Issue

Syensqo currently uses GTS for a number of compliance related capabilities. Some parts are fit for purpose and used comprehensively while others are not used consistently, have significant gaps or not use at all. This KDD provides the options for 

1) Standardize the usage of GTS globally

2) Implement those functional capabilities that are not used today

Recommendation

Please see the matrix below outlining each of the critical interface. Also in the Recommendation 

Background & Context

Process Working fine with minor issues

Master Data Issues

Customs Predominantly outsourced to brokers

Compliance process working fine with minor issues

Master Data Issues

Compliance / Customs integration predominantly works

Preference process is not optimally designed and needs re-design

Master Data Issues

Assumptions

• It is assumed that GTS for HANA suite will be available to deliver the TO-BE E2E solutions for each of the scenario's/ Integration documented in this KDD.
• It is also assumed that there could be changes or modifications within these interfaces based on specific requirements or localizations during detailed design phase.
• It is also assumed that the TO-BE GTS instance can be integrated with multiple ERP system.

Constraints

Not Applicable

Impacts

• Data Cleansing:
  • Product classification
  • Tax registration information
  • Country of Origin
• Change management
• Upstream / Downstream systems
• Integration with 3rd party data providers

Background & Context

Following is the current status of the GTS integration in the current system. Green indicates that the process is currently active in GTS and yellow indicate a potential opportunity to implement

Assumptions

• It is assumed that GTS for HANA suite will be available to deliver the TO-BE E2E solutions for each of the scenario's/ Integration documented in this KDD.
• It is also assumed that there could be changes or modifications within these interfaces based on specific requirements or localizations during detailed design phase.
• It is also assumed that the TO-BE GTS instance can be integrated with multiple ERP system.

Constraints

Not Applicable

Impacts

• Data Cleansing:
  • Product classification
  • Tax registration information
  • Country of Origin
• Change management
• Upstream / Downstream systems
• Integration with 3rd party data providers

Business Rules

Options considered

 Sales Document integrated to GTS

Objects that needs to be cleansed: Material master Classifications Needs to cleansed

SPL search algorithm needs to be optimised - GTS configuration

Audit trails for regional embargo's

Ex-Works price is inaccurate - to be available

Data cleansing of license assignment

Logistics (Outbound/Inbound Delivery) document integrated to GTS

• Missing integrations with logistics: waybill , containers , change of weight and dimensions
• TM Integration

Purchase documents Integration with GTS: Preference

Invoice(Proforma) Integration with GTS: Options Entering data manually

Evaluation

1. IBPP (Identity Based Preference Processing Vs Convetional GTS Preference)

RECOMMENDATION : (OPTION B) IBPP

2. Use GTS CWH Functionality

Recommendation:  Based on the evaluation table above using CWH solution with GTS 4 HANA.

lead to add

See also

Change log

Workflow history

Integration Elements

Overview

Integration between Feeder System and GTS happens due to compliance, customs, preferential and statistical reporting activities.

The following functions in GTS are supported and performed due to these integrations.

Note : All these activities in GTS are statutory and obligatory (except intrastat reporting which can be done via HANA international trade module).

• Master Data’s
• Sanction Party list Screening (Compliance Management)
• Legal control Activities including ITAR compliance ( Compliance Management)
• Embargo Screening (Compliance Management)
• Export and Import Declaration Activities both E-Filing and Broker enablement (Customs Management).
• Preference Calculation (Risk Management)
• Intrastat Reporting (Enterprise Compliance Reporting)

MASTER DATA (Continuation of AS-IS)

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Additional Master Data Integration Requirement

CUSTOMS EXCHANGE RATES

In selected country’s the exchange rates are required to be updated in the system from their designated financial authorities. These exchanges are required to be periodically updated in the S4 HANA system and a standard SAP supported batch job will update them in GTS.

Failing to update have them correctly updated will create disparity between origin curreny (Invoice currency) and Customs Currency during customs filing ( For imports). This might lead to Show Cause or Penalty from customs authorities.

Some Reference Links are shared below

Germany (offers multiple formats for download): http://www.zoll.de/SiteGlobals/Forms/KursSuche/KurseSuche_Formular_NotierteWaehrung.html;jsessionid=AD1637C99B2440FF0596E59C35C0FF7F

Netherlands :https://www.belastingdienst.nl/wps/wcm/connect/bldcontenten/belastingdienst/customs/reference_books_and_other_information/currency_exchange_rate/currency_exchange_rate

Note :Entry Added to Custom Development Register.

