the application menu, choose Logistics ! Sales and Distribution ! Sales ! Order ! Create. Create the order as described in step 1. Unlike with the first order, the system does not issue a message about SAP Compliance Management checks. The SAP GTS system therefore did not identify any reason under foreign trade law to prevent the export from taking place. Continued on next page
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4.
Try to deliver the order for the Indian customer from step 1. How does the system respond? a) b) c) d) Choose Logistics ! Sales and Distribution ! Sales ! Order ! Change. Enter the order number from step 2, and choose Enter. In the Order menu, choose Sales Document ! Deliver. The system issues a log informing you that the blocked document item will not be transferred to the outbound delivery. You cannot create the outbound delivery because the order contains only one item.
5.
Check the blocked document in the SAP GTS system. Display the check log. Why exactly was the order blocked? a) b) c) d) e) In the SAP Compliance Management area of the SAP GTS cockpit, choose Legal Control - Export. In the Monitoring area, choose Display Blocked Documents .
In the Reference Number field of the Document Data in Feeder System screen area, enter the order number from step 2 and choose Execute . The system indicates that your document is blocked. Select the document and choose Display Log . Display the check details for the document item. The check on legal regulation EAR found that you require an Individual Validated License of license type IVL to export material T-BW03-## to India, and that this is currently not available.
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6.
You have now received the license to export the ball bearing to India. In the SAP GTS system, call up a license for an export license created for you before the course began and change the status from Requested to Issued. Hint: Find the corresponding export license using the external identification number GTS100-##. a) b) c) In the SAP Compliance Management area of the SAP GTS cockpit, choose Legal Control - Export. In the Export Licenses area, choose the symbol Change Export License . Choose legal regulation EAR and license type IVL. Using input help for the License field, choose your license. Choose Enter. Hint: Select the license using the external identification number GTS100-## (External License Number field). d) Set the status to Issued, and save your changes. Choose Legal Control - Export again. In the Monitoring area, choose Display Blocked Documents .
7.
Now, assign the license to the order from step 2. a) b) c) d) e)
In the Reference Number field, enter the sales order document number from step 2 and choose Execute . Select the document and choose Change License Data .
On the next screen, select legal regulation EAR, and then in the Usable Licenses area, choose the entry for license type IVL: Under this entry, the system proposes the license changed in step 6. Select the number of the license and choose Adopt License for Item. In the next screen window, choose Copy Assignment assignment. The order has now been unblocked. . Save this
f)
8.
In the feeder system, try again to deliver the order for the Indian customer 98765 from step 2. Deliver the order to IDES Germany and make a note of the document numbers for the two outbound deliveries. Post the goods issue for the two outbound deliveries. Outbound delivery to customer 98765: ____________
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Outbound delivery to customer 10000: ____________ Hint: The system may issue an error message to inform you that No schedules lines are due for delivery by the chosen date. If the system issues this message, move the selected date forward one week. a) b) c) d) e) Choose Logistics ! Sales and Distribution ! Sales ! Order ! Change. Enter the order number from step 2, and choose Enter. In the Order menu, choose Sales Document ! Deliver and create the outbound delivery by saving. Proceed in the same way for the order from IDES Germany in step 3. Now choose Logistics ! Sales and Distribution ! Shipping and Transportation ! Post Goods Issue ! Collective Processing Via Outbound Delivery Monitor. In the menu, choose Edit ! All Selections, and in the Created by field, enter your user GTS100-##, remove the system defaults from the Pland Gds Mvmnt Date fields, and choose Execute : The two outbound deliveries are displayed in a list. Select the two documents and choose Post Goods Issue. Confirm the query on the Actual Goods Movement Date with Enter.
f)
g)
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Lesson Summary
You should now be able to: Manage export licenses in SAP GTS
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Lesson: Export Declarations

Lesson Overview
The export of goods is subject to customs supervision. In this lesson, we will discuss various forms of export declaration in SAP GTS.
Lesson Objectives
After completing this lesson, you will be able to: Describe various forms of export declaration Create an export declaration in SAP GTS
Business Example
In the future, IDES US intends to use the Automated Export System (AES), an electronic procedure for export declarations.
Export Procedures
In most countries, goods exports are duty-free and tax-free. However, like imports, they are subject to control by customs and foreign trade law. The figure illustrates export procedures in the EC.
Figure 25: Export Procedure (EC)
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An export is defined as the transportation of Community goods from the Community customs territory to a third country. The export procedure is one of the customs procedures listed in the Community Customs Code (art. 161f, art. 788ff). This procedure consists of two steps: The procedure is opened when the goods are presented at the office of export, the export declaration is handed over, the message is checked for completeness, and the export is checked to make sure that it is permitted (in particular, under foreign trade law). The procedure is closed when the goods are presented at the office of exit, further checks are carried out, the export is declared permissible, and the physical exit of the good is confirmed. The good loses its status as a Community good when it is exported.
The office of export is the responsible customs office; that is, the customs office in whose jurisdiction the exporter resides or in which the goods are loaded or packed. The office of exit is the customs office on the border of the third country.
Export Declaration
The export declaration which is required to perform the export procedure in the EC is submitted on copies 1 through 3 of the Single Administrative Document, or (in some member countries) it is submitted electronically. The customs office keeps copy 1; copy 2 is sent to the relevant statistical authority for the purposes of foreign trade statistics. On copy 3, which the exporter keeps, the office of exit confirms the physical exit of the goods.
Figure 26: Export Declaration (EC)
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If the goods to be exported require a license, the exporter has to apply for an export license in advance from the responsible national authority and submit it when exporting the goods. In SAP Customs Management you can process the export declaration as a message and have it printed on the form for the Single Administrative Document. The shipper's export declaration (SED), which performs a comparable function to the export declaration in the export process in the United States, can also be printed from SAP Customs Management.
Figure 27: Shipper's Export Declaration (United States)
The SED, which is issued on form 7525-V, is used for export control, and for statistical purposes. The U. S. Census Bureau uses the SED to compile its annual foreign trade statistics. The exporter usually gives this document to the forwarding agent, together with the goods. At the actual time of export, the forwarding agent then hands the SED, and any other documents, to the customs office. The SED contains the name and address of the consignor and consignee of the goods listed, as well as other information. The goods description is based on the Schedule B nomenclature (see Import Processes). If an export license is required, the competent authority is noted on the SED.
Automated Export System (AES)

For a number of years, companies in the United States have been able to submit an SED electronically in the Automated Export System (AES). In this procedure, exporters or representatives transmit export data via Electronic Data Interchange (EDI).
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The competent customs office has the AES automatically check that the received export declaration is complete and that the export itself is permitted. If both these requirements are met, the AES sends a confirmation. If cases of errors or other impediments, exporters or representatives are sent an appropriate message. Missing data can also be sent later in an electronic correction message. In certain cases, a declaration that is initially incomplete may be permitted, provided that a supplementary declaration is submitted within a specified time period after the goods have been shipped. In SAP Customs Management, SAP GTS offers a certified connection to the AES. The required message types are preconfigured in the delivery system, but you can print the SED on the appropriate form. You will find the message types required for the AES connection in the Customizing of the SAP GTS system. Choose SAP Global Trade Services ! SAP Customs Management ! General Settings ! Communication Processes ! Define Messages for Communication Processes.
Billing Document Integration

An export declaration issued by you from SAP GTS is always based on an export customs shipment, an SAP GTS document which you can either create manually or have it generated automatically by transferring a billing document from the feeder system.
Figure 28: Billing Document and Customs Shipment
If you want to transfer billing documents from the SAP R/3 or SAP ECC feeder system for the services of the SAP Customs Management, you must first tag the document types used for the billing as relevant to SAP GTS. In the Customizing of the feeder system, choose Sales and Distribution ! Foreign Trade/Customs !
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SAP Global Trade Services - Plug-In ! Control Data for Transfer to SAP Global Trade Services ! Configure Control Settings for Transfer. Choose the application level SD0C and create entries for all the relevant document types. In each entry, set the Call Up SAP Customs Management Services indicator. You first have to implement the function module exit EXIT_SAPLSLL_LEG_CDPIR3_002 in the feeder system (SAP enhancement SLLLEG01). The feeder system needs this exit during the billing document transfer to decide which of the two SAP Customs Management services - customs processing or transit procedure - the corresponding customs shipment is to be created for. If you only want to use the customs processing service, you do not need to implement the exit if the feeder system has the release level SAP ECC 6.0. In this case, SAP GTS always creates an export customs declaration for the billing document of the feeder system. Note: In SAP GTS 7.0, a distinction is made between "customs shipment" documents as the basis for opening a transit procedure, and an "export customs declaration" as the basis for submitting an export declaration. The customs shipment or the export customs declaration in SAP GTS accepts basic data (goods recipient, material number and quantity and weight, values, and incoterms) from the billing document. The SAP GTS system adds customs-specific data such as statistical code numbers and customs procedures. Certain data, such as means of transport and type or nationality of the mode of transportation, can be transferred by the system directly from the foreign trade header data of the billing documents, while other data can be transferred with the exit EXIT_SAPLSLL_LEG_CDPIR3_002 (for example, customs offices). From SAP GTS 3.0 and later, you also have the option of filling field values from tables with default values (defaulting data). You will find these tables in the Customizing of SAP GTS, at SAP Global Trade Services ! SAP Customs Management ! General Settings ! Procedures for Defaulting Data.
Output Determination in SAP GTS

When creating the customs shipment, the SAP GTS performs an output determination. This output determination is specific to SAP GTS and is used to determine the messages and/or documents to be output on the basis of the customs shipment. These can include EDI messages (such as export declarations within AES or transit declarations within NCTS) or documents to be printed, such as certificates of origin or movement certificates.
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Figure 29: Output Control in SAP GTS
To control output determination and message output, SAP GTS uses the Post Processing Framework (PPF), which is an application-independent intrument for outputting messages in different formats and transmission media (print output on forms, transmission by EDI) or for starting licensing procedures (starting a workflow). Similar to the classic output control in logistical applications of SAP R/3 and SAP ECC, PPF generates what are known as actions, when certain pre-defined conditions are fulfilled in a process. These actions correspond to the output of the output control and, like them, they can be processed at once or at some later point in time. PPF is part of the SAP Web Application Server. With the SAP GTS software, a large number of messages are suppied on forms for the electronic communication with customs officials and for document printing. You will find these messages in client 000 at SAP Global Trade Services ! SAP Customs Management ! General Settings ! Communication Processes ! Define Messages for Communication Processes. For printable documents such as customs declarations on the EC Single Administration Document, certificates of origin, or movement certificates, you usually have two form versions to choose from (SAP Smart Forms and the Portable Data Format of Adobe Inc.). Note: You can add your own PDF forms for document printing in SAP GTS. For this, you use the corresponding Form Builder, which you can call with transaction SFP. The controls for output determination and message output are mostly preconfigured in SAP GTS. You will find the corresponding table at SAP Global Trade Services ! SAP Customs Management ! General Settings ! Communication Processes ! Define Control Settings for Communication Processes.
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Exercise 7: Export Declarations in the AES

Exercise Objectives
After completing this exercise, you will be able to: Create and send an export declaration in the AES
Business Example
Your company, IDES US, exports ball bearings to India and Germany. You want to submit an electronic export declaration in the AES.
Task:
IDES US sells the ball bearing T-BW03-## to customer 98765 in India and to IDES Germany (customer number 10000). Once the two transactions have been checked in SAP Compliance Management, you have to prepare to output the export declaration in the AES from SAP Customs Management. 1. From your billing due list, bill the two outbound deliveries from Exercise 6 in the Export Licenses lesson. Select your outbound deliveries using the document numbers. Also make a note of the document numbers of the billing documents: ______________, ______________. Check whether your billing documents have been transferred from the feeder system to the SAP GTS system and that customs shipments have been created as a basis for your export declarations. Hint: You will find the customs shipments for your billing documents in the SAP Customs Management area of the SAP GTS cockpit by choosing Customs Processing - Import/Export in the Monitoring area. 3. Call up for further processing, the customs document for the export from the United States to Germany. On the Handling tab page, enter RZ in the Cust. Inv. Status field (AES option 2: Full Pre-Departure Filing). Check whether the export declaration in the AES is proposed as a message for issue in the document (Communication tab page). If it is, send the message.
2.
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Solution 7: Export Declarations in the AES

Task:
IDES US sells the ball bearing T-BW03-## to customer 98765 in India and to IDES Germany (customer number 10000). Once the two transactions have been checked in SAP Compliance Management, you have to prepare to output the export declaration in the AES from SAP Customs Management. 1. From your billing due list, bill the two outbound deliveries from Exercise 6 in the Export Licenses lesson. Select your outbound deliveries using the document numbers. Also make a note of the document numbers of the billing documents: ______________, ______________. a) b) c) Choose Logistics ! Sales and Distribution ! Billing ! Billing Document ! Process Billing Due List. In the SD Document field, enter the document number of the first of your outbound deliveries from exercise 6 and choose DisplayBillList. Your outbound delivery is already selected. Choose Individual billing document and create the billing document by saving. Make a note of the document number. Repeat steps a to c for the second outbound delivery from exercise 6.
d)
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2.
Check whether your billing documents have been transferred from the feeder system to the SAP GTS system and that customs shipments have been created as a basis for your export declarations. Hint: You will find the customs shipments for your billing documents in the SAP Customs Management area of the SAP GTS cockpit by choosing Customs Processing - Import/Export in the Monitoring area. a) b) c) In the SAP Customs Management area of the SAP GTS cockpit, choose Customs Processing - Import/Export. Choose the Monitoring tab page, and then choose Customs Exp. Decltns . In the Reference Number field of the Feeder Sys.Doc.Data - Billing area, choose the number of the first billing document from task 1. Then choose Execute . Hint: Using the Multiple Selection function, you can also search for the customs shipments for the two billing documents at once. d) The system displays a list containing the customs shipment that was created for your billing document. Select the document number, and choose Display Customs Shipment to call up the original document. Proceed in the same way with the second billing document and exit the document type level by choosing Back .
e) 3.
Call up for further processing, the customs document for the export from the United States to Germany. On the Handling tab page, enter RZ in the Cust. Inv. Status field (AES option 2: Full Pre-Departure Filing). Check whether the export declaration in the AES is proposed as a message for issue in the document (Communication tab page). If it is, send the message. a) b) c) Select your customs shipment to Germany in the list of customs export declarations, and choose Change Customs Shipment . Choose the Handling tab page, and enter RZ in the Cust. Inv. Status field. Choose the Communication tab page. The system proposes the message icon indicates that the message has not yet been type M0410. The issued. Select the message M0410, and choose Execute Message icon is shown. message is processed successfully, the . If the
d)
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Lesson Summary
You should now be able to: Describe various forms of export declaration Create an export declaration in SAP GTS
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Lesson: Transit Procedure at Export

Lesson Overview
The transit procedure is one of the customs procedures defined in the Community Customs Code (Article 4 (16)). The transit procedure provides traders with methods for simplifying customs processes and has thus become more important in recent years. This lesson gives you an introduction to the export procedure and provides information about how you can use the NCTS in SAP Customs Management.
Lesson Objectives
After completing this lesson, you will be able to: Describe the steps involved in and the advantages of the transit procedure Explain the ways in which the transit procedure can simplify customs processing Describe the various steps in the NCTS Create an authorization for participation in the transit procedure as an authorized consignor
Business Example
In the future, your company, IDES Germany, intends to participate in the transit procedure as an authorized consignor and submit transit declarations electronically.
Types of Transit Procedure

The transit procedure is a simplified customs procedure for importing and exporting goods into and out of the Community. There are two types of procedure, the Community transit procedure and the common transit procedure: In the Community transit procedure, goods are transported between two Community locations, sometimes via a third country. In the common transit procedure, goods are transported from the EC to an EFTA state (Iceland, Liechtenstein, Norway, Switzerland) or vice versa.
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Figure 30: Types of Transit Procedure
The customs status of the transported goods is also significant. Non-community goods are usually transported in the T1 transit procedure, while community goods are transported in the T2 transit procedure: T1 transit procedure: Transport of non-community goods between two locations in the community or between the community and EFTA countries and Romania. T2 transit procedure: Transport of community goods between two locations in the community via an EFTA country; transport of community goods between the community and EFTA countries and Romania. Note: The definitions describe the basic principles of both procedure types. There are a number of variants of the T2 procedure which regulate special cases - especially tax-based cases.
Transit Procedure at Export: Steps or Procedure

The transit procedure simplifies the processing of goods issues, as the goods do not need to be presented at the border customs office (export customs office). The goods only have to be presented at the office of departure, an inland customs office. At the office of departure, the transit declaration (copies one, four, and five of the single administrative document) is submitted. The office of departure checks the authenticity of the goods and releases them for export.
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Figure 31: Transit Procedure at Export
The transit procedure also simplifies imports. The goods being transported are presented to the office of destination, also an inland customs office, within a time period prescribed by law, to discharge the transit procedure. Only customs offices that are specifically authorized under the Transit Procedure Agreement can act as offices of destination. The office of destination usually initiates the procedure for releasing goods for free circulation, or some other customs procedure, thus relieving the burden on the border customs office (office of entry). Therefore, the goods are transported to the office of destination in bond. However, they are under customs control during this process (see Transit Procedure at Export).
Simplification: Authorized Consignor

