It’s important to ensure an ERP system can support electronic documentation as this encourages cost and time savings as well as error reduction. The Excise Movement and Control System (EMCS) functionality within SAP Global Trade Services (GTS) is one tool that supports electronic documentation and should be utilized when transporting goods through the European Union (EU).
Excisable products and duties suspension in EU
Within the EU, excise duties are applicable on alcohol, tobacco and energy products at the final point of consumption. Companies can distribute these goods under “excise duty paid” or “excise duty suspension.” To circulate excise goods under duties suspension, goods must transit together with the appropriate Administrative Accompanying Document (AAD) which is issued by the consignor. The information included in the document includes:
- Shipment description
- Origin SAP Global Trade Services
- Final destination
- Administration and economic operators information
This documentation ensures excise duties are appropriately imposed at the final destination. Lots of companies in the EU are either not yielding the benefit of duties suspension or spending a lot of time and resources in filling manual AAD. By integrating the EMCS with their existing ERP system, companies can reduce costs and time significantly.
Excise Movement and Control System: an Introduction
The EMCS is used by EU member states to electronically monitor the movement of duty-suspended excisable goods within the EU. It replaces the paper-based AAD with an electronic Administrative Document (eAD). EMCS framework also offers many communication messages to support numerous scenarios for the movement of the goods, such as:
- Submission of an eAD (Message ID: IE815)
- Validation of report of receipt (Message ID: IE818)
- Cancellation of an eAD (Message ID: IE810)
Apart from the above standard scenarios, there are specialized scenarios such as change of destination, alert or rejection of the eAD or splitting of consignment.
Use of the EMCS requires both the consignor and consignee to be registered in the System of Exchange of Excise Data (SEED) and authorization from member states before moving any duty suspended excise goods.
Implementing EMCS with SAP
SAP GTS offers EMCS programs both for inbound (consignee) and outbound (consignor) deliveries that can be leveraged to establish and monitor the communication between the company’s ERP feeder system and EU member state.
EMCS has been generically implemented for European Specification (such as activity sequence, interface to converter, and customizing) and is available within the GTS application. Therefore, an organization’s employees spend significantly less time implementing EMCS; however, it’s important to note specific localization implementation (such as IDoc mapping, EDI, printouts etc.) is required for every EU member state, as per the state’s implementation handbook.
It’s important to note the SAP ECC integration for EMCS isn’t supplied as part of SAP GTS, rather a framework of eight integration interfaces supports flexible incorporation with an SAP or non-SAP system. These interfaces need to be implemented as function modules and called via RFC.