SANCTION PARTY LIST SCREENING (COMPLIANCE MANAGEMENT)

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Legal Control and Embargo Checks

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E2E Integration for Customs (Export/Imports)

Overview

For Customs Management, you can transfer four categories of feeder system documents to SAP GTS: The replicas of purchasing documents and material documents are referred to as customs declarations in SAP GTS. Inbound deliveries and billing documents can be transferred as both customs declarations and customs shipments.

• Purchasing documents
• Sales Documents
• Logistics and Transportation Documents
• Material documents
• Billing documents

TO-BE EXPORT PROCESS AT A GLANCE

Image Added

IMPORT PROCESS

Overview

Unlike Export the import processing has more variations depending on type of import (Duty Paid/Duty Unpaid/ Process Reliefs/Foreign Trade Zone etc) and Customs Territories (US, EU, Non-EU, China, India etc). Each of these flows will also impact the document integration and data exchange between SAP GTS and S4 HANA.

Import Declaration Prior To Goods Receipt (Duty Paid)

Customs declarations prior to goods receipt let you to declare imports to the customs authorities before you take physical possession of the goods. This lets you start the customs declaration process for the transfer of third-country goods to free circulation directly at the border, for example, and complete it with verification of the declared data after goods receipt. This procedure is needed, for example, to obtain a release from the customs authorities for goods that have arrived at a port or airport and have to be placed into a customs status before transportation further inland is possible.

Image Added

Import Declaration After Goods Receipt (Duty Un-Paid/Bonded Warehouse)

Overview

Special customs procedures, such as customs warehousing and outward processing are some of the scenario's where a material document from feeder system is used to create the import declaration with the customs authorities. In such cases,you have to post the goods receipt directly from the inbound delivery and the inbound delivery must have a purchase order reference.

Image Added

PREFERENCE PROCESSING

Overview

Preference Processing supports an exporter to meet the legal requirements for preferential customs treatment and document your products as eligible for preferential treatment.Based on this documented eligibility for preferential treatment, the exporter's customers can import these products duty-free or at a reduced rate of import duty, giving the exporter a decisive competitive advantage.

Image Added

Master Data Integration Requirements (Pre-Requisites)

The following master data elements are transferred from the feeder system to GTS.

INTRASTAT _SAP S/4 HANA for International Trade and SAP GTS (Integrated Solution)

Introduction

Intrastat is a statistical reporting system used in the European Union (EU) to collect information on the movement of goods between EU member states. It is a means of monitoring and analyzing trade flows within the EU's single market. Intrastat is implemented in each EU member state and requires businesses to provide detailed data on their intra-EU trade activities.
The Intrastat system applies to businesses that exceed certain thresholds for the value of goods dispatched (sales to other EU member states) and the value of goods acquired (purchases from other EU member states). The thresholds vary by country.
Under Intrastat, businesses must report specific details about their cross-border transactions, including the commodity code, value, quantity, and partner country of the goods traded. These details enable national statistical agencies to gather data on intra-EU trade and compile statistics on imports and exports within the EU.

PROCESS FLOW

Image Added

INTRASTAT ARRIVALS

Source Documents from Feeder System (ERP_S4 HANA)

• Purchase Orders
• MM Schedule Lines

INTRASTAT DISPATCHES

Source Documents from Feeder System (ERP_S4 HANA)

• Billing Documents

ADDITIONAL FUNCTIONALITIES RECOMMENDED ( SUBJECT TO TO_BE WORKSHOP)

There are 2 additional functional elements recommended to Syensqo based on GAP's identified during AS_IS workshops. Both of these 2 functionalities are supported by standard SAP and is available in GTS 4 HANA Business Suite. These 2 functionalities attract additional integration elements with S4 HANA hence it is included in this document.

1. IBPP (Identity Based Preference Processing)

Problem Statement

As of now, Syensqo experiences major issues with critical data elements such as ' Country of Origin' . Currently this information is mantained at the product level but there are challenges to store accurate COO information based on stock sourcing. There could be multiple origin for the same product or there could additional component utelized in producing the item, and both of these are reason that leads towards incorrect preference calculation. As a result there are significant amount of loss in trade savings.