To simplify the transit procedure, trustworthy exporters can be approved as authorized consignors by the responsible customs authority. An authorized consignor can transport goods to the office of destination, without presenting them to office of departure - or if the consignee is also authorized, the authorized consignor can transport the goods directly to the consignee.
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Figure 32: Simplification: Authorized Consignor
An authorized consignor presents the goods at the place of packing or loading. Either specially stamped forms or forms pre-stamped by the office of departure can be used for the transit declaration. The procedure used depends on the average number of transit procedures per month. The consignor also has to ensure the authenticity of the goods.
NCTS
The NCTS allows the transit procedure to be processed using Electronic Data Interchange (EDI). It is based on a UN standard for EDI communication and is used in all EC member states and in Iceland, Norway, and Switzerland. Every participating country has developed its own data processing system in accordance with detailed specifications from the European Commission. All the data is combined in a network in Brussels. In Germany, the NCTS is part of the ATLAS system, the IT procedure of the Federal Customs Administration (special procedure ATLAS transit).
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Figure 33: Process in the NCTS (Normal Procedure)
To work with the NCTS, you need an EDI converter, which is software that translates messages in EDI format into the format required by the recipient and that sends and receives messages. You also need participant software that has been certified by the national customs administration. SAP GTS, with converters from the Seeburger company, has been certified for NCTS access by the customs administrations in Germany, France, the Netherlands, and Switzerland. Participants also need a customs number for their company-specific data and a business identification number (BIN), which serves as an electronic signature. In the normal procedure, the participant (consignor) uses EDIFACT message E_DEC_DAT to send the transit declaration to the office of departure. The office of departure indicates to the consignor that it has accepted the transit declaration, using message E_TN_ACK, which also contains a job number for the procedure. The office of departure uses message E_TN_MRN to give the participant a registration number and to notify the participant that the goods have been put into the transit procedure. Once the transit procedure has been duly discharged, the office of departure sends the participant the message E_MVT_OK. If the plausibility check carried out at the customs office (using message E_DEC_DAT) reveals inconsistencies, the consignor receives the message E_FEHLER. If the participant is an authorized consignor, after the office of departure receives the message E_DEC_DAT, the office of departure does not send the authorized consignor a separate confirmation of receipt. Instead, it sends the consignor confirmation that the goods have been put into a transit procedure (either message E_ZV_MAN or E_ZV_AUT, depending on the type of transfer). In SAP Customs Management, certain message types that have already been preconfigured in a standard system for IDoc generation correspond to the EDIFACT messages used in the NCTS. The message types shown above are used in the simplified procedure.
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Figure 34: SAP GTS: Steps in the Process (Simplified Procedure)
You will find all the message types required for the transit procedure using the advanced configuration proposals in the Customizing in client 000. To send a transit declaration to the competent transit customs office, you have to process a customs shipment in SAP Customs Management. This document, which contains all the data required to process the transit procedure electronically, can be created automatically by replicating the billing documents from the SAP R/3 or SAP ECC feeder system. It can also be created manually without reference to a document in the feeder system.
Master Data for Participation in NCTS

Authorizations issued by the customs authorities, which give NCTS operators the status of authorized consignee or authorized consignor, are stored and managed as licenses in the system for the SAP Compliance Management. The same applies to securities, which the main person responsible has to hand over to the office of departure in the transit procedure.
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Figure 35: SAP GTS: Master Data for Customs Procedures
Customs code lists are used in SAP Customs Management to store official keys for specific entries in the import and export documents (such as business transaction types, modes of transport, and previous documents). Some of these entries are required in the transit procedure. Customs code lists are published by the national customs authorities. The SAP GTS Customizing of client 000 already contains some customs code lists, but companies using the transit procedure have to check these default values regularly to ensure that they are complete and up to date. Some customs authorities send electronic updates, but others just publish these updates. You will find these customs code lists in the Customizing of SAP GTS, at SAP Global Trade Services ! SAP Customs Management ! General Settings ! Customs Code Lists. In every transit procedure, the main person responsible - that is, the person who will, either himself or through an agent, transfer the goods into the transit procedure - has to provide a security at the office of departure. This is intended to reduce the risk of fraud. For example, if the duty owed is not paid within the proper legal framework once the transit procedure has been discharged in the country of destination, the authorities have recourse to the security (cash or guarantee). Product master records are also important to the NCTS process in SAP Customs Management. You have to ensure that the eight-digit commodity code from the Combined Nomenclature is assigned to each product shipped.
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Exercise 8: Creating Authorizations

Exercise Objectives
After completing this exercise, you will be able to: Create an authorization in SAP GTS
Business Example
In the future, your company, IDES Germany, intends to participate in the transit procedure as an authorized consignor and submit transit declarations electronically.
Task:
Your company has applied for the status of authorized consignor in order to participate in NCTS. The responsible customs authority has issued this status. Now create a corresponding authorization in SAP GTS. 1. In SAP Customs Management, create an authorization of the type authorized consignor for the foreign trade organization DEIDES, issued by the main customs office in Hamburg (SAP business partner DE004600). The authorization has the number DE5864ZV00## and is initially valid for one year. The goods will be shipped from the legal unit HAMBURG. Check whether IDES Germany also has the status of an authorized consignee for the transit procedure.
2.
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Solution 8: Creating Authorizations

Task:
Your company has applied for the status of authorized consignor in order to participate in NCTS. The responsible customs authority has issued this status. Now create a corresponding authorization in SAP GTS. 1. In SAP Customs Management, create an authorization of the type authorized consignor for the foreign trade organization DEIDES, issued by the main customs office in Hamburg (SAP business partner DE004600). The authorization has the number DE5864ZV00## and is initially valid for one year. The goods will be shipped from the legal unit HAMBURG. a) b) c) d) In the SAP Customs Management area of the SAP GTS cockpit, choose the button Transit/Presentation. In the Authorizations area, choose Create . Choose legal regulation TRSDE and authorization type ZV, and confirm with Enter. In the External Number field, enter DE5864ZV00##, in the Holder field, enter DEIDES, in the Valid from field, enter today's date, and in the Valid to field enter a corresponding date (today's date + one year). In the Attributes with Multiple Specific. area, double-click on Legal Units and choose Insert Row . In the Legal Unit field, enter HAMBURG. In the Attributes area, enter the foreign trade organization DEIDES and the customs office DE004600. Then set the status to Issued. In the Attributes with Multiple Specific. area, choose Status. Create the authorization by saving.
e)
f) g) 2.
Check whether IDES Germany also has the status of an authorized consignee for the transit procedure. a) b) c) d) In the SAP Customs Management area of the SAP GTS cockpit, choose the button Transit/Presentation. In the Authorizations area, choose Display . Choose legal restriction TRSDE and authorization type ZE. Then call the input help for the Authorization field and choose Enter. Accept the system default by double-clicking on the authorization number, then select Enter to display the license for the authorization.
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Lesson Summary
You should now be able to: Describe the steps involved in and the advantages of the transit procedure Explain the ways in which the transit procedure can simplify customs processing Describe the various steps in the NCTS Create an authorization for participation in the transit procedure as an authorized consignor
Related Information
EC brochure on the transit procedure (this is a link to the English version, but there are versions in other community languages): http://europa.eu.int/comm/taxation_customs/resources/documents/annex_I_transit_brochure_en.pdf
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Lesson: Letter of Credit

Lesson Overview
In foreign trade, because of the large physical distance between the business partners and the underlying legal and political conditions, there is an increased credit risk. The letter of credit is frequently used as a guarantee against this risk. This lesson will show you how SAP GTS supports letter of credit processing.
Lesson Objectives
After completing this lesson, you will be able to: Explain the purpose of the letter of credit Explain letter of credit processing in SAP GTS
Business Example
IDES Germany exports its products to countries in which, for various reasons, payment of a simple billing document is out of the question. Therefore, the company generally agrees on payment on letter of credit basis with customers in such countries.
Letters of Credit in Foreign Trade

In foreign trade, there is an increased credit risk. In the case of unwillingness or inability to pay, or in the case of payment delays, the exporter has virtually no hope of making valid claims against the importer. For importers in countries whose currency is not freely convertible, collection documents and letters of credit are among the few legal payment options. For this reason, these payment conditions play a major role in foreign trade. The basic principle of both processes is payment against documents: The importer receives the documents required for importing the goods (usually a commercial invoice, a packing list, a bill of lading, or often a certificate of origin and an insurance certificate) either against payment of the purchase price (documents against payment, abbreviation d/p) or against acceptance (documents against acceptance, abbreviation d/a). In the latter process, the importer commits itself to accept a bill of exhange in exchange for the documents. In contrast to a collection document, with a letter of credit, the bank authorized to process the transaction assumes an obligation to pay the exporter that is independent of the fulfillment of the purchase contract: The bank has to pay the exporter the letter of credit amount or accept the bill of exchange, once the documents listed and described in detail in the letter of credit have been received by the bank by the due date in a form that conforms to the letter of credit.
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There is a considerable number of letter of credit forms which differ from each other in terms of refusability, confirmation and transferability. The illustration below represents the common case of an unconfirmed sight letter of credit as an example of an export with letter of credit processing.
Figure 36: Basic Principle of Letter of Credit Processing
In general, the payment condition document against payment or document against acceptance on a letter of credit basis is generally agreed before the purchase contract. Often the exporter's order confirmation serves as a basis for the importer (the opener) for the letter of credit order which he issues to his house bank or to a bank at which he has sufficient credit. The bank that opens the letter of credit (letter of credit bank) can authorize a bank in the exporter's country to process the payment. This letter of credit office notifies the exporter (the letter of credit beneficiary) of the letter of credit. The exporter checks the text of the letter of credit and - if no correction is necessary - ships the goods, but without the documents required to import them into the importer's country. Instead, he submits these documents to the letter of credit office. The office checks that the documents conform to the letter of credit (complete and in accordance with the text of the letter of credit) and forwards them to the letter of credit bank. The letter of credit bank in turn checks the documents and authorizes the letter of credit office to pay the letter of credit amount. The bank issues the documents to the importer, who can now import the goods.
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If the letter of credit is confirmed, then the letter of credit office agrees to a payment promise independent of the payment promise of the letter of credit bank. That is, it pays once the documents it has received are found to conform to the letter of credit. However, this increased guarantee involves considerably higher costs for the exporter. Note: Letters of credits can be opened as revocable or irrevocable. Because revocable letters of credit involve a higher risk for the exporter - the letter of credit bank can revoke its payment promise at any time - they are relatively rare. The legal basis of all types of letter of credit are the Standardised Guidelines and Customs of Documentary Credits (ERA 500) of the International Chamber of Commerce in Paris. These guidelines are presently being revised, with the revised version due to be published in the fall of 2006.
Letter of Credit Processing in SAP GTS

The letter of credit processing in SAP GTS is a service of SAP Risk Management. It functions similarly to the legal control service in SAP Compliance Management: Letters of credit are mapped in the system in the form of licenses. If a payment on letter of credit basis is planned for a business partner, the system checks whether a letter of credit exists that corresponds to the data of the customs document. If it finds such a master record, it automatically assigns it to the customs document. Otherwise it blocks the document for further processing.
Figure 37: Letter of Credit Processing in SAP GTS
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The letter of credit processing service uses the documents of the SAP Compliance Management and SAP Customs Management services. You can already transfer the sales document from the feeder system to SAP GTS in order to check whether a letter of credit is required for the planned export. In the Customizing of the service, you specify which kinds of letter of credit the business department can manage in the form of licenses in SAP GTS. The system checks whether a letter of credit is required for an export on the basis of determination records, which can consider only the country of destination or the business partner, or a combination of the two. A customs document blocked by the letter of credit processing service can only be unblocked again by the assignment of a corresponding letter of credit license. In the license of the letter of credit, you can also list the documents required for the subsequent bank submission, in addition to core data such as validity periods, letter of credit value and incoterms, as long as they are output from SAP GTS. The address of the business partner can be changed in the license for the purpose of presenting these documents in a form that conforms to the letter of credit. These changes only affect the print output and not the actual master record of the business partner. Because the licenses for letters of credit enable a value or quantity depreciation, you can also map letters of credit for partial deliveries in SAP GTS.
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Lesson Summary
You should now be able to: Explain the purpose of the letter of credit Explain letter of credit processing in SAP GTS
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Lesson: Restitution
Lesson: Restitution
Lesson Overview
SAP Risk Management enables companies in the EC that export agricultural products or foodstuffs to apply for and manage Common Agricultural Policy (CAP) export licenses and restitutions for these goods in the system.
Lesson Objectives
After completing this lesson, you will be able to: Explain the economic and legal background of restitution Describe the features of the 'Restitution' service
Business Example
In the future, your company, which exports agricultural products and some derivatives, intends to map the management of CAP licenses and claims for refunds in SAP GTS.
Economic Background
The EC pursues what is known as the Common Agricultural Policy, the main goal of which is to ensure the competitiveness of Community products in the world market. The Common Agricultural Policy is based on CAP law, which imposes import duties on imports of third-country products to increase the cost of these products to Community price levels. It also indirectly subsidizes exports through restitutions. For this purpose, the EC specifies domestic prices for the goods affected by the Common Agricultural Policy and import duty types and amounts, and in some cases, also specific import prices and/or quality standards (in particular for fruit and vegetables). General restrictions can also be placed on the import quantities of certain products. To date, 22 CAP goods classifications have been defined for the goods described in Annex I of the articles of agreement. The monitoring rules and quality standards in each CAP goods classification vary, and there are also supplementary rules for trade involving processed products (Non-Annex I Goods), such as bakery products and confectionery. Specific import duties and restitution rates also apply to these products. Restitutions are intended to compensate for the differences between domestic prices in the EC and prices on the world market. As a result, exporters can offer CAP products at a competitive price in third-country markets.
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Figure 38: Restitution
The national customs authorities are responsible for restitutions, and restitutions must be claimed in connection with the export declaration for each export (export declaration for refund claim purposes). As a rule, refund claims are dependent on the presentation of an appropriate CAP license. With these licenses, which are issued upon application by the national authorities in the member countries, the EC monitors the movements of agricultural products. CAP licenses authorize and oblige exporters to export the approved product quantities. Note: To import CAP products, you have to apply for comparable CAP licenses for imports.
CAP Goods Classifications

Trade within the EC and foreign trade with agricultural products is regulated by law in 22 product-related CAP goods classifications. The Common Agricultural Policy makes a fundamental distinction between two categories of goods: Agricultural products (otherwise known as Annex I goods) Specific processed derivates (otherwise known as Non-Annex I goods)
Export refund amounts are dependent on the CAP goods classification to which the products belong and they change on a regular basis. Ranges of goods define the products for which restitution can be claimed. The CAP products list contains all the products on which a refund can be claimed, together with their commodity codes according to the Combined Nomenclature (CN). The CAP products list adds a four-digit code to these commodity codes. Depending on the product and country of destination, specific export refunds are defined by the EC and published by the national authorities.
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Lesson: Restitution
Figure 39: CAP Products List
To use the restitution service in SAP GTS, you first have to create a suitable legal regulation, and a numbering scheme (see the Nomenclatures and Classification lesson) for the 12-digit code of the CAP products list in SAP Risk Management. In the Restitution view, you assign the correct list numbers to all the product masters of the products concerned.
Process Flow in SAP Risk Management

The process flow for the restitution service has a similar structure to product-related export controls in SAP Compliance Management (legal control service). Like export licenses, the CAP licenses that are required for restitution are mapped as licenses in SAP GTS. At this master data level, you also record the appropriate restitution rates.
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Figure 40: Process Flow in SAP Risk Management
The system tries to assign the license type CAP License to each customs document that has been created for an export shipment of a CAP product in the feeder system. For each CAP license, you can specify maximum quantities from which the system deducts the product quantities to be exported. In each CAP license, you can display the list of customs documents that have already been assigned and the remaining quantities for future exports. The system blocks customs documents to which it cannot assign a CAP license. In SAP Risk Management, you can check first whether you have any right to a refund. If restitution rates have been entered in the system for all the CAP products that are to be exported, you can also calculate the expected export refunds yourself. In the Restitution view of the product master, you can store a bill of product or recipe, in addition to the CAP products list number and additional data for the CAP license. These bills of material/recipes are essential if you wish to claim a refund on the export of Non-Annex I goods. The system connects them to the export customs shipments by means of the product master.
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Lesson: Restitution
Lesson Summary
You should now be able to: Explain the economic and legal background of restitution Describe the features of the 'Restitution' service
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Unit Summary
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Unit Summary
You should now be able to: Create goods list numbers Assign goods list numbers to your product masters Manage export licenses in SAP GTS Describe various forms of export declaration Create an export declaration in SAP GTS Describe the steps involved in and the advantages of the transit procedure Explain the ways in which the transit procedure can simplify customs processing Describe the various steps in the NCTS Create an authorization for participation in the transit procedure as an authorized consignor Explain the purpose of the letter of credit Explain letter of credit processing in SAP GTS Explain the economic and legal background of restitution Describe the features of the 'Restitution' service
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Test Your Knowledge
Test Your Knowledge

1. Which of the product categories shown come under the Dual-Use Regulation or Export Administration Regulations?
! ! ! ! ! 2.
A B C D E
Materials processing Propulsion systems Ammunition Plants and machinery Computers
Which two basic types of export licenses are used in the EC and the United States?
3.
Which export documents can you output from SAP GTS?

