Any venture into global trade is inherently complex. Rules, regulations, and supply chains involving foreign manufacturers, brokers, carriers, customs, and global buyers can be fraught with risk. Yet each of these tasks presents opportunities to simplify and automate the process. Enterprises that have implemented SAP to manage key aspects of their business already recognize the benefits of SAP business process management. There are many business process management capabilities in the SAP Global Trade Services (GTS) module. Three of them cover critical global trade tasks: Product classifications, sanctioned party screenings, and communications with customs. On each front, you will significantly reduce the risk of human error and streamline your trade transactions.
3 Ways SAP Business Process Automation Within GTS Can Reduce Human Error
Proper product classification is a requirement for trade compliance. An enterprise may be importing or exporting hundreds to thousands of products. Thousands of trade transactions can be in process at any time. The SAP business process management capabilities of GTS reduce potential errors associated with product classification by:
- Maintaining an up-to-date table of export/import code numbers corresponding to product classifications established by the Harmonized Tariff Schedule ( HTS), as well as classification codes for other countries, to accurately and consistently classify imported products
- Using code numbers to automatically classify import transactions for applicable duties; you’ll get another efficiency through mass classification of items
- Blocking an export/import transaction if a product is missing a classification
- Providing accurate classifications to customs authorities for self-filing in a timely manner
Similarly, errors can be avoided during license checks for export transactions. SAP business process management capabilities of GTS expedite export transactions by:
- Using export control classification numbers—ECCN (part of the Export Administration Regulations (EAR) established by the US Bureau of Industry and Security, or the United States Munitions List (USML) that is governed by International Traffic in Arms Regulations, as well as similar export classification numbers for other countries to determine if there are any restrictions based on classifications.
- Automatically assigning a license or an exception based on the license strategies
- Automatically monitoring the validity period and depreciation of value and quantity of export licenses
Proper product classification using SAP business process management capabilities of GTS allows importers and exporters to:
- Eliminate the manual review and classification of individual import and export transactions, saving anywhere from minutes to hours on each transaction
- Establish a consistent process to determine product classifications and reduce human errors that lead to incorrect tariffs or duties, shipment delays, or fines
- Based on correct classifications, consistently determine the proper licensing required for exports and provide an efficient process for automatically assigning license exceptions
- Automatically depreciate the value (dollar amount) and/or decrement the quantity (amount of items) within a license
- Maintain a detailed record of transactions in support of audit requirements
Managing Denied Party Screening
Governments have a focused interest in limiting or preventing trade with hostile countries and their agents. Governments publish denied party lists to help enterprises identify these entities and avoid unauthorized trade transactions. GTS uses the denied party list to ensure proper screening of parties involved in a transaction.
GTS automatically compares business partners’ names and addresses with information contained in the denied party list. If a match is found, the transaction is automatically blocked and placed in a review queue to resolve the problem and prevent the transaction from progressing.
With SAP-GTS business process automation, denied party screening is accomplished in seconds, and ensures consistent and accurate screenings. Denied party lists are updated frequently and GTS screens against the most up-to-date lists. Automation eliminates oversights associated with a manual search process and resulting in fines, loss of export license, or even criminal charges.
Communicating With Customs
Customs clearance can be expedited by ensuring required documentation has been submitted in a timely manner. SAP business process management capabilities of GTS facilitate this by taking advantage of electronic filing services provided by the US.
GTS automates import declarations and export declarations. For enterprises that self-file these declarations, the information is automatically validated against compliance regulations (classification, valuation, denied parties, etc.) and electronically submitted to the Automated Commercial Environment (ACE). Alternatively, an enterprise can send this information via email to their carrier/broker.
SAP business process automation eliminates errors of incomplete filling and reduces the risk of late filing that could result in fines or penalties. For imports, this could result in additional storage fees. Consistent, timely filing of the required information reduces customs delays and helps an enterprise establish a favorable reputation with Customs and Border Protection. Additionally, in the event of an audit, detailed trade transaction information maintained by GTS will help minimize the burden of that process.
Bonus: Optimizing Trade Transactions
Any enterprise involved in extensive import or export processes can benefit from the business process management capabilities available in SAP-GTS. Without the aid of automation, high-volume trade transactions can be subject to numerous errors associated with improper product classification, oversights regarding denied parties, and failure to file required import and export documentation in a timely manner. Any of these errors can lead to customs delays, fines, or costly sanctions. The business process management capabilities of SAP GTS enables enterprises to significantly reduce these errors and execute far more efficiently global trade transactions.