Overview

identity-based preference processing supports exporters in fulfilling all legal requirements for customs preferences and identifying their goods as eligible for preferential treatment. Users can determine the preference status of production and process orders at an identifier (Batch) level.The application supports preference determination on production and process orders with static bill-of-materials (BoM) based on actual goods consumption.

The difference between IBBP and standard preference functionality is that instead of calculating configurable materials in sales documents, the system calculates process orders or production orders with the actually consumed components and quantities.

Image Added

NOTE: IDENTIFIER IN IBPP = BATCH MASTER

Integration Elements

• Production /Service Orders (S4 HANA)
• Purchase Orders
• Goods Receipt

SAP TM Integration with GTS

To clear the shipment from Customs, SAP TM also sends the Freight Orders to SAP GTS that undergo the Screening and create Customs Declarations. They are in turn used to do filing with Customs Authorities. Items of Integration in SAP S/4HANA with SAP TM to SAP GTS:

• Master Data Transfer from SAP S/4HANA or SAP ECC to SAP GTS

• Integration of Forwarding Order in SAP TM to SAP GTS Compliance Document

• Integration of Freight Order from SAP TM to SAP GTS Customs Declaration

In terms of SAP TM Documents that integrate with SAP GTS standard out-of-the-box are following:

• Compliance Check for Sanctioned Party Screening on SAP TM Forwarding Order

• Compliance Check for Embargo Screening on SAP TM Forwarding Order • Export Declaration Creation in SAP GTS from SAP TM Freight Order

Change log

Workflow history

Integration Elements

Overview

Integration between Feeder System and GTS happens due to compliance, customs, preferential and statistical reporting activities.

The following functions in GTS are supported and performed due to these integrations.

Note : All these activities in GTS are statutory and obligatory (except intrastat reporting which can be done via HANA international trade module).

• Master Data’s
• Sanction Party list Screening (Compliance Management)
• Legal control Activities including ITAR compliance ( Compliance Management)
• Embargo Screening (Compliance Management)
• Export and Import Declaration Activities both E-Filing and Broker enablement (Customs Management).
• Preference Calculation (Risk Management)
• Intrastat Reporting (Enterprise Compliance Reporting)

MASTER DATA (Continuation of AS-IS)

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Master Data Transfer Process between S4 HANA and GTS

• All customer, vendor, and material master data, and if applicable, bills of material (BOMs) relevant for preference determination and re-export control, from the feeder system to the SAP GTS system using Remote Function Calls (RFC).
• A distinction must be made between the initial data transfer when the SAP GTS system is set up and regular transfers of new or changed data during operation. There are standard change pointers available in S4 HANA dedicated for this purpose.
• The change pointer creates a connection between change documents and the corresponding message type. When creating or changing a master record, the application program checks whether the change pointer function is activated. If the function is activated, the system saves a change pointer to the database.
• For SAP GTS purposes, so-called reduced message types are used. Message types denote the data that can be exchanged between systems in ALE or EDI scenarios, for example, MATMAS for material masters, CREMAS for vendor masters, and DEBMAS for customer masters.

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Masters data’s received from external parties

• SPL List: Currently these SPL lists are uploaded manually in GTS (periodically) via a frontend transaction. These are usually an XML file provided by an external data provider (such as Descartes for Syensqo) and dumped in a Syensqo provided Network directory. In TO-BE solution , this interface might get automated and post TO-BE this might get added to the RICEF list.
• Duty Rates: Duty rates are also supplied by external agencies and they are uploaded in GTS via frontend transaction within the master data cockpit.
• HTS / Tariff codes/ECCN (Export control classification number) : These are uploaded in the system during cutover (One time) manually via a frontend periodic updates to these. This numbers are used to classify the products in GTS for compliance and customs purposes.

Data Transfer from GTS to Feeder System

• Once the products are classified with a HTS (Harmonized Tariff) this numbers are sent back to the product master in S4. This happens via a change pointer based transfer API maintained in GTS and S4 system. Usually this gets updates via periodic batch jobs. Currently at Syensqo this job is running once daily.

Note : It is also estaiblished during our L3 process mapping sessions that the duty rates will also be transferred back to the feeder for product costing purpose. These rates will be included as an costing element (condition type) in the purchase order line item. A new RICEF entry will be create post TO-BE workshop for this requirement.