! ! ! ! ! 4.
A B C D E
Shippers Export Declaration Export declaration on the Single Administrative Document Dispatch note model T1 NAFTA certificate of origin Summarized declaration
Which communication standard is used in the AES?
5.
What is the main difference between a T1 and a T2 transit procedure?
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6.
How does the procedure simplify the export process for authorized consignors and the import process for authorized consignees?
7.
The CAP products list number is identical to the number in the Combined Nomenclature.
Determine whether this statement is true or false.
! !
True False
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Test Your Knowledge
Answers
1. Which of the product categories shown come under the Dual-Use Regulation or Export Administration Regulations? Answer: A, B, D, E The Dual-Use Regulation and the Export Administration Regulations address only goods that can be used for both military and civil purposes. 2. Which two basic types of export licenses are used in the EC and the United States? Answer: First, there are General Licenses that, after publication, can be used by any exporter, without them having to submit an application. Second, there are Individual Licenses that exporters have to apply for individually from the competent authorities. 3. Which export documents can you output from SAP GTS? Answer: A, B, C, D Summarized declarations only play a part in the levying of import duty. 4. Which communication standard is used in the AES? Answer: AES uses an EDI standard. 5. What is the main difference between a T1 and a T2 transit procedure? Answer: Non-community goods are usually transported in a T1 transit procedure, while community goods are usually transported in a T2 transit procedure. 6. How does the procedure simplify the export process for authorized consignors and the import process for authorized consignees? Answer: The procedure simplifies the export process for authorized consignors because they do not have to present goods at the office of departure. The procedure simplifies the import process for authorized consignees because they can receive goods at their own site or at another specified location, without the goods having to be presented to the office of destination.
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7.
The CAP products list number is identical to the number in the Combined Nomenclature. Answer: False The CAP products list number adds an extra four digits to the commodity code in the Combined Nomenclature, bringing it to a total of 12 digits.
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Unit 3
Import Processes
Unit Overview
In this unit, we will discuss electronic customs declarations in SAP Customs Management. The unit also explains how you can use SAP Compliance Management for imports.
Unit Objectives
After completing this unit, you will be able to: Describe how customs tariffs are structured Create commodity codes in SAP GTS Explain customizing the classification function in SAP Customs Management Describe the steps in the import process Explain the basic principle of customs value calculation Describe the various steps in the transit procedure Discharge a T1 transit procedure from within SAP GTS using an arrival notification Explain the bonded warehousing procedure Set up a bonded warehouse in SAP GTS Receive goods in a bonded warehouse in SAP GTS Describe forms of import control Use the embargo check service at import
Unit Contents
Lesson: Nomenclatures and Classification .................................. 114 Exercise 9: Classifying Product Masters ................................123 Lesson: Import declaration ....................................................126 Lesson: Transit Procedure at Import .........................................137 Exercise 10: Discharging a Transit Procedure .........................143 Lesson: Bonded Warehousing Procedure...................................150 Exercise 11: Transfer to Bonded Warehousing Procedure ...........157 Lesson: Forms of Import Control .............................................161 Exercise 12: Embargo Check.............................................169
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Lesson: Nomenclatures and Classification

Lesson Overview
Before goods can be imported, they have to be classified in the appropriate national customs tariff. Customs authorities use the customs tariff number that is submitted in the import declaration to identify the customs duty rate and any other duties, such as excise duty. In this lesson, you will learn how customs tariffs are structured and how to create and manage customs tariff numbers in SAP GTS.
Lesson Objectives
After completing this lesson, you will be able to: Describe how customs tariffs are structured Create commodity codes in SAP GTS Explain customizing the classification function in SAP Customs Management
Business Example
Your company, IDES Germany, would like to import ball bearings from IDES USA. Before doing so, however, it has to classify the appropriate product masters, meaning that the product masters have to be matched to EC customs tariffs.
SAP GTS in the Import Process

During the import process, SAP Customs Management helps the relevant department communicate with the authorities while the goods to be imported are placed in a customs procedure.
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Figure 41: SAP GTS in the Import Process
In SAP Customs Management, you can electronically process a summarized declaration with a supplementary declaration and release either for free circulation or into a bonded warehouse procedure within the Automated Tariff and Local Customs Processing System (ATLAS) provided by the German customs administration. These procedures are explained in more detail in the lessons that follow. Importers in the United States can print out the main official forms (Entry Summary, Inward Cargo Manifest). If you are registered as a consignee in the electronic transit procedure (NCTS) in Germany, France, the Netherlands, or Switzerland, you can create the messages used to discharge this procedure from within SAP Customs Management (see Transit Procedure at Import).
Nomenclatures and Customs Tariffs

The Harmonized System (HS) is the foundation of today's most frequently used nomenclatures. The HS is based on an international agreement and is managed by the World Customs Organization (WCO) (see Introduction). The HS encodes goods in six-digit number sequences. These commodity codes form the core of the customs tariffs of all the countries that have signed the agreement. The figure below shows an example of the German Electronic Customs Tariff (EZT).
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Figure 42: Nomenclatures and Customs Tariffs (Example EC/Germany)
In July 1987, the EC founded the Combined Nomenclature (CN) in Council Regulation (EEC) No. 2658/87, a nomenclature both for statistical and customs tariff purposes. Because the community is a signatory of the International Agreement on the Harmonized System, the CN had to be based on the HS. The first six digits of the eight-digit CN commodity code emanate from the HS code. In the EC, the CN commodity code has to be specified on the export declaration. In accordance with EU directive No. 638/2004, it is also the commodity code to be used for Intrastat declarations, provided the national regulations of member states do not call for a more detailed breakdown. The same regulation laid the foundation for the Integrated Tariff of the European Communities (Tarif Integr Communautaire/TARIC). In TARIC, the CN commodity codes become ten-digit codes. The extra two digits are for encoding community measures such as tariff quotas and customs ceilings, suspensions of duty, and antidumping surcharges. The regulation also provides for further digits to be added to the CN or the TARIC for the purposes of creating national classification systems. In Germany, the EZT added an eleventh digit to the community system for the purposes of encoding sales tax rates, excise duty, and national prohibitions and restrictions. In the EC, the number from the respective national adaptation of the customs tariff has to be specified when goods are being imported. The HS also forms the basis of the U.S. commodity coding systems, known as the Harmonized Tariff Schedule of the United States (HTS) and Schedule B. The first six digits of the ten-digit commodity codes in the HTS and Schedule B are the same as the six digits in the HS commodity codes.
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Figure 43: Harmonized Tariff Schedule und Schedule B (USA)
HTS commodity codes are specified on import declarations, while the Schedule B nomenclature is used on export declarations. The two systems are managed by different authorities: the United States International Trade Commission (USITC) is responsible for the HTS, while Schedule B is managed by the United States Census Bureau. The U.S. Census Bureau also publishes the annual foreign trade statistics. The first eight digits of the HTS commodity code encode customs duties. As in the EC, reduced customs duty rates may be used alongside standard customs duty rates, depending on the country of origin. The last two digits of the ten-digit HTS commodity codes are mainly used for statistical purposes.
Figure 44: Example of a Commodity Code (EZT)
The HS first splits goods into sections. These sections are numbered with Roman numerals. For example, Section II denotes vegetable products. The sections of the HS are further sub-divided into chapters. The example above shows a commodity code from Chapter 08, Section II (Edible fruit and nuts; peel of citrus
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fruit or melons). Every chapter has headings (in the example wine grapes, fresh or dried) and subheadings for the various goods categories. The HS commodity code 080610 designates fresh (as opposed to dried) wine grapes. In the CN, the commodity code from the HS has one extra subheading. The CN commodity code 08061010 designates table grapes (as opposed to grapes for producing wine). This subheading is used to encode standard customs duty rates, and sometimes also Community prohibitions and restrictions. For this reason, import control regulations always refer to the CN commodity code of the goods in question. The TARIC subheading 0806101005 designates wine grapes of the sort 'Empereur' (vitis vinifera F.), from January 1 to January 31 and from December 1 to December 31. One of the things encoded in this subheading are tariff quotas. The Community allows a specific amount of Empereur table grapes to be imported from specific third countries within a specified time period at a reduced customs duty rate. The German customs administration's EZT uses the eleventh digit in the commodity code to store information such as special tax rates for the product or license requirements. This commodity code has to be specified on the import declaration. The U.S. nomenclatures, HTS, and Schedule B are also based on the HS (see above). Therefore, the first six digits of the EC and the U.S. commodity codes are identical (in the example, 086010). For fresh wine grapes, digit seven and eight of the HTS are different, depending on the time of import into the USA. The ninth and tenth digits are known as the statistical suffix. Goods categories are often further differentiated, or differentiated for the first time, at this level. The Schedule B system, on the other hand, has only one commodity code to designate fresh wine grapes being exported from the United States (0860100000). As in this example, the Schedule B system (which is mainly used for statistical purposes) is often less precise than the HTS system.
Numbering Schemes and Classification

For every category of commodity code (customs tariff numbers, export list numbers, and so on), you have to define a specific numbering scheme in Customizing for SAP GTS. This numbering scheme contains the structure of the code from the source nomenclature. The figure shows the structure of a commodity code for import declarations using the EZT in the Customs Tariff Number Germany numbering scheme. This and other preparatory work will help the person who will subsequently be working with the product master records to be classified, also allowing you to upload full nomenclatures that have been acquired from a data provider, if required.
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Figure 45: Customizing Commodity Codes in SAP GTS
In the next step, you assign the new numbering scheme to the appropriate legal regulation. For example, you could link the numbering scheme EZT to the legal regulation Customs Processing Germany and the numbering scheme HTS to the legal regulation U.S. Tariff Act. This assignment enables the system to provide you with the correct nomenclature when you are maintaining a product master record, such as the export list or Commerce Control List in SAP Compliance Management, or the EZT or HTS in SAP Customs Management. Using these settings, the commodity codes themselves can either be created manually or obtained from a data provider. They have to match the format specified in the numbering scheme. If you have already classified the product masters in your SAP feeder system, you can transfer these commodity codes and their product assignment to the SAP GTS system. To do this, use the program /SAPSLL/MARC_UPLOAD_R3 to load into the SAP GTS system the assignment of commodity codes to material masters, which you previously exported from the table MARC. This program therefore saves you repeating the classification of your product masters in SAP GTS. Note: You will find a description of this data conversion procedure in SAP Note No. 806625. If you have not yet created commodity codes in your SAP R/3 or SAP ECC feeder system and assigned the product masters, but need this assignment for intra-EU trade statistics (Intrastat), you can use the program /SAPSLL/STAWN_RETRANSFER_R3 in this feeder system. This program
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fetches commodity codes and their assignment to product masters from the SAP GTS system into the SAP R/3 or SAP ECC feeder system. Tables T604, T604T and MARC are updated. Note: You find this program in the SAP GTS Cockpit of the feeder system (Transaction /SAPSLL/MENU_LEGALR3) on the tab page Master Data (Entry Retransfer Commodity Codes to Feeder System). Some providers offer foreign trade data, such as customs tariff numbers and rates of duty, for uploading into SAP GTS. In Germany, the Federal Gazette publishing house (Bundesanzeiger Verlag) is the data provider for customs tariff numbers, commodity codes, import and export control classification numbers, and boycott lists. FedEx Trade Networks and MK Technology LLC provide comparable data in the United States.
Figure 46: Data Transfer from a Provider
Data providers make this data available in XML format for automatic upload to an SAP GTS system. Numerical and text files (for footnotes, comments, keywords, and so on) are provided separately and processed in the system. Note: To upload customs tariff numbers, you use transaction /SAPSLL/LLNS_UPL101. To upload commodity codes for exports to your SAP GTS system, use transaction /SAPSLL/LLNS_UPL102. Transaction /SAPSLL/LLNS_UPL002 is used for export lists. Commodity codes are changed on a regular basis. If the data provider supplies update files in XML format, these files can be used in conjunction with the SAP GTS Reclassification function to automatically update the product master data.
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After commodity codes have been uploaded or entered manually, the user (an experienced staff member of the department or departments in question) can classify the goods to be imported and exported directly in the product master.
Figure 47: Classification Help
The system provides a classification help function to assist you in assigning the correct commodity codes. The structure of the search help has to be defined in advance in the numbering scheme of the relevant nomenclature. The EZT is shown in the example above. To find a commodity code for an import declaration in accordance with EZT, therefore, you could search the master record of the product to be classified using chapters, headings, and subheadings of the HS. Next, the system would propose the German customs tariff numbers assigned to the selected HS subheading, based on the connection between the legal regulation (which is always country-specific) and the numbering scheme. You can transfer the required number directly from the search help function to the product master. As of SAP GTS 3.0, you can classify product masters from a worklist. If several product masters are to be assigned the same customs tariff number or commodity code, mass maintenance is recommended (Transaction /SAPSLL/PR_CLWB_101 or /SAPSLL/PR_CLWB_102). You can also enter a search term in a search sub-window, instead of performing a systematic search using the structure of the numbering scheme. In the example above, the system would respond to the search term gloves by displaying the commodity code 40151910000.
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Identification Numbers for Customs Processing

To use the customs processing service in SAP Customs Management, you must link various identification numbers and official codes to your organizational units and/or business partners, depending on the procedure.
Figure 48: Identification Numbers for Customs Processing
In the system, you map all the customs offices with which you work within SAP Customs Management as SAP business partners (in the business partner role customs office / SLLCOF). You then assign the relevant official office keys to these business partner master records, using transaction /SAPSLL/BP_MAIN_DNR. You can assign an official customs identification number (called a trader identification number, or TIN, in the system) to SAP business partners with the roles foreign trade organization and legal unit in transaction /SAPSLL/BP_MAIN_COMP. If you are in Germany, you also have to enter and save the seven-digit customs number that is assigned centrally by the federal customs administration. This customs number is required for computerized customs procedures and licensing procedures, and also for regular paper-based customs declarations. In addition, a business identification number (BIN) is usually required if you wish to use electronic procedures. The BIN acts as an electronic signature. You can assign this number to an SAP business partner in the foreign trade organization role using transaction /SAPSLL/BP_MAIN_BIN.
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Exercise 9: Classifying Product Masters

Exercise Objectives
After completing this exercise, you will be able to: Classify a product master
Business Example
Before the flywheel T-BW01-## can be imported to Germany from the USA, you have to match it to the Electronic Customs Tariff (EZT).
Task:
The flywheel that you are importing into the EC from the United States still has to be classified for the import declaration in Germany. You also require the correct commodity code to enable you subsequently to dispatch it to Italy. 1. In the SAP GTS system, assign the EZT commodity code 84839020900 to the product master for the feeder system material T-BW01-##. In the Classification view, check whether the system proposes legal regulation Customs Processing Germany and the Electronic Customs Tariff (DEEZT) numbering scheme for the electronic customs tariff. Assign commodity code 84839020 for the export and transit procedure.
2.
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Solution 9: Classifying Product Masters

Task:
The flywheel that you are importing into the EC from the United States still has to be classified for the import declaration in Germany. You also require the correct commodity code to enable you subsequently to dispatch it to Italy. 1. In the SAP GTS system, assign the EZT commodity code 84839020900 to the product master for the feeder system material T-BW01-##. In the Classification view, check whether the system proposes legal regulation Customs Processing Germany and the Electronic Customs Tariff (DEEZT) numbering scheme for the electronic customs tariff. a) b) c) d) In the GTS Customs Management area of the SAP GTS cockpit, choose the button Classification. In the Classification with Tariff Code Numbers area, choose the Classify icon. Products Enter material number T-BW01-## and logical system group GROUP_GTS. Then choose Execute . Choose the Classification view. The overview of legal regulations and numbering schemes should contain various data, including legal regulation Customs Processing - Germany and numbering scheme Electronic Customs Tariff. Select the numbering scheme for the EZT. The Tariff No. field is now ready for input. Enter 84839020900. Complete the Classification Period fields with the current date (valid from date) and 31.12.07 (valid to date). Confirm these entries with Enter. Select the numbering scheme for the Nomenclature for Foreign Trade Statistics (DESTA). The Tariff No. field is now ready for input. Enter 84839020, complete the valid from and valid to dates, and confirm these entries with Enter. Save your changes.
e)
2.
Assign commodity code 84839020 for the export and transit procedure. a) b)
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Lesson Summary
You should now be able to: Describe how customs tariffs are structured Create commodity codes in SAP GTS Explain customizing the classification function in SAP Customs Management
Related Information
Databases of the European Commission Taxation and Customs Union (access to various sources of information, including the TARIC): http://europa.eu.int/comm/taxation_customs/dds/de/
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Lesson: Import declaration

Lesson Overview
SAP Customs Management allows you to use the specialized procedures summarized declaration and import within the German customs administration's internal computerized procedure, known as ATLAS. It also allows you to print some of the documents required for imports to the United States. This lesson explains the process of releasing goods for free circulation in the EC. It also describes the purpose of customs value calculation in SAP GTS, and how it works.
Lesson Objectives
After completing this lesson, you will be able to: Describe the steps in the import process Explain the basic principle of customs value calculation
Business Example
IDES Germany wants to release for free circulation in the Community, the ball bearings that it ordered from IDES US. It is already using the simplified declaration procedure.
Customs Procedure at Import (EC)

The import process starts with the introduction of goods into the Community customs territory, that is, when the goods cross the border. From this point up until the import procedure is duly closed, the goods are under customs control. Control procedures are permitted at any time. This process is basically the same in many countries.
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Figure 49: Import Procedure (EC)
Once the goods cross the border they immediately have to be presented to the competent customs office, unaltered and using prescribed itineraries (customs-approved routes). The presentation to customs is a notification to the customs office that the goods have arrived at the public office. In the EC, goods to be imported are accompanied by a summarized declaration if they cannot immediately be put into a customs procedure. In the United States, the Entry Summary (CF 7501) performs a similar function. The goods are held in temporary storage until they are placed into a customs status. They can therefore be stored only in locations appointed by the competent customs office. The goods have to be placed into a customs status within a specified period of time. In the EC, the most common case is transfer into a customs procedure, such as release for free circulation, or placement in a bonded warehouse procedure, or re-exportation. The import process comes to a close once the goods have been processed using the chosen procedure. If the import is preceded by a transit procedure, (see the lesson Transit Procedure at Import), the transit declaration (copy number four of the Single Administrative Document, or the Transit Accompanying Document for electronic processing) is also the summarized declaration. Customs duties and taxes are usually levied on imported goods. The figure shows the basic import process
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Figure 50: Releasing Goods for Free Circulation (EC)
After the goods have been declared at the competent customs office, the customs office checks the papers that are handed in with the goods and the goods themselves (customs inspection). If the authorities establish that the import is permitted, import duties are calculated and time limits for payment are set. Once the import duties are paid, the customs office releases the goods for free circulation. In the EC, this basic process is regulated as the customs procedure Release for Free Circulation, as set out in articles 79 to 83 of the Community Customs Code. This customs procedure is used for importing non-EC goods into the Community customs territory. Once the customs procedure has been properly completed, the goods have the same status as goods that originated in the Community. Customs declarations are made on copies 6, 7, and 8 of the Single Administrative Document if the procedure is not being carried out electronically. There is a similar procedure in the United States. If the goods to be imported are affected by import control procedures, the importer has to obtain a license from the national authority in advance. During the customs inspection, the customs office uses these documents to check whether the import is permitted.
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Figure 51: Simplified Declaration Procedures (EC)
Companies do not always have on hand all the data required for an import declaration. For this reason, the EC allows such companies to apply to the competent customs authority for authorization to use certain simplified procedures. Simplified declaration procedure: the importer initially has to provide only a simplified customs declaration when presenting the goods at the clearance office specified in the authorization document. After the customs inspection and authorization check have been carried out, the clearance office releases the goods to the importer for the requested customs procedure (for example, release for free circulation). The import duties are not collected by the customs office of settlement until the supplementary customs declaration has been submitted. The supplementary customs declaration provides additional information not contained in the simplified declaration. The time period for the payment of duties is one calendar month. For this reason, the supplementary customs declaration is usually handed in once a month and contains the details of multiple simplified customs declarations. It has to reach the customs office at the latest by the third working day of the following month. If the person making the declaration calculates the import duties himself, this time period can be extended to the tenth calendar day. In the local clearance procedure (LCP), the goods are presented to customs on the premises of the ship-to-party. The imported goods are recorded in the company's accounts department. This takes the place of the customs declaration and the goods recorded have to be reported to the office of clearance promptly in a local clearance notification. A supplementary customs declaration then has to be submitted to the office of settlement within the prescribed periods.
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Because at the time of the simplified declaration or recording of goods, the goods are released to the importer without import duties having been paid, the parties involved have to provide a form of security, usually a cash payment or a guarantee.
Using ATLAS Imports with SAP GTS

