Organizations have to manage goods being imported into their country and the declarations that go along with importing. To improve efficiency, reduce costs in the compliance process, and avoid delays in customs clearance, you can automate your import declarations using a Global Trade Management tool. In this white paper preview, we will be discussing how the functionality in SAP Global Trade Services can reduce these trade compliance costs. At the end of this blog, you will be able to download the remainder of the white paper, if interested.
The 10+2 Rule
On January 26, 2009, US Customs and Border Protection (CBP) introduced a rule titled Importer Security Filing and Additional Carrier Requirement which is commonly known as the “10+2” rule (more information on the CBP rule). Under this rule, before any goods arrive by vessel into the United States, the Importer Security Filing (ISF) needs to be submitted in advance by the importer or the agent (licensed customs broker) electronically to the CBP. This requirement only applies to cargo arriving to the US by ocean vessel, not cargo arriving by other modes of transportation. The ISF importer or their agent must provide eight data elements no later than 24 hours before the cargo is set aboard a vessel destined to the US.
These data elements are: seller, buyer, importer of record number, consignee number, manufacturer (or supplier), ship-to party, country of origin and the commodity’s Harmonized Tariff Schedule of the United States (HTSUS) number. Two additional data elements — container stuffing location and consolidator —must be submitted as early as possible but no later than 24 hours prior to the ship’s arrival at a US port.
CBP may issue liquidation of $5,000 per violation for the submission of an inaccurate, incomplete or untimely filing. If goods for which an ISF has not been filed arrive in the US, the CBP may withhold the release or transfer of the cargo, refuse the unloading of the merchandise or seize it if it is illegally unloaded. Additional noncompliant cargo could be subject to “do not load” orders at origin or further inspection on arrival.
From an importing point of view, companies use different approaches to meet the requirement.
How to Configure Your Import Process
Now that we’ve discussed the basics of the 10+2 rule, it’s time to dive into the import processes setup using SAP ECC and SAP GTS, and the key configuration setup for building a robust solution, data, and process to support the requirement. Later, we’ll provide details on building an automated interface with your brokers for import declarations.
Quick overview of the logistics integration and the process overview of the import management
Import processes are triggered based on your incoming schedule, which could trigger based on the vendor purchase order. Let’s take the example of a purchase order logged in an SAP ECC system with the US as the country of destination. Follow menu path User Menu > Logistics > Materials Management > Purchasing > Create/Change/Display Purchase Orders to see a purchase order (Figure 1).
Figure 1: Standard Product Purchase Order in SAP GTS
From the Display/Change Purchase Order screen, click the Conditions tab to see the screen in Figure 2, and the Partners tab (not pictured) to see the screen in Figure 3. These screens provide the document data details that trigger the document in SAP Global Trade Services for customs declarations, the purchase order, net value, and the statistical value.
Figure 2: Purchase Order Conditions in SAP GTS
Figure 3: Partners in the Purchase Order
SAP Global Trade Services Declarations
As the purchase order is saved in SAP ECC, this information is automatically transferred to SAP Global Trade Services, and an equivalent customs declaration document is created in that system. Figure 4 displays the report in SAP Global Trade Services, which shows the customs declaration work list. Click the icon next to “Create Declaration Before Goods Receipt”.
Figure 4: Customs processing: Import
This brings up the report shown in Figure 5. The report allows you to display the purchase orders that were logged into SAP ECC.
Figure 5: Create Declaration prior to Goods Receipt
This report displays all the purchase orders that have been logged in SAP ECC, for which equivalent SAP Global Trade Services customs declaration documents are created (Figure 6).
Figure 6: Enter declaration before Goods Receipt
This worklist provides the details of the vendor, purchase order, item number, any inbound delivery, open quantity, unit of measure, product number, and the declared quantity. The inbound delivery triggers confirmation of the goods arrival (also called advanced-shipment notification) and these documents are identified for customs pre-clearance.
If you are interested in reading the remainder of this white paper which details the customs document review, customs importing process and configuration steps, and some tips for configuring the global trade management tool SAP GTS, you can download the full white paper here.