Additional Master Data Integration Requirement

CUSTOMS EXCHANGE RATES

In selected country’s the exchange rates are required to be updated in the system from their designated financial authorities. These exchanges are required to be periodically updated in the S4 HANA system and a standard SAP supported batch job will update them in GTS.

Failing to update have them correctly updated will create disparity between origin curreny (Invoice currency) and Customs Currency during customs filing ( For imports). This might lead to Show Cause or Penalty from customs authorities.

Some Reference Links are shared below

Germany (offers multiple formats for download): http://www.zoll.de/SiteGlobals/Forms/KursSuche/KurseSuche_Formular_NotierteWaehrung.html;jsessionid=AD1637C99B2440FF0596E59C35C0FF7F

Netherlands :https://www.belastingdienst.nl/wps/wcm/connect/bldcontenten/belastingdienst/customs/reference_books_and_other_information/currency_exchange_rate/currency_exchange_rate

Note :Entry Added to Custom Development Register.

SANCTION PARTY LIST SCREENING (COMPLIANCE MANAGEMENT)

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1. You create a sales document or document for materials management in the feeder system.
2. SAP GTS, edition for SAP HANA (SAP GTS) starts sanctioned party list screening automatically. Based on the rules that you configured during implementation, the address data in the business documents is checked against the available sanctioned party lists in the GTS system. You can obtain these lists in XML format from external data providers and upload them to your GTS system. You can also create your own lists.
3. The monitoring features in the GTS system let you easily keep track of all checked addresses.
4. An employee with the appropriate authorizations can use the monitoring capabilities to release blocked documents for further processing.
5. Periodic checks can be set up to check the current available master data. You can configure the sequence that is used for checking the master data. It makes sense to set up the system so that all the master data is checked automatically after every update of the sanctioned party lists.
6. All activities are logged in the area of sanctioned party list screening and can be archived for legal purposes with the SPL audit trail function.

Note: If a document is blocked then some activities pertaining to goods movement such as picking/packing and Goods issues is also blocked in the feeder system. This is controlled via incompletion checks in S4 system based on status checks in GTS.

Legal Control and Embargo Checks

Image Removed

E2E Integration for Customs (Export/Imports)

Overview

For Customs Management, you can transfer four categories of feeder system documents to SAP GTS: The replicas of purchasing documents and material documents are referred to as customs declarations in SAP GTS. Inbound deliveries and billing documents can be transferred as both customs declarations and customs shipments.

• Purchasing documents
• Sales Documents
• Logistics and Transportation Documents
• Material documents
• Billing documents

TO-BE EXPORT PROCESS AT A GLANCE

Image Removed

IMPORT PROCESS

Overview

Unlike Export the import processing has more variations depending on type of import (Duty Paid/Duty Unpaid/ Process Reliefs/Foreign Trade Zone etc) and Customs Territories (US, EU, Non-EU, China, India etc). Each of these flows will also impact the document integration and data exchange between SAP GTS and S4 HANA.

Import Declaration Prior To Goods Receipt (Duty Paid)

Customs declarations prior to goods receipt let you to declare imports to the customs authorities before you take physical possession of the goods. This lets you start the customs declaration process for the transfer of third-country goods to free circulation directly at the border, for example, and complete it with verification of the declared data after goods receipt. This procedure is needed, for example, to obtain a release from the customs authorities for goods that have arrived at a port or airport and have to be placed into a customs status before transportation further inland is possible.

Image Removed

Import Declaration After Goods Receipt (Duty Un-Paid/Bonded Warehouse)

Overview

Special customs procedures, such as customs warehousing and outward processing are some of the scenario's where a material document from feeder system is used to create the import declaration with the customs authorities. In such cases,you have to post the goods receipt directly from the inbound delivery and the inbound delivery must have a purchase order reference.

Image Removed

At Syensqo the following variants will be performed depending on business process and geography.

• Release products to free circulation or place them in a special customs procedure

• Release partial quantities to free circulation

• Delete a material document item that has no influence on stock postings of a special customs procedure

• Delete partial quantities of material document items.

POSSIBLE ADDITIONS TO SYENSQO TO-BE IMPORTS PROCESS DESIGN (RECOMMENDED)

Customs Invoice : Integration of inbound invoice (Inter-Company or Supplier Invoice) to create customs Invoice in GTS. Subject to our TO-BE discussion, this might be an additional element which will created in GTS . The following elements will be accurately updated in import declaration before submitting to the authorities.