For your import processing, SAP Customs Management enables you to use the German customs administration's internal computerized procedure, known as ATLAS (special procedures summarized declaration and free circulation). In both procedures, parties exchange the relevant data in UN/EDIFACT format.
Figure 52: ATLAS Customs Declarations - Summarized Declaration and Import
In SAP Customs Management, the messages required for this procedure are preconfigured. The Post Processing Framework (PPF) is used for the actual output control. A process template for customs processing with ATLAS already exists. The individual declaration forms (import declaration, simplified customs declaration, supplementary customs declaration, and so on) are assigned as process activities to the process template for electronic customs processing within ATLAS. Note: You can find all messages, process templates, and other elements required to connect to ATLAS and print documents in the Customizing settings for client 000. SAP GTS has been certified by the German customs administration as participant software for release for free circulation and the summarized declaration with converters from the Seeburger company. Certification for other ATLAS procedures and electronic procedures in other countries is in the pipeline.
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The basis for the summarized declaration and the import declaration is always the customs shipment in SAP GTS. If release for free circulation is the first customs procedure, you must create this document in SAP Customs manually. That is, there is no technical link with a purchase process in the feeder system. As of SAP GTS 7.0, you can create customs shipment documents using a template. Additionally, you can use the SAP GTS procedure for defaulting data to fill certain fields automatically. To use SAP GTS to participate in ATLAS, the products masters of all goods for import must have been classified in accordance with the electronic customs tariff (EZT). Your must assign your foreign trade organization a trader identification number (TIN) and a business identification number (BIN), and an office number to each customs office. If you are taking part in a simplified declaration procedure or a local clearance procedure, you must map the appropriate authorizations in the form of licenses in SAP GTS. The system checks during document processing whether you have valid authorization for the procedure selected. Only if this is the case can the customs import declaration be sent. Many fields (for example, inland mode of transport/border, means of transport at the border, placement into customs status), require you to enter official keys. These keys must be defined beforehand in Customizing of SAP Customs Management. You will find the appropriate customs code list for participation in ATLAS in client 000. Change or expand these as required. Note: As of SAP GTS 7.0, you can adjust the incompleteness check for the individual declaration forms. Choose SAP Global Trade Services ! SAP Customs Management ! General Settings ! Document Structure ! Control Incompleteness Checks in Customs Shipments and Customs Declarations. In addition to the process component import, SAP GTS 7.0 also supports the process components inward processing and bonded warehousing procedure. In the inward processing customs procedure, non-Community goods are imported into the EC to be worked or processed or improved without import duties being levied. Upon completion of this work, they are re-exported as so-called inwardly processed goods, provided such goods are not placed into another customs status, such as being released for free circulation into the EC. The bonded warehousing procedure will be presented to you in the lesson of that name.
Customs Duties
Customs duties are charged as either value customs duties or specific customs duties. A value customs duty is calculated on the basis of the customs value of the goods in question. The customs duty rate is a percentage of the customs value. Specific customs rates, on the other hand, are absolute values. Specific customs duty rates are calculated on the basis of the amount, the net weight, or the volume of the goods to be imported. Value customs duties account for over 95% of all customs duties.
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Figure 53: Assessment Basis for Collecting Customs Duties
The GATT customs value code regulates the calculation of customs values on the basis of the transaction value. As a signatory of the agreement, the Community has incorporated this procedure into the Community Customs Code (Council Regulation (EEC) No. 2913/92, Articles 28 to 36). Almost all WTO member states use the rules detailed in the GATT customs value code to calculate customs values. Besides customs duties, import turnover taxes and special excise duties may have to be paid. Customs duties in the EC are calculated on the basis of the Integrated Tariff of the European Communities, which is based on the Combined Nomenclature (CN). This Integrated Tariff of the European Communities primarily sets out standard rates of duty for the goods encoded in the CN. However, the standard rate of duty is not always used. The EC has set tariff reductions, exemptions from customs duties, and special customs tariffs for many goods. Some of these are limited to specific time periods or quantities.
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Figure 54: Tariff Reductions and Surcharges (EC)
There are tariff quotas or customs ceilings for many products, particularly agricultural products and the processed products thereof. A customs ceiling specifies a reduced rate of duty for the import of specific goods from particular countries. The quantity that can be imported at this reduced rate of duty is restricted in the customs ceiling. The goods in question can generally be imported at any time, but at the (often much higher) standard rate of duty. The same applies to tariff quotas. However, time restrictions are always placed on tariff quotas. If the tariff quantity has been used up before the deadline, the tariff quota can no longer be used. A customs ceiling, on the other hand, is always suspended by a Commission regulation. Similarly, suspensions of duty in the EC are always restricted to a certain time period. Import duty is usually suspended temporarily for economic reasons and employment policy purposes, by reducing duties on the import of raw materials, semi-finished products, and other components that cannot be obtained or manufactured in the Community. Customs tariff preferences are reduced rates of duty for specific goods based on bilateral or multilateral agreements that have complicated rules of origin and processing lists (see the unit Origin of Goods and Preferences). GATT defines dumping as the export of goods at a price that is lower than the sale price of the same good in the country of origin. Antidumping duty rates are intended to counteract any potential competitive advantage that third countries may gain through dumping prices. They are always applied in addition to the standard rate of duty or the reduced rate of duty. Countervailing duty is applied to goods that have been illegally subsidized.
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Calculating and Declaring Customs Values

The procedure for calculating customs values is regulated in Articles 28 to 36 of the Community Customs Code (CC).
Figure 55: Calculating Customs Values (EC)
According to Article 29 of the Community Customs Code, the customs value of imported goods is the transaction value, that is to say, the price actually paid or payable for the goods when sold for export to the customs territory of the Community. Articles 32 and 33 of the Community Customs Code regulate what sums are to be added to or subtracted from the transaction value to obtain the customs value of the goods to be imported. If the transaction value cannot be calculated in accordance with the method set out in Article 29 of the Community Customs Code, other calculation methods have to be used in the order specified (Article 30, Community Customs Code). The transaction value of a good is usually the gross invoice price, from which any potential reductions are to be calculated. Discounts can be subtracted from the gross invoice price if the buyer can still take advantage of this at the time of import. So-called additions are to be added to the transaction value, in accordance with Article 32 of the Community Customs Code. This category applies in particular to the costs of packaging, transport, and insurance, up to the place of introduction in the Community customs territory, for the goods being imported. Certain other costs set out in Article 33 of the Community Customs Code can be deducted from the transaction value. Deductible costs include transport costs for the goods after their arrival in the customs territory of the country of destination, provided that these costs are listed separately from the gross price on the commercial invoice. If the customs value can be calculated in accordance with the model shown above, the import declaration has to be accompanied by a declaration of value.
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Figure 56: Calculating Customs Values in SAP Customs Management
In connection with ATLAS, SAP Customs Management enables you to submit a declaration of value in conjunction with such a customs declaration. A customs value calculation is provided in the customs document for this purpose. In Customizing for SAP Customs Management, you define the various types of values (such as goods value, customs value) and duties (such as third country duty rate). In the advanced settings for every value or duty type, you use preconfigured flags to specify the category (duty type) of value or duty (for example, 'antidumping surcharge'). This enables the system to use additions and deductions in the calculation and to calculate customs duties correctly. The transaction value and any additions to the price have to be entered manually in the customs shipment. The transaction value has to be entered at document item level. If necessary, additions to the price and deductions can be completed at header level. The system then distributes the total amount over the individual document items, either by their share of the weight or value. You can also have SAP Customs Management estimate actual customs duties. You either create the customs duty rates manually as master data or obtain them from a data provider. To manage customs duty rates in the system, you must create customs tariff numbers in advance. Rates of duty always refer to specific customs tariff numbers.
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Lesson Summary
You should now be able to: Describe the steps in the import process Explain the basic principle of customs value calculation
Related Information
German customs administration's ATLAS Web site: http://www.atlas.zolld.de
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Lesson: Transit Procedure at Import

Lesson Overview
This lesson will show you how you can use the transit procedure already introduced in the lesson entitled Transit Procedure at Export at import.
Lesson Objectives
After completing this lesson, you will be able to: Describe the various steps in the transit procedure Discharge a T1 transit procedure from within SAP GTS using an arrival notification
Business Example
IDES Germany regularly orders goods from a vendor in the United States. Upon arrival of the consignment of goods in the port of Rotterdam, a forwarding agent initiates a T1 transit procedure, in order to transport the goods from Rotterdam to Hamburg. IDES Germany has the status of a authorized consignee, that is, it receives the consignment at its offices directly, sending an arrival notification using NCTS to the appropriate customs office.
Steps in the Transit Procedure

When goods are introduced to the EC customs area, import duties are generally to be paid at the time the goods cross the border. As many companies that import goods are generally located at some distance from the customs area border, the EC has made provision in the Community Customs Code for a transit procedure that enables import duties to be levied close to the ship-to party. At the same time, this relieves strain on the border customs offices.
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Figure 57: Transit Procedure at Import
In the T1 transit procedure, non-Community goods are transported for presentation from the border of the customs area to an inland customs office with transit procedure authorization, duty unpaid but under customs surveillance. Upon completion of the transit procedure, the office of destination will usually initiate for goods a release for free circulation or some other customs procedure. Note: If the goods are not for the consignee's own use, but are earmarked for later export, they can be initially transferred to a bonded warehousing procedure (see the lesson Bonded Warehousing Procedure).
Simplification: Authorized Consignee

Trustworthy companies can also be approved as authorized consignees by the competent customs authority. An authorized consignee can receive goods transported in a transit procedure, without presenting the goods at the office of destination.
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Figure 58: Simplification: Authorized Consignee
An authorized consignee presents the goods at the location where the goods are handed over, and shows the office of destination that the consignment has been received. This discharges the transit procedure. The authorized consignee is also entitled to remove the identifying materials to inspect the goods. He or she then has to make a mark of receipt on the transit document that accompanies the shipment. The transit document is then presented to the office of destination. The office of destination enters an appropriate mark of receipt on the transit document and returns copy number five to the office of departure. Once the transit procedure has been discharged, the goods are released for free circulation or placed into another customs status, as with the regular procedure. The transit procedure can also be discharged electronically using NCTS.
Figure 59: Procedure processing in NCTS
The consignee informs the office of destination that the goods consignment has been received, using the message E_AN (arrival notification). The office of destination usually issues the consignee with unloading permission (message
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E_UP). Only now can the consignee check the shipment for authenticity and completeness. The consignee sends notification that the unloading and inspection have been completed with the message E_UR.
Mapping a T1 Transit Procedure in SAP GTS

As of SAP GTS 3.0 it is possible to transfer the inbound delivery from the SAP R/3 or SAP ECC feeder system into the SAP GTS system. The inbound delivery is available as a document as of SAP R/3 4.5 and helps map a shipping notification, which the supplier uses to announce that an order has been shipped. For SAP Customs Management, it is replicated as a customs shipment in SAP GTS. For its part, the customs shipment is the foundation for the arrival notification for discharging the transit procedure.
Figure 60: Discharging a T1 Transit Procedure
If, when saving an inbound delivery, the feeder system finds that the previous document type T1 and a so-called Movement Reference Number (MRN) has been entered in the document, it replicates (depending on the other Customizing settings) the inbound delivery as a customs document in the SAP GTS system. The data in the purchasing document and inbound delivery that are required for further processing are copied to the customs document. On the basis of this document, the transit procedure can now be discharged in SAP GTS. The goods receipt posting for the inbound delivery in the feeder system creates a worklist
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in the SAP GTS system. From within this worklist you can create the customs shipment for the import declaration or the local clearance notification for the bonded warehousing procedure. Note: The MRN is assigned to the transaction in each case by the competent customs office that initiated the transit procedure. It serves as an ID number throughout the entire process. If you wish to transfer inward deliveries in the feeder system to SAP GTS in order to discharge transit procedures, set the flag Call up Services from SAP Customs Management in the table in which you manage document transfers for all relevant suppliers. The appropriate application level is MM0B (Inbound/Import: Inbound Delivery Document). In Customizing the Feeder System, call up the table by choosing Sales and Distribution ! Foreign Trade/Customs ! SAP Global Trade Services - Plug-In ! Control Data for Transfer to SAP Global Trade Services ! Configure Control Settings for Transfer.
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Exercise 10: Discharging a Transit Procedure

Exercise Objectives
After completing this exercise, you will be able to: Transfer an inbound delivery from the SAP ECC feeder system to an SAP GTS system. Discharge a transit procedure on the basis of a customs shipment in SAP GTS
Business Example
IDES Germany regularly orders goods from a vendor in the United States. Upon arrival of the consignment of goods in the port of Rotterdam, a forwarding agent initiates a T1 transit procedure, in order to transport the goods from Rotterdam to Hamburg. IDES Germany has the status of a authorized consignee, that is, it receives the consignment at its offices directly, sending an arrival notification using NCTS to the appropriate customs office.
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Task 1:
You order from T-GTSUS, your vendor in the United States, the ball bearing T-BW03-##. After arrival in the port of Rotterdam, the goods are transported to Hamburg using a T1 transit procedure. Once the shipment has arrived, copy the MRN from the transit accompanying document into the inbound delivery you created for this order. Use the number provided for your group for this. Group 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 1. MRN 06NL12300000000015 06NL12300000000023 06NL12300000000031 06NL12300000000040 06NL12300000000058 06NL12300000000066 06NL12300000000074 06NL12300000000082 06NL12300000000090 06NL12300000000106 06NL12300000000114 06NL12300000000122 06NL12300000000130 06NL12300000000149 06NL12300000000157 06NL12300000000165 06NL12300000000173 06NL12300000000181 06NL12300000000190 06NL12300000000205 In the feeder system, create an order with sales document type NB for the American vendor T-GTSUS for 100 pieces of material T-BW03-##. Enter the document for purchasing organization 1000, purchasing group 001, and company code 1000.
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2.
Now create an inbound delivery for your purchase order. Before doing this, enter at document header level on the Foreign Trade/Customs tab page the previous document type T1 and the MRN listed for your group in the table. Make a note of the inbound delivery document number: ___________________.
Task 2:
Search the SAP GTS system for the customs shipment that resulted from the transfer of your inbound delivery. Check the result of the message determination and the completeness of the data. Then send the arrival notification to the competent customs office. 1. Find the customs shipment for your inbound delivery in the SAP GTS system, and check whether the system proposes a transit declaration as a message to be issued (Communication tab page). Carry out an incompleteness check, fill in any missing data, and then send the message. The office of destination is the Main Customs Office Hamburg City.
2.
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Solution 10: Discharging a Transit Procedure

Task 1:
You order from T-GTSUS, your vendor in the United States, the ball bearing T-BW03-##. After arrival in the port of Rotterdam, the goods are transported to Hamburg using a T1 transit procedure. Once the shipment has arrived, copy the MRN from the transit accompanying document into the inbound delivery you created for this order. Use the number provided for your group for this. Group 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 MRN 06NL12300000000015 06NL12300000000023 06NL12300000000031 06NL12300000000040 06NL12300000000058 06NL12300000000066 06NL12300000000074 06NL12300000000082 06NL12300000000090 06NL12300000000106 06NL12300000000114 06NL12300000000122 06NL12300000000130 06NL12300000000149 06NL12300000000157 06NL12300000000165 06NL12300000000173
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18 19 20 1.
06NL12300000000181 06NL12300000000190 06NL12300000000205 In the feeder system, create an order with sales document type NB for the American vendor T-GTSUS for 100 pieces of material T-BW03-##. Enter the document for purchasing organization 1000, purchasing group 001, and company code 1000. a) b) c) Choose Logistics ! Materials Management ! Purchasing ! Purchase Order ! Create ! Vendor/Supplying Plant Known. Enter T-GTSUS in the vendor field and confirm the entry with Enter: the Org. Data tab page opens at document header level. Enter purchasing organization 1000, purchasing group 001 and company code 1000. At document item level, add the material T-BW03-##, a purchase order quantity of 100, plant 1000, and storage location GTS1. Hint: If the item overview is not yet opened, select Expand Items . d) Create the purchase order by choosing Save.
2.
Now create an inbound delivery for your purchase order. Before doing this, enter at document header level on the Foreign Trade/Customs tab page the previous document type T1 and the MRN listed for your group in the table. Make a note of the inbound delivery document number: ___________________. a) Choose Logistics ! Logistics Execution ! Inbound Process ! Goods Receipt for Inbound Delivery ! Inbound Delivery ! Create ! Single Documents. Your purchase order from Step 1 is usually proposed as a default value. Accept the default value by choosing Enter. In the menu for the inbound delivery, choose Goto ! Header ! Foreign Trade/Customs. Choose the Preliminary Document tab page in the foreign trade data area. Enter T1 in the Previous Document Type field, and enter the MRN assigned to your group in the Preliminary Document Number field. Choose Back and create the inbound delivery by choosing Save.
b) c)
d)
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Task 2:
Search the SAP GTS system for the customs shipment that resulted from the transfer of your inbound delivery. Check the result of the message determination and the completeness of the data. Then send the arrival notification to the competent customs office. 1. Find the customs shipment for your inbound delivery in the SAP GTS system, and check whether the system proposes a transit declaration as a message to be issued (Communication tab page). a) b) c) d) e) In the SAP Customs Management area of the SAP GTS cockpit, choose the button Transit/Presentation. On the Monitoring tab page, choose Customs Shipments in the area Import . In the Reference Number field, enter the number of your inbound delivery from Step 1, and choose Execute . Select your document and choose Change Customs Shipment .
Choose the Communication tab page. The system should propose the message M0120. Hint: The icon indicates that the message has not yet been issued.
2.
Carry out an incompleteness check, fill in any missing data, and then send the message. The office of destination is the Main Customs Office Hamburg City. a) b) Select the message M0120 on the Communication tab page and choose Check Messages . The incompleteness log shows that the office number for the customs office of destination is missing (Message The trader identification number field is empty for document partner function customs office of destination.). Fill the Office of Destination field with the key DE004600. Select the message and choose Execute Message processed successfully, the icon is shown. . If the message is
c)
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Lesson Summary
You should now be able to: Describe the various steps in the transit procedure Discharge a T1 transit procedure from within SAP GTS using an arrival notification
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Lesson: Bonded Warehousing Procedure

Lesson Overview
As of SAP GTS 7.0 you can map a bonded warehouse in the system. This lesson will introduce you to this process, and you will discover how to receive in your bonded warehouse in SAP GTS goods receipts booked in your SAP R/3 or SAP ECC feeder system.
Lesson Objectives
After completing this lesson, you will be able to: Explain the bonded warehousing procedure Set up a bonded warehouse in SAP GTS Receive goods in a bonded warehouse in SAP GTS
Business Example
IDES Germany has in Hamburg a bonded warehouse of Type D for non-Community goods that are usually re-exported. Goods receipts from T1 transit procedures should therefore be transferred initially to the bonded warehouse procedure. The company would like to participate in ATLAS Import, process component bonded warehouse.
Bonded Warehouse Procedure

It is not always sensible to release non-Community goods for free circulation immediately on import (that is, to pay customs and other import duties). If the goods are earmarked for later re-exportation, or if it is unclear at the time of import into which customs status the goods will ultimately be placed, the bonded warehouse procedure, one of the customs procedures defined in the Community Customs Code, becomes an option. Like inward and outward processing, conversion and temporary importation, the bonded warehouse procedure is one of the customs procedures with economic impact. Most of these customs procedures, including the bonded warehouse procedure, are suspension systems. Thus, no import duties are generally levied in this procedure either.
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Figure 61: Structure of the Bonded Warehouse Procedure
A bonded warehouse is a place, authorized by the competent customs authority, where non-Community goods can be stored indefinitely under customs supervision without import duties being levied. Generally, a bonded warehouse is used to temporarily store goods earmarked for re-exportation, duty unpaid (transit function of bonded warehouse). However, the bonded warehouse procedure is also suitable for goods which are bought and held in reserves, to be released into the EC for free circulation only at a later point (credit function of bonded warehouses). The Community Customs Code distinguishes six kinds of bonded warehouse, divided into two groups: the public (warehouse types A, B and F) and the private (warehouse types C, D and E). For SAP GTS, the private bonded warehouse of type D is foremost in importance. In this warehouse type, non-Community goods (usually) are stored, duty unpaid, at an authorized location. The authorization of the bonded warehouse procedure also entails the authorization of the local clearance procedure (see the lesson Declaration of Arrivals). This enables inventory withdrawal without the direct involvement of a customs office. Warehouse type E differs from type D to the extent that the storage of duty unpaid goods does not need to occur at a place approved within the authorization process. The holder of the authorization may introduce the goods into his or her storage facilities, that is, to various places which are used - sometimes only temporarily (for example, vehicles) - to store goods. Note: Warehouses of Type E can be authorized in accordance with the regulations which apply for warehouses of Type D. You can map such warehouse types in SAP GTS as well.
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Following placement of non-Community goods into a bonded warehouse procedure - either in writing using a EC Single Administration Document or possibly electronically, for example, in the context of ATLAS - these goods are to be transported without delay to the authorized storage warehouses or storage facilities. The customs declaration can be made in a regular or simplified procedure. The warehouse keeper is obliged to maintain stock recording of all goods movements in timely fashion and to carry out stock-taking regularly (at least once per year). Besides storage of the goods, with prior approval, so-called typical processing is allowed within a bonded warehouse (such as bottling, packing, testing) as well as the limited, temporary removal of goods (for example, for presentation purposes). The bonded warehouse procedure ends for the stored goods with their placement into a new customs status, generally on re-exportation or release for free circulation. With a bonded warehouse of type D, which always entails the authorization of a local clearance procedure (see above), the holder of the authorization can release the stored goods into free circulation without the intervention of customs authorities. Note: You must calculate the import duties for the supplementary customs declaration for recording the following month yourself For this purpose you can use the customs duty calculation in SAP GTS.
Processing the Procedure in SAP GTS

In SAP Customs Management, SAP GTS gives you the option of processing the bonded warehousing procedure electronically with ATLAS. Written customs declarations for this procedure are possible in all EC member states. Apart from this, you can maintain stock records for your bonded warehouse in SAP GTS. The customs declaration in SAP Customs Management is the basis for registering for the bonded warehouse procedure. If your feeder system is an SAP R/3 or SAP ECC system, you can transfer the material document from a goods receipt posting related to an inbound delivery to SAP GTS, so as to create or have the system create the customs shipment with reference to the logistical process.
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Figure 62: Basic Process in SAP GTS
The inbound delivery to which the goods receipt posting refers controls whether receipt at the bonded warehouse is recorded as duty paid (Community goods) or duty unpaid (non-Community goods). The Previous Document Type field on the tab page Foreign Trade/Customs at document header level is crucial: if this field is empty, or if the previous document type T2 is entered for a T2 shipment procedure, new acquisitions will be recorded in SAP GTS as duty paid stock. The inbound delivery and the material document will not be transferred to SAP GTS in such cases. By contrast, if the previous document type T1 is given for a T1 shipping procedure, the material document is transferred, and, following the creation of a customs shipment for the material document, SAP GTS also takes the quantity received into the bonded warehouse as duty unpaid stock. If the inbound delivery also contains a MRN in the Previous Document Type field, it will itself also be transferred to SAP GTS. The corresponding customs shipment forms the basis for the arrival notification for discharging the transit procedure (see the lesson Shipping Procedure at Import). Whenever the previous document type is T1, SAP GTS records the data in the material document for goods receipt posting in the import worklist. You decide in each case when creating a customs shipment from this work list whether the goods concerned will be placed in a bonded warehousing procedure or some other customs procedure. However, in SAP GTS 7.0, you can also automate the creation of the customs shipment and the output of the corresponding message using Customizing settings. Note: Automated message output requires that the customs shipment is complete in the sense of the incompleteness check. Use the procedure for defaulting data to have the system complete field values.
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For the re-exportation of goods that are in a bonded warehouse in SAP GTS, you can also have customs shipments created automatically if you transfer the appropriate billing document from the SAP R/3 or SAP ECC system to SAP GTS. The procedure corresponds to that for the export procedure, which you were introduced to in the Lesson Export Declaration. Note: If your bonded warehouse contains both duty paid and duty unpaid stock, the system will at re-exportation always take duty unpaid stock out of storage first, and apply the first-in-first-out- (FIFO) principle in doing so. You decide whether a material document is transferred to SAP GTS in Customizing in the feeder system on the basis of the movement type of the inventory management. Choose Sales and Distribution ! Foreign Trade/Customs ! SAP Global Trade Services - Plug-In ! Control Data for Transfer to SAP Global Trade Services ! Configure Control Settings for Transfer. Then select the application level MM0C (Receipt/Import: Material Document) and choose the document types level in the dialogue structure. Create entries for all movement types relevant to your processes and set in each case the flag Call up SAP Customs Management Services. In the SAP GTS system, assign a customs document type to the movement types relevant to the transfer. Choose SAP Global Trade Services ! SAP Customs Management ! General Settings ! Document Structure ! Assignment of Document Types from Feeder Systems ! Assign Document Type at Feeder System Level or Assign Document Type at Feeder System Group Level.
Inventory Management in a Bonded Warehouse in SAP GTS

If you wish to use the bonded warehouse in SAP GTS, you must map the physically existing warehouse approved as a storage place in your authorization in the form of a key (Customs ID) not only in the feeder system, but in the SAP GTS system as well. You assign this Customs ID to one or more plant/storage location(s) in the feeder system. In the SAP GTS system, you link the Customs ID with one or more legal unit(s). Only goods movement postings that relate to this plant/storage location combination are essentially considered relevant for SAP GTS.
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Figure 63: Inventory Management in the Bonded Warehouse
Before you can use the bonded warehousing procedure in SAP GTS, you must also process all product masters that have arisen from the transfer of material masters from the feeder system. To do this, call up a product master, select the Special Customs Procedures tab page and fill in the appropriate Customs ID for your bonded warehouse. Flag the product as being relevant for the bonded warehouse procedure. Send this information to the feeder system (transaction /SAPSLL/PR_DISTR_SG). You also have the option of using a mass maintenance transaction (/SAPSLL/PR_DISTR_MS) for this step. Generally speaking, the SAP R/3 or SAP ECC feeder system will already contain material stock in the plants that are assigned to the Customs ID. You can transfer these to SAP GTS to carry them into the inventory management of the bonded warehouse. They are recorded there as duty paid stock. For this, use the /SAPSLL/BWHIDP_R3 transaction in the feeder system. Note: Generally, a bonded warehouse is used exclusively to store non-Community goods. However, if the customs status of the goods can be determined at any time, it is permissible to store both Community and non-Community goods in the same bonded warehouse (general storage). SAP Customs Management supports you in fulfilling legal requirements for stock recording by automatically updating warehouse inventories. In addition, you can use transactions to call up your bonded warehouse inventory, lists of inward and outward movements and lists of complete transactions as well as to process indefinite goods movements (for example, rebooking), stocktaking and scrapping transactions. You can find these transactions in the cockpit of SAP Customs Management on the Inventory Management tab page.
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Exercise 11: Transfer to Bonded Warehousing Procedure

Exercise Objectives
After completing this exercise, you will be able to: Submit in SAP Customs Management a customs declaration for transferring goods into the bonded warehousing procedure in the context of ATLAS
Business Example Task:

You have received a goods consignment from the USA, for which you have already received notification. Post the goods receipt for the inbound delivery and create the customs shipment for the customs declaration to place the goods in a bonded warehousing procedure from the import worklist in SAP GTS. 1. In the feeder system, post a goods receipt for the inbound delivery you created in the Lesson Shipping Procedure at Import. Add the quantity that has been put away (100 units). Using the document flow for the inbound delivery, determine the number of the material document that the feeder system created for documenting the goods receipt posting. Material document: ____________________ 3. Search for your material document in the import worklist of the SAP GTS system and create for the material document a customs shipment for a customs declaration to place the goods delivered in the bonded warehousing procedure. What is the customs status of the goods? To conclude, check the inventory of your material in the bonded warehouse GTS100. Can you see the new acquisition?
2.
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Solution 11: Transfer to Bonded Warehousing Procedure

Task:
You have received a goods consignment from the USA, for which you have already received notification. Post the goods receipt for the inbound delivery and create the customs shipment for the customs declaration to place the goods in a bonded warehousing procedure from the import worklist in SAP GTS. 1. In the feeder system, post a goods receipt for the inbound delivery you created in the Lesson Shipping Procedure at Import. Add the quantity that has been put away (100 units). a) Choose Logistics ! Logistics Execution ! Inbound Process ! Goods Receipt for Inbound Delivery ! Post Goods Receipt ! Inbound Delivery Individual Document. Enter the document number for your inbound delivery from Exercise 10 and choose Enter. Choose the Putaway tab page, and enter 100 in the Quantity field. Choose Post Goods Receipt.
b) c) d) 2.
Using the document flow for the inbound delivery, determine the number of the material document that the feeder system created for documenting the goods receipt posting. Material document: ____________________ a) In the menu of the initial screen of the transaction with which you posted the goods receipt in Step 1, choose Environment ! Document Flow. The last entry (GR Goods Receipt) contains the number of the material document.
b)
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3.
Search for your material document in the import worklist of the SAP GTS system and create for the material document a customs shipment for a customs declaration to place the goods delivered in the bonded warehousing procedure. What is the customs status of the goods? a) b) c) d) In the SAP Customs Management cockpit, choose the button Customs Processing - Import/Export. In the Document Editing area, assign the Foreign Trade Organization Germany (Foreign Trade Organization Germany). and then Bonded Warehousing Choose Enter Import with Worklist Procedure ! Simplified Customs Declaration Bonded Warehouse. In the Material Document field of the Feeder System Document Reference area, enter your document number from Step 2 and choose Execute : your material document appears in the worklist; the goods has a status of duty unpaid. Choose the button Customs Declaration and confirm you wish to create a customs declaration for the selected entry by answering Yes. The system will generate a customs shipment. Also confirm you wish to edit the customs declaration by answering Yes. Check the document and then leave it with Back .
e) f)
4.
To conclude, check the inventory of your material in the bonded warehouse GTS100. Can you see the new acquisition? a) b) c) Leave the work list and select the Inventory Management tab page. Select the entry Display Stock Overview .
Enter your material number T-BW03-## and choose Execute : the current acquisition is inventory-managed in the column marked Duty Unpaid. Optional: choose the button Inward/Outward Movement List to display the stock recording details.
d)
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Lesson Summary
You should now be able to: Explain the bonded warehousing procedure Set up a bonded warehouse in SAP GTS Receive goods in a bonded warehouse in SAP GTS
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Lesson: Forms of Import Control

Lesson Overview
The import of goods is also subject to control under foreign trade law. This lesson demonstrates how the services of SAP Compliance Management can help you map import control measures in the system.
Lesson Objectives
After completing this lesson, you will be able to: Describe forms of import control Use the embargo check service at import
Business Example
IDES Germany would like to import goods from a vendor in Liberia. However, the EC's partial embargo on Liberia (Council Regulation [EC] No. 234/2004) prohibits the import of certain products. To ensure that it does not accidentally violate this embargo regulation, the company decides, as a precautionary measure, to block all purchase orders from Liberian vendors for the time being.
SAP Compliance Management in the Import Process

Right from the purchase order creation stage of the purchasing process in the feeder system, you can use SAP Compliance Management to check whether the planned import is permitted and, if necessary, stop the order from being processed further. To do this, the system can check first whether the country of departure is affected by an embargo. If this is not the case, the system can check whether the vendor's name is on any boycott lists in other words, whether the vendor is affected by a personal embargo. In addition, the system performs a product check (if applicable); that is, whether the import is allowed, but dependent on a license from the authorities. You can use SAP Compliance Management to apply for any required licenses in good time and store them in the system as license masters.
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Figure 64: SAP Compliance Management in the Import Process
The three services in SAP Compliance Management embargo check, sanctioned party list screening, and product-related check (legal control) can all be activated separately. You therefore do not have to use all three check functions every time you import goods. For example, if you are not importing any goods with licensing requirements, the product-related check for goods receipts remains deactivated.
Embargos
The EC and the United States, like many other countries in the past, have placed a number of individual countries, political groups, and natural or legal persons under embargo. These embargos are often based on UN Security Council resolutions. An embargo prohibits trade with the state, group, or person in question. In many cases, capital transactions with and providing certain services to the state, group, or person in question are also prohibited. The financial assets of the affected party can be frozen.
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Figure 65: Embargos
The EC has three kinds of embargos: total embargos, partial embargos, and weapons embargos. A total embargo prohibits any kind of trade with the country in question. This type of embargo usually also includes services and financial transactions. In certain circumstances, this type of embargo does allow for the supply of humanitarian goods in individual cases and subject to authorization. The EC's only total embargo, that against Iraq, was lifted on July 7, 2003 (Regulation (EC) No 1210/2003). The United States, on the other hand, maintains a number of total embargos (at least virtual ones). The Export Administration Regulations (EAR) contain a list of the countries affected. A partial embargo prohibits trade in specific goods only. These goods are listed in the text of the regulation concerned (for example, Weapons that could be used for internal repression or for the purposes of terrorism). Partial embargos imposed by the EC and other states are intended for use against governments (Myanmar, Zimbabwe), parties involved in civil war (Liberia, Sierra Leone), and political and criminal groups (Taliban, Al-Qaida network). Weapons embargos, on the other hand, apply only to armaments. In the past, the EC has imposed weapons embargos on the Democratic Republic of the Congo, Libya, Rwanda, Somalia, and Sudan. In many cases, weapons embargos and partial embargos coexist, such as those against Liberia, Sierra Leone, and Zimbabwe. The United States has at least partially implemented the same Security Council resolutions and has therefore imposed similar partial embargos. Checks on business processes that apply information about embargos are carried out independently of other checks in SAP Compliance Management. Therefore, these checks have to be activated and configured separately. Because embargos do not usually apply globally, it is advisable to define specific legal regulations with a restricted area of application in Customizing.
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If some of your business partners are located in countries placed under embargo, there are various ways of checking purchasing or sales processes with these partners in SAP Compliance Management, depending on the legal situation. In the application menu, you configure the system accordingly: If a total embargo applies, you can simply flag the affected country as an embargo country (transaction /SAPSLL/CNTRY). Hint: When you use the embargo check service, you have to make an entry in this table for every potential trading country. However, you only need to flag countries that are actually under embargo in an additional row. If a partial embargo applies and it has been placed as a result of EC regulations or similar regulations in other countries, you have to link the corresponding legal regulation with the country code of the affected country (transaction /SAPSLL/CCCTRY). However, if the legal situation is the same you can also individually specify the countries with which trade is restricted by an embargo. Therefore, you assign combinations of country of departure and country of destination to a legal regulation (transaction /SAPSLL/CEEMB).
Figure 66: Embargos in SAP Compliance Management
You can analyze and display information on the embargo situations of individual business partners on the basis of these settings. Documents that have been blocked because of an embargo can only be released manually (transaction /SAPSLL/EMB_BLRL_IMP for import customs documents and /SAPSLL/EMB_BLRL_EXP for export customs documents). As of SAP GTS 7.0, you have the option of using a transaction that allows you to display the
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released customs documents in a list. This list also shows you which users released the customs documents (transaction /SAPSLL/REL_DOC_EMBI for import customs documents, transaction /SAPSLL/REL_DOC_EMBE for export customs documents).
Product-Related Import Controls

Within the framework of the EU's common trade policy, Community regulations contain some exceptions to the general principle that residents of the Community area may import goods to the area without a permit. Import restrictions may arise from EC regulations and possibly from additional national regulations. For example, in Germany, Community law is supplemented by the German Foreign Trade Administration Act and the German Foreign Trade Regulations. An annex to the German Foreign Trade Administration Act contains the import list, which uses the Combined Nomenclature (CN) to individually list all goods affected by restrictions.
Figure 67: Product-Related Import Controls: Goods Categories
The overriding goal of import controls, both in the EC and in non-EC countries, is to protect indigenous industries from the competition posed by imports from low-wage countries. Thus, imports of the following goods categories into the EC are currently either subject to a license or subject to control if they originate in specific third countries: Textiles and clothing Iron and steel products Shoes
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The competent national authority must authorize or control imports of these goods. In Germany, this task is performed by the Federal Office of Economics and Export Control ('Bundesamt fr Wirtschaft und Ausfuhrkontrolle' - BAFA). The BAFA regularly publishes details of application for import licenses and announcements containing details of the current legal situation. One example is the import of plain rolled (iron and steel) products (coils) with particular commodity codes. An import license is required if these goods originate in the Russian Federation. However, if the goods originate in the former Yugoslavian Republic of Macedonia, only a monitoring document is required. In both cases, the customs office checks that the import is allowed.
Figure 68: Import Control Documents (EC)
Import licenses and monitoring documents are issued according to an EC standard. They always have an expiry date and are restricted by goods type and quantity. The legal control service allows you to perform a product-related check to determine whether a product requires a license or has to be monitored. If a product requires a license, the SAP GTS system searches for any existing licenses and links these with the transaction. If there are no licenses, the SAP GTS system blocks the customs document. You can no longer post the goods receipt for the purchase order in the feeder system.
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Figure 69: Product-Related Checks in the Import Process
Import licenses and monitoring documents are stored and managed as licenses in SAP Compliance Management. If the check described above runs successfully, the system links the customs document and the license. The system can therefore continue processing the purchase order from the feeder system. A customs document that has been blocked by the SAP Compliance Management product-related check can be unblocked if a corresponding license master is assigned to it in SAP GTS. The system can then continue processing the purchase order from the feeder system.
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Exercise 12: Embargo Check