• External Invoice Number
• Value
• Invoice Date
• Invoice Currency
• Incoterm 
• Invoicing Party

PREFERENCE PROCESSING

Overview

Preference Processing supports an exporter to meet the legal requirements for preferential customs treatment and document your products as eligible for preferential treatment.Based on this documented eligibility for preferential treatment, the exporter's customers can import these products duty-free or at a reduced rate of import duty, giving the exporter a decisive competitive advantage.

Image Removed

Master Data Integration Requirements (Pre-Requisites)

The following master data elements are transferred from the feeder system to GTS.

INTRASTAT _SAP S/4 HANA for International Trade and SAP GTS (Integrated Solution)

Introduction

Intrastat is a statistical reporting system used in the European Union (EU) to collect information on the movement of goods between EU member states. It is a means of monitoring and analyzing trade flows within the EU's single market. Intrastat is implemented in each EU member state and requires businesses to provide detailed data on their intra-EU trade activities.
The Intrastat system applies to businesses that exceed certain thresholds for the value of goods dispatched (sales to other EU member states) and the value of goods acquired (purchases from other EU member states). The thresholds vary by country.
Under Intrastat, businesses must report specific details about their cross-border transactions, including the commodity code, value, quantity, and partner country of the goods traded. These details enable national statistical agencies to gather data on intra-EU trade and compile statistics on imports and exports within the EU.

PROCESS FLOW

Image Removed

INTRASTAT ARRIVALS

Source Documents from Feeder System (ERP_S4 HANA)

• Purchase Orders
• MM Schedule Lines

INTRASTAT DISPATCHES

Source Documents from Feeder System (ERP_S4 HANA)

• Billing Documents

Integration Steps

• Billing documents are created for goods already delivered to customers. These billing documents contain all the values required for Intrastat, including the invoice and statistical values.
• The declaration currency is predefined by country. As documents can also be created in different currencies, a conversion into the declaration currency is often necessary.

The following SD sales document categories are processed by the Intrastat programs:

• Invoice
• Invoice Cancellation
• Credit and Debit Memo
• Inter-Company Invoice
• Inter-Company Credit Memo

The four illustrations below illustrate the system's behavior and the partner's responsibility given different scenarios for Dispatch reporting.

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ADDITIONAL FUNCTIONALITIES RECOMMENDED ( SUBJECT TO TO_BE WORKSHOP)

There are 2 additional functional elements recommended to Syensqo based on GAP's identified during AS_IS workshops. Both of these 2 functionalities are supported by standard SAP and is available in GTS 4 HANA Business Suite. These 2 functionalities attract additional integration elements with S4 HANA hence it is included in this document.

1. IBPP (Identity Based Preference Processing)

Problem Statement

As of now, Syensqo experiences major issues with critical data elements such as ' Country of Origin' . Currently this information is mantained at the product level but there are challenges to store accurate COO information based on stock sourcing. There could be multiple origin for the same product or there could additional component utelized in producing the item, and both of these are reason that leads towards incorrect preference calculation. As a result there are significant amount of loss in trade savings.

Overview

The difference between IBBP and standard preference functionality is that instead of calculating configurable materials in sales documents, the system calculates process orders or production orders with the actually consumed components and quantities.

Image Removed

NOTE: IDENTIFIER IN IBPP = BATCH MASTER

Integration Elements

• Production /Service Orders (S4 HANA)
• Purchase Orders
• Goods Receipt

SAP TM Integration with GTS

To clear the shipment from Customs, SAP TM also sends the Freight Orders to SAP GTS that undergo the Screening and create Customs Declarations. They are in turn used to do filing with Customs Authorities. Items of Integration in SAP S/4HANA with SAP TM to SAP GTS:

• Master Data Transfer from SAP S/4HANA or SAP ECC to SAP GTS

• Integration of Forwarding Order in SAP TM to SAP GTS Compliance Document

• Integration of Freight Order from SAP TM to SAP GTS Customs Declaration

In terms of SAP TM Documents that integrate with SAP GTS standard out-of-the-box are following:

• Compliance Check for Sanctioned Party Screening on SAP TM Forwarding Order