Exercise Objectives
After completing this exercise, you will be able to: Use the 'Embargo Check' service
Business Example
IDES Germany would like to import wooden crates for the transportation of pumps from a vendor in Liberia. However, the EC's partial embargo on Liberia (Council Regulation [EC] No. 234/2004) prohibits the import of certain products. To ensure that it does not accidentally violate this embargo regulation, the company decides, as a precautionary measure, to block all purchase orders from Liberian vendors for the time being, so that the department can check each transaction individually to see whether it is affected by an embargo.
Task:
Order wooden crates from a vendor in Liberia and check the system's behavior. Resolve how the system blocked the document. 1. In the feeder system, create a purchase order for 100 pieces of material PK-104 from vendor T-GTS100 for plant 1000. Order the material for purchasing organization 1000 and company code 1000. Purchasing group 001 is responsible. How does the system react when it is saving the document? Make a note of the document number: ____________________. Display the blocked customs document for your purchase order from Step 1. Find out the product's customs tariff number, and using the excerpt from the EC regulation, check whether it is affected by the partial embargo. Also display the check log for the customs document. Excerpt from Council Regulation [EC] No. 234/2004 of February 10, 2004 concerning certain restrictive measures in respect of Liberia (...) Article 6 (2) The direct or indirect import into the Community of all round logs and timber products originating in Liberia, as defined in Annex III, shall be prohibited. ANNEX III Round logs and timber products referred to in Article 2(2) (excerpt)
2.
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CN Code 4401 4402 4403 4404 4405 4406 4407 4408 4409 4410 4411 4412 4413 4414 4415 4416 4417
Product Description Fuel wood, in logs, in billets, in twigs, in faggots or in similar forms; (...) Wood charcoal (...) Wood in the rough, whether or not stripped of bark or sapwood, or roughly squared Hoopwood; split poles; piles, pickets and stakes of wood, (...) Wood wool; wood flour Railway or tramway sleepers (cross-ties of wood) Wood sawn or chipped lengthwise, (...) Sheets for veneering (...) Wood (including strips and friezes for parquet flooring, not assembled), (...) Particle board and similar board (...) Fibreboard of wood or other ligneous materials, (...) Plywood, veneered panels and similar laminated wood Densified wood, in blocks, plates, strips or profile shapes Wooden frames for paintings, photographs, mirrors or similar objects Packing cases, boxes, crates, drums and similar packings, (...) of wood Casks, barrels, vats, tubs and other coopers' products and parts thereof, of wood, including staves Tools, tool bodies, tool handles, broom or brush bodies and handles, of wood; boot or shoe lasts and trees, of wood
3.
Call up the product master of the material PK-104 and determine the customs tariff number according to the Electronic Customs Tariff. Compare the first four digits with the four-digit numbers in the embargo regulation extracts printed above. Should the document be blocked?
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Solution 12: Embargo Check

Task:
Order wooden crates from a vendor in Liberia and check the system's behavior. Resolve how the system blocked the document. 1. In the feeder system, create a purchase order for 100 pieces of material PK-104 from vendor T-GTS100 for plant 1000. Order the material for purchasing organization 1000 and company code 1000. Purchasing group 001 is responsible. How does the system react when it is saving the document? Make a note of the document number: ____________________. a) b) c) Choose Logistics ! Materials Management ! Purchasing ! Purchasing Order ! Create ! Vendor/Supplying Plant Known. In the Vendor field, enter T-GTS100. At document header level, choose the Org.data tab page. Enter purchasing organization 1000, purchasing group 001, and company code 1000. Choose Enter. At document header level, now enter material PK-104, a purchase order quantity of 100, and plant 1000. Choose Enter. Create the purchase order by choosing Save. The system issues a message to indicate that SAP GTS has blocked the document as a result of an embargo. Choose Enter, and make a note of the document number.
d) e)
2.
Display the blocked customs document for your purchase order from Step 1. Find out the product's customs tariff number, and using the excerpt from the EC regulation, check whether it is affected by the partial embargo. Also display the check log for the customs document. Excerpt from Council Regulation [EC] No. 234/2004 of February 10, 2004 concerning certain restrictive measures in respect of Liberia (...) Article 6 (2) The direct or indirect import into the Community of all round logs and timber products originating in Liberia, as defined in Annex III, shall be prohibited. ANNEX III Round logs and timber products referred to in Article 2(2) (excerpt) CN Code 4401 4402 Product Description Fuel wood, in logs, in billets, in twigs, in faggots or in similar forms; (...) Wood charcoal (...) Continued on next page
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4403 4404 4405 4406 4407 4408 4409 4410 4411 4412 4413 4414 4415 4416 4417
Wood in the rough, whether or not stripped of bark or sapwood, or roughly squared Hoopwood; split poles; piles, pickets and stakes of wood, (...) Wood wool; wood flour Railway or tramway sleepers (cross-ties of wood) Wood sawn or chipped lengthwise, (...) Sheets for veneering (...) Wood (including strips and friezes for parquet flooring, not assembled), (...) Particle board and similar board (...) Fibreboard of wood or other ligneous materials, (...) Plywood, veneered panels and similar laminated wood Densified wood, in blocks, plates, strips or profile shapes Wooden frames for paintings, photographs, mirrors or similar objects Packing cases, boxes, crates, drums and similar packings, (...) of wood Casks, barrels, vats, tubs and other coopers' products and parts thereof, of wood, including staves Tools, tool bodies, tool handles, broom or brush bodies and handles, of wood; boot or shoe lasts and trees, of wood
a) b) c)
In the SAP Compliance Management area of the SAP GTS cockpit, choose Legal Control - Import. In the Monitoring area, choose Display Blocked Documents .
In the Reference Number field of the Document Data in Feeder System area, enter the document number for your purchase order from Step 1 and choose Execute . The system displays a list containing the blocked document. Select this to view the original entry and choose Display Customs Document document. Choose Display Document Check Log and display the details. The icon indicates that the system found a blocking reason when Error performing the embargo check. It identified Liberia as an embargo country in legal regulation EGEMB.
d)
e)
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3.
Call up the product master of the material PK-104 and determine the customs tariff number according to the Electronic Customs Tariff. Compare the first four digits with the four-digit numbers in the embargo regulation extracts printed above. Should the document be blocked? a) b) c) d) In the SAP Customs Management area of the SAP GTS cockpit, choose the button Master Data. In the Customs Products area, choose the symbol Display Products Enter the logical system group GROUP_GTS and the product number PK-104 and choose Execute . Choose the Classification tab page. The product PK-104 has the customs tariff number 44151010000. The transaction is therefore affected by the embargo regulation; the document was blocked correctly. .
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Lesson Summary
You should now be able to: Describe forms of import control Use the embargo check service at import
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Unit Summary
Unit Summary
You should now be able to: Describe how customs tariffs are structured Create commodity codes in SAP GTS Explain customizing the classification function in SAP Customs Management Describe the steps in the import process Explain the basic principle of customs value calculation Describe the various steps in the transit procedure Discharge a T1 transit procedure from within SAP GTS using an arrival notification Explain the bonded warehousing procedure Set up a bonded warehouse in SAP GTS Receive goods in a bonded warehouse in SAP GTS Describe forms of import control Use the embargo check service at import
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Test Your Knowledge
Test Your Knowledge

1. What elements does a customs tariff number in an EC member country consist of?
! ! ! ! ! 2.
A B C D E
Harmonized System Combined Nomenclature TARIC EZT Additional national numbers
Which of the following entries is not a simplified customs procedure?

! ! ! ! 3.
A B C D
Simplified declaration Summarized declaration Local clearance notification Incomplete declaration
Why do you perform a customs value calculation in SAP Customs Management?
4.
What does the abbreviation NCTS stand for?
5.
What is the function of product-related import control measures in many cases?
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Answers
1. What elements does a customs tariff number in an EC member country consist of? Answer: A, B, C, E The member countries add national numbers (which encode information such as tax rates) to the 10-digit Common Customs Tariff, which is based on the HS and CN. The EZT is the German adaptation of the EC's Common Customs Tariff. 2. Which of the following entries is not a simplified customs procedure? Answer: B A summarized declaration is not a simplified procedure, but usually precedes an import duty procedure. 3. Why do you perform a customs value calculation in SAP Customs Management? Answer: The customs value calculation in a customs shipment forms the basis for the declaration of value in conjunction with the import declaration within ATLAS. 4. What does the abbreviation NCTS stand for? Answer: The abbreviation NCTS stands for New Computerized Transit System. 5. What is the function of product-related import control measures in many cases? Answer: Import restrictions are designed, in many cases, to protect the local economy from competition from low-wage countries.
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Unit 4
Origin of Goods and Preferences
Unit Overview
Preference law is a key competitive factor in many industries. This unit familiarizes you with preference determination as a means of improving your competitive situation.
Unit Objectives
After completing this unit, you will be able to: Define the term customs tariff preference and name its legal foundations Explain the difference between originating goods and non-originating goods Describe the significance of rules of origin Describe the process flow for preference determination in SAP GTS Perform preference determination in SAP GTS Explain how vendor declarations are used in the system
Unit Contents
Lesson: Originating and Non-Originating Goods ...........................180 Lesson: Using Preference Determination in the Export Process .........189 Exercise 13: Preference Determination .................................195
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Lesson: Originating and Non-Originating Goods

Lesson Overview
Preference law is perhaps the most complicated area of customs law. If you claim customs tariff preferences or intend to give your customers the option of importing your goods at a preferential customs duty rate, you must have at least a basic knowledge of the rules that are used to determine a product's origin. This lesson explains the difference between preferential origin and non-preferential origin.
Lesson Objectives
After completing this lesson, you will be able to: Define the term customs tariff preference and name its legal foundations Explain the difference between originating goods and non-originating goods Describe the significance of rules of origin
Business Example
IDES Germany regularly delivers a specific pump to customers in Switzerland and other countries with which the EC has concluded preference agreements. In the future, it intends to check whether these customers can import the pump, as EC originating goods, at a greatly reduced rate of duty. It also wants to check whether it can issue appropriate preference documents.
Customs Tariff Preferences as a Competitive Advantage

The term customs tariff preference refers to the preferential treatment that a product receives when import duty is being levied. This usually consists of a greatly reduced customs duty rate, often 0% for industrial products (preferential customs duty rate). If importers cannot claim preferential treatment, they pay the standard customs duty rate according to the customs tariff, unless other tariff reductions can be claimed.
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Figure 70: Preference Agreements - Examples
Customs tariff preferences are based on either bilateral or multilateral agreements (preference agreements) or autonomous preference measures that a state, or in the case of the EC a community of states, unilaterally applies, mainly for developmental reasons. For example, under the Generalized System of Preferences (GSP), the EC has unilaterally granted a number of countries in the Southern Hemisphere customs tariff preferences for specific goods or categories of goods (Regulation (EC) No. 2501/2001). If there are no preference agreements or appropriate unilateral measures, or importers cannot provide evidence that they are authorized to claim customs tariff preferences, the standard duty rate has to be paid when goods are being imported, and this is often a substantial amount. As import duties can considerably increase the purchase price of goods, importers will be thinking about the option of taking advantage of customs tariff preferences when they are selecting a vendor in another country. For this reason, it is recommended that exporters examine the situation with regard to customs law in advance and, if necessary, provide proof of origin when goods are being exported to ensure that customers can claim customs tariff preferences when the goods are being imported. This gives exporters a competitive advantage over rivals that cannot provide proof of origin. In many cases, customs tariff preferences are based on free trade agreements: in the North American Free Trade Agreement (NAFTA), the USA, Canada, and Mexico have granted each other reduced customs duty rates. The EC has entered into free trade agreements with a number of countries, including the EFTA states, Chile, Mexico, and South Africa. There are association agreements with other countries, which serve long-term aims extending beyond those of free trade agreements. Examples include the Euro-Mediterranean Association Agreements
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with Israel, Jordan, Lebanon, Morocco, Tunisia, as well as the West Bank and the Gaza Strip. There are also special import duty regulations for some areas (Faroe Islands, Ceuta, and Melilla). Customs unions are unlike free trade zones in that they do not apply domestic customs duties and they have a common customs tariff for third countries. The member countries of a customs union therefore form a common customs territory, such as Turkey and the EC. The European Economic Area (EEA) Agreement of January 1, 1994 led to further economic convergence between EC and EFTA member states. No customs duties are levied for the import of industrial products. A reduction of customs duties on agricultural products is being strived for. In SAP Risk Management, you can define legal regulations for all the preference agreements that are relevant to your export processes. You assign these to Legal Code 06 (Preference Law).
Preference Documents
The granting of customs tariff preferences at import is dependent on the presentation of specific documents that are defined in the appropriate preference agreements. These documents are usually issued on specific forms by the national customs authorities.
Figure 71: Preference Documents - Examples
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In the EC's preference agreements with third countries, the EUR 1 Certificate of Origin is designated as a preference document. For goods movement between the EC and Turkey, a special form - the A. TR certificate - is used. A specific certificate of origin, the NAFTA Certificate of Origin, CF434, is required within the NAFTA countries. The EC's preference agreements with third countries also provide for simplified preference documents. If an exporter is an approved exporter in a simplified procedure, he or she can submit a declaration of origin on the invoice, using the prescribed wording, for consignments of goods below a specific value defined in the agreement. Form EUR 2 is used as a simplified preference document for postal consignments of goods up to a specific value between the Community and Algeria and Syria. When goods are being imported from countries that are beneficiaries of autonomous measures of the Community, either a Certificate of Origin Form A (GSP) or a EUR 1 Certificate of Origin is required as a preference document. Since the central topic in this unit, preference determination, is not used for unilateral measures, this lesson does not discuss these measures any further. SAP GTS provides movement certificates and the NAFTA Certificate of Origin as message types that you can print out.
Originating Goods
The rules of origin in the respective preference agreements stipulate in detail the conditions a product must meet to qualify as an originating product for the purpose of preference law. In the EC's agreements with third countries, an originating product of the Community is a product that: Has been wholly obtained or produced in the Community Has been produced in the community, using materials not wholly obtained or produced there, provided that these materials have been sufficiently worked or processed.
In the NAFTA, the first definition is essentially the same as Criterion A, and the second definition, Criterion B.
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Figure 72: Originating Goods
Customs tariff preferences are granted only to products that originate in the countries to which the agreement applies. For example, goods being imported into a NAFTA signatory state must originate in one of the other two signatory states if the preferential customs duty rate is to be applied at import. Evidence of preferential origin also has to be provided at import. Since the first definition (wholly obtained or produced) refers to all the components of the final product, it applies almost solely to agricultural, forestry, and fishery products. The same applies to Criterion A in the NAFTA. However, when determining the originating status of industrial products, the second definition or Criterion B can be applied in most cases. The EC's agreements with third countries contain extensive processing lists that specifically define which forms of processing or working of non-preferential materials are considered sufficient for the purpose of the definition. In the NAFTA, Annex 401 performs this function.
Rules of Origin
The rules of origin in the preference agreements included in this training course stipulate in detail, which forms of working or processing of non-originating materials are sufficient in order that the final product can obtain originating status.
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Figure 73: Rules of Origin
Rules of origin refer to headings or subheadings in the Harmonized System (HS, see Chapter Import Processes) and can be divided (largely irrespective of the agreement) into three basic categories: Change of heading/tariff shift: The final product must belong to a different chapter or heading from the non-originating materials used in its production. Also, rules often stipulate the use of materials in a specific heading. Value clauses: The value of non-originating materials must not exceed a specified proportion of the ex-works price of the final product (EC preference agreements with third countries), or the minimum proportion of materials is prescribed (NAFTA). Specific working or processing procedures: The respective rule prescribes a specific procedure (for example, sanding, cleaving, refinement) to be performed with or on the materials.
These three basic rules are often combined. Specifications on changes of heading/tariff shifts are often combined with a value clause. Non-originating materials must both belong to a different chapter or heading from the final product and remain below a specific proportion of the ex-works price of the final product. Value clauses are also combined with specific requirements with regard to the manufacturing process. In SAP Risk Management, the basic rules of origin are defined as preference procedures. The figure below shows an excerpt from the current edition of Annex II to Protocol 4 of the EEA Agreement (List of working or processing required to be carried out on non-originating materials in order that the product manufactured can obtain originating status). This protocol contains the rules of origin that apply to the movement of goods in the EEA.
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Figure 74: EEA - Example: HS Heading 8413
The first column of the processing list contains the HS heading or HS chapter of the final product for which evidence of preferential origin status is to be provided. The second column describes the product in more detail. As in the above example, there is often an ex before the heading or chapter to make it clear that the rules specified in columns three and four apply only to the manufacture of the products in column two belonging to the heading listed in column one. In the example, the rules listed in columns three and four therefore apply only to the rotary positive displacement pumps from heading 8413 (pumps for liquids, liquid elevators, parts thereof), but not to other types of pumps that come under heading 8413. The rules shown in columns three and four always apply to non-originating materials only. If as in the above example the two columns contain a rule, the exporter can choose between one of the two rules. With the rotary positive displacement pumps in heading 8413, you therefore have to check that all the non-originating materials used in production fall under a different heading from 8413 and also that the value of all the materials used does not exceed 40% of the ex-works price of the pump. Alternatively, materials in heading 8413 can be used if the value of all the non-originating materials does not exceed 25% of the ex-works price of the pump. The pump can only be exported as an originating product of an EEA member country to another member country if at least one of the two rules applies. The EUR 1 Certificate of Origin, or a declaration of origin on the invoice, can be used as proof of origin. Similar rules of origin apply within the NAFTA countries in cases where products being exported have not been wholly obtained or produced within these countries. The rules listed in Annex 401 of the agreement (Specific Rules of Origin) always refer to the HS subheading of the final product for which the exporter wishes to prove preferential origin status.
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Figure 75: NAFTA - Example: HS Subheading 8413.60
A tariff shift, which is similar to a change of heading, is usually required for all non-originating materials. In the example of the rotary positive displacement pumps in subheading 8413.60, the exporter has to check that the non-originating materials do not fall under heading 8413, the heading for the final product. If these materials do not fall under heading 8413, the pump can be exported to another NAFTA signatory country as a NAFTA originating product. However, NAFTA also applies value clauses that can usually be checked as an alternative to a tarif shift if non-originating materials fall under certain subheadings that are in the same heading as the final product. In the above example, non-preferential materials in subheadings 8413.91 and 8413.92 can be used in the production of the pump if the total value of all originating materials (regional value content) is not less than 60% of the transaction value of the final product or not less than 50% of the net value of the final product. (The net value is calculated from the gross invoice price, minus costs specified in the agreement arising in connection with the sale of the product, including charges and costs for sales and distribution and marketing). Value clauses alone are rare in the NAFTA. A de-minimis provision generally applies, which a permits a final product to contain up to seven percent of non-originating materials without losing its originating status. Criterion C is used when issuing a NAFTA Certificate of Origin if a product has been produced entirely in the NAFTA territory, using only originating materials. All the materials must already have been verified as originating materials. It is possible to map the NAFTA rules of origin in SAP Risk Management as of SAP GTS 7.0.
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Lesson Summary
You should now be able to: Define the term customs tariff preference and name its legal foundations Explain the difference between originating goods and non-originating goods Describe the significance of rules of origin
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Lesson: Using Preference Determination in the Export Process

Lesson Overview
The previous lesson introduced you to the legal background of preference determination in SAP GTS. This lesson explains how you can use this function in the export process. It also describes how you can obtain and manage vendor declarations in SAP Risk Management if required.
Lesson Objectives
After completing this lesson, you will be able to: Describe the process flow for preference determination in SAP GTS Perform preference determination in SAP GTS Explain how vendor declarations are used in the system
Business Example
After checking the relevant agreements and implementing them in SAP GTS, your company, IDES Germany, now wants to perform preference determination for its shipments to Norway.
Process Flow
Whenever you are performing preference determination for a product in SAP Risk Management, the system checks a specific legal regulation (a preference agreement) to find out if, and under which conditions, this product can be sold as an originating product of the exporting country. These checks can only be performed for products that have a bill of material. As of SAP GTS 7.0, a preference determination for configurable materials is also possible.
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Figure 76: Process Flow for Preference Determination
To perform preference determination, the system needs the product's HS heading or subheading. The product must therefore have been classified first. Using the heading or subheading, the system determines the relevant rule(s) of origin from the preference agreement on which preference determination is to be based. It then breaks the product's bill of material down to identify the non-originating materials and apply the rules of origin to these materials. In the system, non-originating materials are all components in the bill of material that according to the product master are externally procured or of mixed origin, and that do not have a valid vendor declaration, or only have a negative vendor declaration. With a vendor declaration, exporters usually certify that the products they are delivering are originating products in relation to a specific preference agreement. The system checks the product master record to find out whether a vendor declaration exists (see below). The product masters of the materials must be classified to ensure that the system can find out if there is a change of heading or tariff shift. If the relevant rule of origin contains a value clause, the system calculates an ex-works price for the final product. If the product is sold for no less that this price to a customer in the country that has signed the agreement, it is considered an originating product and can be imported at the preferential customs duty rate provided that appropriate evidence is given. If the change of heading or specific production procedures have been checked and the product meets the conditions for originating status, the system sets a preference indicator in the product master record, and if there are any value clauses, it enters the minimum ex-works price established during preference determination.
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Vendor Declarations
In a vendor declaration, a vendor makes a statement about the origin of delivered goods in relation to a specific preference agreement. The requesting exporter uses this declaration as a previous document for the issue of a preference document, such as an EUR 1 Certificate of Origin. You can issue vendor declarations for products with or without preferential origin. If the delivered product is not an originating product, the vendor can document specific working or processing steps in the declaration. In a subsequent production process, these could possibly be taken into account as evidence of preferential origin. Vendor declarations without preferential origin are particularly important in the textile industry.
Figure 77: Management of Vendor Declarations
You can issue vendor declarations as individual or long-term vendor declarations for both originating and non-originating goods. Long-term declarations are valid for up to one year. SAP Risk Management caters only to long-term vendor declarations. You can use the functions in SAP Risk Management to request and manage long-term vendor declarations for your materials or trading goods. The system contains a worklist with purchasing documents and goods receipt postings to help you select vendors. If a vendor does not respond to your first request for a vendor declaration, you can define further dunning levels to request the declaration again. The system saves vendor declarations that are received and combines (aggregates) them at product master level. If two vendors make different statements about the origin of one of the products they have delivered, the system
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connects the negative statement (no preferential origin) to the product master. The product is therefore included as a non-originating material in preference determination. You can use the result of preference determination to issue your own vendor declarations for your customers (vendor declaration for customer's purposes). Hint: Before obtaining vendor declarations, it is advisable to perform preference determination to find out whether the final product already has originating status as a result of the value added in your own company.
Preference Indicator
If preference determination establishes that a product is eligible for preferential treatment, the system sets a preference indicator in the master record of the final product and, if necessary, a minimum ex-works price. If a sales document or billing document is then transferred from the feeder system, the SAP GTS system checks whether preference determination has already been performed for the final product. If the minimum ex-works price in the product master is lower than the actual ex-works price of the goods in the document, the appropriate document item receives a preference indicator.
Figure 78: Preference Indicator
The preference indicator specifies whether you can issue a preference document from the feeder system or from SAP GTS. If the comparison of the preference determination result with the actual ex-works price reveals that the actual ex-works price is too low to claim preferential origin status for the goods being
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exported, you can use the determination details to check for which non-originating materials, if any, it is worth requesting a vendor declaration. If vendors confirm that their products have preferential origin status, the total value of non-originating materials will be lower in future preference determinations and the minimum ex-works price of the final product will also be lower. Note: SAP Note No. 829932 describes the system requirements for transferring the preference indicator from SAP GTS to the SAP R/3 or SAP ECC feeder system.
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Exercise 13: Preference Determination

Exercise Objectives
After completing this exercise, you will be able to: Perform preference determination in SAP GTS
Business Example
Before exporting one of your company's pumps to a customer in Norway, you need to perform preference determination for this product.
Task:
Transfer the bill of material for the pump of material number T-MS-## from the feeder system to SAP GTS and perform a preference determination in the SAP GTS system. Then, in the feeder system, create an order for a pump for your Norwegian customer 2503. Can the pump be exported as an EC-originating product in relation to the EC's preference agreement with other EEA member states? 1. Transfer the bill of material of material T-MS-## from the feeder system to the SAP GTS system. The production plant is plant 1000. Hint: You can find this transaction in the cockpit for SAP GTS functions on the Master Data tab page. 2. In the SAP GTS system, perform plant-based preference determination for the pump T-MS-##, based on the EC's preference agreement with EEA member countries. You are delivering the pump from plant 1000. What is the result in the system? Hint: Find the preference determination function in the SAP Risk Management cockpit by choosing Preference Processing. 3. In the feeder system, create an order with sales document type TA for customer 2503. Create the order for one piece of material T-MS-##. You enter the document for sales organization 1000, distribution channel 10, and division 00. Check the actual sales price of the pump. Is this above the minimum ex-works price that SAP GTS calculated for the product? Make a note of the document number: ____________
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4.
Call up the document to change it and check whether you can export the pump to Norway as an EC-originating product. Hint: The preference indicator at document item level is on the Sales A tab page.
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Solution 13: Preference Determination

Task:
Transfer the bill of material for the pump of material number T-MS-## from the feeder system to SAP GTS and perform a preference determination in the SAP GTS system. Then, in the feeder system, create an order for a pump for your Norwegian customer 2503. Can the pump be exported as an EC-originating product in relation to the EC's preference agreement with other EEA member states? 1. Transfer the bill of material of material T-MS-## from the feeder system to the SAP GTS system. The production plant is plant 1000. Hint: You can find this transaction in the cockpit for SAP GTS functions on the Master Data tab page. a) b) c) In the SAP GTS cockpit, choose the Master Data tab page. In the Initial Transfer of Master Data to SAP GTS area, choose the entry Transfer Bills of Material . Enter the material T-MS-## and the plant 1000 and choose Execute . You are issued a log of the transfer.
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2.
In the SAP GTS system, perform plant-based preference determination for the pump T-MS-##, based on the EC's preference agreement with EEA member countries. You are delivering the pump from plant 1000. What is the result in the system? Hint: Find the preference determination function in the SAP Risk Management cockpit by choosing Preference Processing. a) b) c) In the SAP Risk Management area of the SAP GTS cockpit, choose Preference Processing. Select the entry Perform Preference Determination .
Enter the logical system group GROUP_GTS and your product T-MS-## and select the plant-based preference determination in the Model field (Plant-based Preference Model). On the Model tab page, enter plant 1000 and choose Execute . In the dialog structure on the left, select product T-MS-## and choose the Logs tab page. Choose the Bill of Material Logs tab page. The system has assigned the preference determination 40 (Determined - Affected by Price). Select the entry in the Preference Data area and choose Details The pump's minimum ex-works price is 2410.38 Euro. .
d) e) f) 3.
In the feeder system, create an order with sales document type TA for customer 2503. Create the order for one piece of material T-MS-##. You enter the document for sales organization 1000, distribution channel 10, and
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division 00. Check the actual sales price of the pump. Is this above the minimum ex-works price that SAP GTS calculated for the product? Make a note of the document number: ____________ a) b) c) Choose Logistics ! Sales and Distribution ! Sales ! Order ! Create. Enter order type TA, sales organization 1000, distribution channel 10, and division 00. Choose Enter. Enter customer 2503 as the sold-to party, and add purchase order number ##. Then, enter material T-MS-## and a quantity of 1. Confirm the entries with Enter. On the next screen, the system proposes a delivery date for the pump. In the Delivery Proposal area, choose the icon Copy . Select the document item and choose Item conditions. : The pump is sold to the Norwegian customer for 2600.00 Euro. Thus, the actual sales price exceeds the minimum ex-works price according to the preference determination. Create the order by saving.
d) e)
f) 4.
Call up the document to change it and check whether you can export the pump to Norway as an EC-originating product. Hint: The preference indicator at document item level is on the Sales A tab page. a) b) c) Choose Logistics ! Sales and Distribution ! Sales ! Order ! Change. Enter the document number from Step 3 and choose Enter. In the menu, choose Goto ! Item ! Sales A. The system has set the Preference indicator, so the pump can be exported to Norway as an EC-originating product.
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Lesson Summary
You should now be able to: Describe the process flow for preference determination in SAP GTS Perform preference determination in SAP GTS Explain how vendor declarations are used in the system
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Unit Summary
Unit Summary
You should now be able to: Define the term customs tariff preference and name its legal foundations Explain the difference between originating goods and non-originating goods Describe the significance of rules of origin Describe the process flow for preference determination in SAP GTS Perform preference determination in SAP GTS Explain how vendor declarations are used in the system
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Test Your Knowledge
Test Your Knowledge

1. Which of the listed documents are preference documents?
! ! ! ! ! 2.
A B C D E
Declaration of origin on the invoice NAFTA Certificate of Origin EUR 1 Certificate of Origin Movement Certificate A.TR.1 Chamber of Industry and Commerce Certificate of Origin
You have to obtain vendor declarations for materials before a preference document can be issued for the final product.
Determine whether this statement is true or false.
! !
True False
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Answers
1. Which of the listed documents are preference documents? Answer: A, B, C, D A certificate of origin issued by a Chamber of Industry and Commerce or other professional association is used as evidence of non-originating status. 2. You have to obtain vendor declarations for materials before a preference document can be issued for the final product. Answer: False It is only advisable to obtain vendor declarations if preference determination reveals that value clauses in rules of origin are not being fulfilled in the production process, because the value added in your own company is not sufficient. If purchased materials are included as originating products in preference determination, you must have an appropriate vendor declaration as evidence. If, on the other hand, a full (100%) change of heading is required and the check reveals that all non-originating materials are in a different HS heading from the final product, a vendor declaration is not necessary.
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Unit 5
Sanctioned Party List Screening
Unit Overview
Boycott lists that are attached as annexes to regulations are not just becoming increasingly important in foreign trade. This unit demonstrates the options offered by SAP Compliance Management for comparing business partner data with entries in boycott lists.
Unit Objectives
After completing this unit, you will be able to: Explain the legal background of sanctioned party list screening Interpret an SPL master record Describe the process flow for sanctioned party list screening in SAP GTS Perform sanctioned party list screening in the system
Unit Contents
Lesson: Boycott Lists...........................................................206 Exercise 14: SPL Master Records ....................................... 211 Lesson: Performing Sanctioned Party List Screening .....................214 Exercise 15: Sanctioned Party List Screening in Sales and Distribution...................................................................219
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Lesson: Boycott Lists

Lesson Overview
Using the sanctioned party list screening service, you can ensure that you do not maintain trade relations with persons or organizations on boycott lists in various states or communities of states. This lesson will familiarize you with the legal background of sanctioned party list screening in SAP GTS and the master data required to use this service.
Lesson Objectives
After completing this lesson, you will be able to: Explain the legal background of sanctioned party list screening Interpret an SPL master record
Business Example
In the future, your company, IDES Germany, intends to check whether each business partner is on a boycott list each time a purchasing or sales transaction is performed.
Legal Background
Boycott lists which target natural and legal persons and are attached as annexes to various regulations perform a similar function to embargos.
Figure 79: Boycott Lists in the EC
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In the aftermath of September 11, 2001, the EC implemented UN Security Council resolutions No. 1373 (2001) and No. 1390 (2002): Council Regulation (EC) No. 2580/2001 on specific measures directed against certain persons and entities with a view to combating terrorism Council Regulation (EC) No. 881/2002 imposing certain specific restrictive measures directed against certain persons and entities associated with Osama bin Laden, the Al-Qaida network, and the Taliban
Both regulations are intended to ensure that all the assets and financial resources of the affected persons and organizations are frozen. They are also the basis of a ban on providing the affected persons and organizations with such assets or resources and associated services. Since the term financial resources encompasses goods of any kind, business relationships with the affected persons and organizations are effectively banned. The regulations therefore apply to imports and exports in equal measure, but also to domestic trade. Annex I of Council Regulation (EC) No 881/2002 contains a name list that is based on a Security Council list, which is updated on a regular basis. The list attached to the regulation is also changed and extended regularly. The Council Decision of December 12, 2002, contains a list of all persons, groups, and organizations affected by Council Regulation (EC) No 2580/2001.
Figure 80: Boycott Lists in the United States
Similar lists have existed in the United States for quite some time. The Office of Foreign Assets Control (OFAC) manages the Specially Designated Nationals (SDN) List. OFAC is a department of the U.S. Department of Treasury, and is responsible for the use and implementation of economic and trade sanctions against specific countries, terrorist organizations, and the international drugs trade. This list also places sanctions on business relationships with persons and organizations that have been accused of violating the ban on proliferating weapons
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of mass destruction. Trade with SDNs is subject to high financial penalties and, possibly, a long prison sentence. Assets of and incoming payments to SDNs have to be frozen and reported to the OFAC. The Denied Persons List (DPL) is another important U.S. boycott list. It is published by the Bureau of Export Administration (BXA), a department of the U.S. Department of Commerce. The DNP is part of the BXA's Export Enforcement Program and is intended to prevent or restrict exports from the United States to specific persons and companies. The Export Administration Regulations are the legal basis of this form of trade restriction (see Export Processes). As a direct response to September 11, 2001, the U.S. government passed the USA Patriot Act (Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism) in October 2001. This act is primarily intended to prevent money laundering and financial support of terrorist organizations. This obliges financial institutions in particular to compare the names and addresses of their clients with those on the SDN list.
Boycott List Entries as Master Data

In SAP Compliance Management, entries in the boycott list are managed as so-called sanctioned party list master records (SPL master records). SPL master records contain all the data disclosed for a natural or legal person in the boycott lists (name, any addresses, nationalities, and identification card numbers). In the various check scenarios in this service, the system compares these SPL master records to the respective business partner's address data.
Figure 81: Sanctioned Party List Master Records
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As with all the other SAP GTS services, sanctioned party list screening is always based on a specific legal regulation. In the example shown, Council Regulation (EC) No. 881/2002 imposing restrictive measures against the Al Qaida network and others has been defined as a legal regulation in the system and activated for sanctioned party list screening. You can use Customizing settings to map typical structures in the system, such as sorting methods for different versions of the same name or false names. These versions are often linked by texts such as also known as. This allows you to group a number of pseudonyms for one person in the same SPL master record. To lessen the system load and to avoid too many false alarms, you also set percentages for the minimum level of match between business partner data and SPL master records in Customizing. If you want to use sanctioned party list screening in SAP Compliance Management, you have to ensure that the natural or legal persons in a boycott list that is relevant to your company are stored as SPL master records in your system.
Figure 82: Transferring Boycott List Entries
You can obtain full lists in XML format from data providers, and upload them into your SAP GTS system. This automatically generates the SPL master records. However, you can also manually enter boycott lists in the system, either in their entirety or in part. You can manually change master records that have been created automatically, or add manually created master records to them. All authorities update their boycott lists at regular intervals and usually add entries to them.
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Exercise 14: SPL Master Records

Exercise Objectives
After completing this exercise, you will be able to: Display an SPL master record
Business Example
You have obtained boycott list entries from a data provider and uploaded them into your SAP GTS system. Now you want to check one of the master records.
Task:
Display one of the SPL master records in the SAP GTS system, and check the data it contains. 1. In the SAP GTS cockpit, display SPL master record number 1. Enter legal regulation EGTER (European Community Regulations for Combating Terrorism) and list type DPLEU(EU Boycott Lists). The data provider is the Federal Gazette (Bundesanzeiger) (SAP business partner number ANZEIGER). Which authority is monitoring the boycott on the person listed? What does the reference type AKA mean?
2.
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Solution 14: SPL Master Records

Task:
Display one of the SPL master records in the SAP GTS system, and check the data it contains. 1. In the SAP GTS cockpit, display SPL master record number 1. Enter legal regulation EGTER (European Community Regulations for Combating Terrorism) and list type DPLEU(EU Boycott Lists). The data provider is the Federal Gazette (Bundesanzeiger) (SAP business partner number ANZEIGER). Which authority is monitoring the boycott on the person listed? a) b) c) d) In the SAP Compliance Management area of the SAP GTS system, choose Sanctioned Party List Screening. Choose the Master Data tab page. Go to the area Sanctioned Party Lists and choose the icon Display SPL Master Data . Enter legal regulation EGTER, list type DPLEU, data provider ANZEIGER, and SPL number 1. Choose Display SPL Record .
Choose the Government Agency tab page. The Federal Office of Economics and Export Control (Bundesamt fr Wirtschaft und Ausfuhrkontrolle, SAP business partner BAFA) is monitoring the boycott on the person listed.
2.
What does the reference type AKA mean? Answer: The abbreviation AKA stands for also known as. This is a typical type of wording in boycott lists if a listed person or organization has a number of pseudonyms. The system always compares all the versions of the names in the SPL master record to the business partner data.
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Lesson Summary
You should now be able to: Explain the legal background of sanctioned party list screening Interpret an SPL master record
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Lesson: Performing Sanctioned Party List Screening

Lesson Overview
Using the sanctioned party list screening service, you can ensure that you do not maintain trade relations with persons or organizations on boycott lists in various states or communities of states. This lesson provides an insight into how sanctioned party list screening is performed and configured in SAP GTS.
Lesson Objectives
After completing this lesson, you will be able to: Describe the process flow for sanctioned party list screening in SAP GTS Perform sanctioned party list screening in the system
Business Example
In the future, IDES Germany intends to check whether each business partner is on a boycott list each time a purchasing or sales transaction is being performed.
Sanctioned Party List Screening in Purchasing and Sales and Distribution

In SAP Compliance Management, entries in the boycott list are managed in SPL master records. You can create SPL master records manually or generate them automatically by uploading a provider's data records (see Lesson Boycott Lists).
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Figure 83: Sanctioned Party List Screening in the Sales Process
The main function of sanctioned party list screening in SAP Compliance Management is to compare business partner data with SPL master records. If the system finds a match between the name and address data of a customer and one or more SPL master records, it blocks the business partner in question. If customs documents already exist, these are also blocked from further use. If a business partner is blocked, the order can no longer be delivered in the feeder system. Note: SAP Note No. 579357 describes which prerequisites must be met in the SAP R/3 or SAP ECC feeder system to prevent an order or outbound delivery that has been blocked by SAP Compliance Management from being processed further. These settings are necessary, irrespective of which SAP Compliance Management services are being used. The screening procedure in the purchasing process is largely identical: in the role of vendor, the system compares the business partner's address data to the existing SPL master records and if there is a match, it blocks the customs document that is required for the purchasing document.
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Figure 84: Sanctioned Party List Screening in the Purchasing Process
If a business partner is blocked, the goods receipt for the purchase order can no longer be posted in the feeder system. Documents that have been blocked by the boycott list check can be released by authorized users using a collective transaction (/SAPSLL/SPL_BLRL). These kinds of changes are listed in a special audit transaction (/SAPSLL/SPL_AT_DOC). In the feeder system, sales employees can display a list of all the orders and outbound deliveries that are blocked by SAP Compliance Management (transaction /SAPSLL/BL_DOC_SD_R3). There is a similar transaction for blocked purchasing documents (/SAPSLL/BL_DOC_MM_R3). If you wish to attain full regulatory compliance, you also use sanctioned party list screening for national purchasing and sales transactions. The sanctioned party list screening service therefore extends beyond foreign trade management alone. However, it is up to you to decide if you want to configure your system to use sanctioned party list screening for all your business transactions. Note: If you want to use sanctioned party list screening for all your goods movements, you activate the appropriate legal regulation for goods receipts and goods issues at level 4 - Check: Receipt/Import (Including Domestic) or Check: Dispatch/Export (Including Domestic). Master data and documents can be checked either synchronously or asynchronously. In a synchronous check, the relevant objects in every posting transaction are immediately compared with the boycott lists. On the other hand, if you decide on asynchronous processing, the SAP GTS system only checks
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whether the document partner's business partner master record is already blocked. If a customs document contains a blocked partner (generally through earlier comparison with boycott lists), that document is blocked.
Figure 85: Check Scenarios
SAP Compliance Management provides several preconfigured check scenarios for the purposes of sanctioned party list screening. Generally, the system responds to manual changes to address data, either in the business partner master record itself or in individual documents that were created in the feeder system. Scenarios A1, B1, and C1 take into account address changes in the master record itself, while scenarios A2 to C2 deal with address changes in foreign trade documents. You can use the A scenarios for spontaneous sanctioned party list screening, while the B scenarios are intended for periodic, asynchronous screening. The C scenarios are used after new data has been uploaded. You can use scenarios S1 to S3 to simulate sanctioned party list screening in a number of variants. As of SAP GTS 3.0, when performing periodic checks, the system checks only data that has been changed since the last check. For business partners, you can also activate a preventive block. Here, SAP GTS initially blocks all business partners newly created through the transfer of master data from the feeder system, without checking them. In Customizing for SAP GTS, you decide at business-partner-role level, whether the system is to perform a synchronous or asynchronous check when it is initially transferring or subsequently changing customer and vendor master data. At customs-item-category level, you define the system's response to changes of address in the feeder system document.
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In SAP GTS 7.0 it is also possible to conduct an SPL screening on employee master data and purely financial transactions.
Comparison Terms
In SAP Compliance Management, the sanctioned party list screening function does not directly access the SPL master records and the business partner addresses, but accesses comparison indices that the system automatically generates when it is creating SPL master records or business partner data records. A comparison index splits SPL master records and the business partner addresses into comparison terms. Every address element therefore becomes a comparison term. In Customizing for sanctioned party list screening, you decide for each control procedure which address components are actually compared during an address comparison.
Figure 86: Comparison Index
You make detailed settings to compile the comparison index in transaction /SAPSLL/VC_CMPAS. Depending on the configuration, different spellings of the same name are added. Standard but irrelevant address components, such as Ltd. or Company can be disregarded during the check. You can display existing comparison indexes for SPL master records in transaction /SAPSLL/SPL_ST01. There is a similar transaction (/SAPSLL/SPL_STBP) for business partner comparison indexes. If you made changes to the specifications for the comparison index compilation after you created business partner or SPL master data, you have to regenerate the indexes with these transactions. In Customizing for SAP Compliance Management, for each comparison term, you also define a minimum percentage match between the comparison term from the business partner address and the comparison term from the SPL master record. If the check procedure does not achieve the minimum percentage match, the system does not display any hits. Otherwise, the business partner or customs document is blocked.
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Exercise 15: Sanctioned Party List Screening in Sales and Distribution

Exercise Objectives
After completing this exercise, you will be able to: Perform sanctioned party list screening when processing sales orders
Business Example
In the future, IDES Germany intends to check whether each business partner is on a boycott list each time a purchasing or sales transaction is being performed.
Task:
IDES Germany sells the ball bearing imported from the United States to customers in India, Italy, and Germany. The SAP GTS system should check whether these customers are on a boycott list. 1. In the feeder system, create an order with sales document type TA for customer 99887. Create the order for ten pieces of material T-BW03-##. What message does the system issue when it is saving the document? Make a note of the document number: ____________________. Why did SAP GTS check this national sales transaction (supplying plant and ship-to party in Germany)? Check the Customizing settings in the SAP GTS system. Now check the blocked document in the SAP GTS system. Display the check log. Was the system justified in blocking the document, or was it a false alarm? Now, display the sanctioned party list screening details. For this, use the periodical inspection of business partner addresses.
2.
3.
4.
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Solution 15: Sanctioned Party List Screening in Sales and Distribution

Task:
IDES Germany sells the ball bearing imported from the United States to customers in India, Italy, and Germany. The SAP GTS system should check whether these customers are on a boycott list. 1. In the feeder system, create an order with sales document type TA for customer 99887. Create the order for ten pieces of material T-BW03-##. What message does the system issue when it is saving the document? Make a note of the document number: ____________________. a) b) c) Choose Logistics ! Sales and Distribution ! Sales ! Order ! Create. Enter order type TA and choose Enter. Enter customer 99887 as the sold-to party, and add purchase order number ##. Then, enter material T-BW03-## and a quantity of 10. Choose Enter. Create the order by choosing Save. The system displays an overview of the results of the checks performed in the three SAP Compliance Management services. In this case, the document is blocked because the customer might be on a boycott list. Choose Enter.
d)
2.
Why did SAP GTS check this national sales transaction (supplying plant and ship-to party in Germany)? Check the Customizing settings in the SAP GTS system. a) In the Customizing of the SAP GTS system, choose SAP Global Trade Services ! SAP Compliance Management ! 'Sanctioned Party List Screening' Service ! Activate Legal Regulations. Select the legal regulation EGTER and double-click in the dialog structure on the entry Country. In the SLP Export Active field, the option 4 - Dispatch/Export (Including Domestic) is set for the country DE.
b)
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3.
Now check the blocked document in the SAP GTS system. Display the check log. Was the system justified in blocking the document, or was it a false alarm? a) b) c) d) e) In the SAP Compliance Management area of the SAP GTS cockpit, choose Sanctioned Party List Screening. In the Documents area on the Logistics tab page, choose the icon Display Blocked Documents . In the Reference Number field of the Document Data in Feeder System area, enter the order number from Step 1 and choose Execute . Select the document and choose Display Log . Display the check details for the document item: the check on legal regulation EGTER has linked the customer with an SPL master record. (The partner address was identified as an entry on a boycott list.)
4.
Now, display the sanctioned party list screening details. For this, use the periodical inspection of business partner addresses. a) b) On the Logistics tab page, choose Check Business Partner Addresses (Dialog) in the area Periodic Check . In the External ID of Business Partner area, enter business partner 99887 and the logical system group GROUP_GTS and choose Execute . Expand the entries for the legal regulations EGTER and click on the partner number 99887. The business partner address and the address data for the SPL master record with which the business partner was identified are shown. Optional: choose the button Detailed Analysis to call up more detailed information about the address comparison.
c)
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Lesson Summary
You should now be able to: Describe the process flow for sanctioned party list screening in SAP GTS Perform sanctioned party list screening in the system
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Unit Summary
Unit Summary
You should now be able to: Explain the legal background of sanctioned party list screening Interpret an SPL master record Describe the process flow for sanctioned party list screening in SAP GTS Perform sanctioned party list screening in the system
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Test Your Knowledge
Test Your Knowledge

1. What is an SPL master record?
2.
What is the difference between asynchronous and synchronous check scenarios?
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Answers
1. What is an SPL master record? Answer: Every entry in a boycott list with which you want to compare your business partners' address data is stored as a sanctioned party list (SPL) master record in the SAP GTS system. 2. What is the difference between asynchronous and synchronous check scenarios? Answer: In an asynchronous check, the system only determines for a data record initially transferred or changed whether the business partner concerned is blocked, without automatically triggering a complete comparison with the SPL master records in SAP GTS.
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Course Summary
Course Summary
You should now be able to: Understand the background of control regulations with regard to foreign trade law and politics Take these control regulations into account in import and export processes Explain the requirements of customs law in foreign trade procedures and how they are represented in the system
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Index
A
antidumping duty, 116, 133 authorization, 64, 131 Authorization, 92 Authorized consignee, 92 Authorized Consignee, 138 Authorized consignor, 89, 92 Automated Export System (AES), 76 Automated Tariff and Local Customs Processing System (ATLAS), 90, 115, 126, 130, 135 Common Agricultural Policy, 4, 103 Common Agricultural Policy (CAP) license, 55, 104 Community Customs Code, 38, 134 Company Code, 18 comparison index, 218 comparison term, 218 Control class, 67 Control grouping, 67 converter, 91, 130 countervailing duty, 133 customs ceiling, 116, 133 customs code list, 93, 131 customs document, 19, 106, 164, 215 Customs document, 66 Customs Document Type, 19 Customs Item Category, 20 customs number, 122 customs office, 3, 19, 77, 122, 127 Customs office, 91 customs procedure, 114 customs shipment, 152 Customs shipment, 79, 92, 131 customs tariff, 115 customs tariff preference, 180 customs union, 34, 182 customs value, 131, 134
B
bill of material (BOM), 189 bill of product (BOP), 106 bonded warehouse, 150 Bonded warehouse procedure, 131, 150 boycott list, 37, 53, 161, 206, 214 Business Identification Number (BIN), 91, 122, 131 Business partner role, 17, 217
C
CAP goods classification, 103 certificate of origin, 183 change of heading, 185, 190 Change pointer, 15 check scenarios, 217 classification, 4, 190 classification help, 121 Combined Nomenclature (CN), 34, 93, 104, 116, 132 Commerce Control List (CCL), 37, 56 commodity code, 16, 104, 115
D
data provider, 19, 119 data providers, 120 Data Providers, 209 declaration of origin, 183 declaration of value, 134 Defaulting data, 80
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delivery, 152 dual-use goods, 36, 54, 62
E
Electronic Data Interchange (EDI), 78, 90 embargo, 36, 53, 161162 ex-works price, 185, 190 export declaration, 77, 104, 117 export license, 56, 62, 78 export list, 36, 57, 118 export procedure, 77
local clearance procedure (LCP), 129 Local clearance procedure (LCP), 151 Logical system, 13
M
material document, 152 Message, 78 message type, 91 monitoring document, 166 movement certificate, 183, 191 movement type, 154
F
foreign trade organization, 17, 122 Form, 81 free trade agreement, 34, 181
N
New Computerized Transit System (NCTS), 90 numbering scheme, 105, 118
H
Harmonized System (HS), 38, 115, 185, 190 Harmonized Tariff Schedule of the United States (HTS), 39, 116
O
Office of departure, 88 office of destination, 138 Office of destination, 89 origin non-preferential, 184, 191 preferential, 184, 191 Output determination, 80
I
import declaration, 117, 129 import license, 166 import list, 165 Integrated Tariff of the European Communities (TARIC), 116 Inward Processing, 131
P
Partner function, 21 Partner grouping, 21 Plant, 18 Plug-in, 12 Post Processing Framework (PPF), 81 preference agreement, 180, 190 Preference agreement, 38, 181 preference determination, 4, 189 preference indicator, 190, 192 preferential customs duty, 133, 180 previous document, 153 processing list, 133, 184 Product master, 16 proof of origin, 3, 181
L
legal regulation, 39, 66, 105, 119, 163, 182, 189, 209 legal unit, 17, 122 Letter of Credit, 4, 98 Letter of credit bank, 99 Letter of credit office, 99 license, 64, 105, 131, 161, 167 License, 100 License types, 66 list of goods, 37, 56, 62
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Index
R
re-exportation, 150 release for free circulation, 115, 128 Remote Function Call (RFC), 13 restitution, 55, 103 rule of origin, 133, 183, 190
summarized declaration, 115, 127 suspension of duty, 116, 133 suspension system, 150
T
tariff quota, 116, 133 tariff shift, 185, 187, 190 Trader Identification Number (TIN), 122, 131 transaction value, 132, 134 Transit declaration, 88, 91 transit procedure, 38, 115, 127, 153 Transit procedure, 87, 90
S
sanctioned party list master record, 208, 214 SAP Business Partners, 16 Schedule B, 78, 116 security, 64, 130 Security, 9293 Shipper's Export Declaration (SED), 78 simplified declaration procedure, 129 Single Administrative Document, 34, 77, 88, 128 specific customs duty, 131 standard customs duty, 117, 132, 180 stock recording, 152, 155
V
value clause, 185, 192 value customs duty, 131 vendor declaration, 4, 190191
W
Wassenaar Arrangement, 36, 62 World Customs Organization (WCO), 115
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Feedback
SAP AG has made every effort in the preparation of this course to ensure the accuracy and completeness of the materials. If you have any corrections or suggestions for improvement, please record them in the appropriate place in the course evaluation.
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GTS100 - SAP Global Trade Services

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SAP Global Trade Services

Date Training Center Instructors Education Website

An SAP course - use it to learn, reference it for work

Unit 2: Export Processes .............................................. 51

Unit 3: Import Processes.............................................. 113

Unit 4: Origin of Goods and Preferences ......................... 179

Unit 5: Sanctioned Party List Screening .......................... 205

Index ....................................................................... 229

SAP Software Component Information

Lesson: SAP GTS: Structure and Functions

Goods Movements Across Borders

Lesson: SAP GTS: Structure and Functions

Figure 1: Goods Movements Across Borders

Figure 2: Product Structure

Lesson: SAP GTS: Structure and Functions

SAP GTS in the Company and in Logistics Processes

Figure 3: SAP GTS in the Company

Lesson: SAP GTS: Structure and Functions

Figure 4: SAP GTS in Logistics Processes

Lesson: SAP GTS: Structure and Functions

Exercise 1: Introduction to SAP GTS

Solution 1: Introduction to SAP GTS

Lesson: SAP GTS: Structure and Functions

Lesson: System Architecture

Lesson: System Architecture

Figure 5: SAP GTS in the System Landscape

Figure 6: Basic Principle of System Architecture

Master Data Replication

Lesson: System Architecture

Figure 7: Master Data Distribution

Figure 8: Example: Transferring a Product Master

Lesson: System Architecture

Figure 9: SAP Business Partner Roles

Figure 10: Organizational Units in SAP GTS

Lesson: System Architecture

Figure 11: Customs Document Types - Examples: SAP Compliance Management

Figure 12: Partner Roles and Partner Functions

Lesson: System Architecture

Lesson: System Architecture

Exercise 2: Organizational Units and Master Data

Continued on next page

Lesson: System Architecture

Solution 2: Organizational Units and Master Data

Continued on next page

Lesson: System Architecture

Lesson: System Architecture

Exercise 3: Customs Document Types

Solution 3: Customs Document Types

Lesson: System Architecture

Lesson: Basic Regulatory Principles

Lesson: Basic Regulatory Principles

Figure 13: Supranational Legislation: The EC

Lesson: Basic Regulatory Principles

Figure 14: Free Trade Zones Example: NAFTA

Foreign Trade Law

Lesson: Basic Regulatory Principles

Supranational level Community Customs Code and its implementing regulation

National Level (Example: Germany) Customs Administration Law Customs Regulation

Lesson: Basic Regulatory Principles

Legal Regulations in SAP GTS

Figure 15: Legal Regulations

Lesson: Basic Regulatory Principles