It is the importers' responsibility to ensure imported goods meet admissibility requirements including proper marking, safety standards, etc. They must also obtain all necessary permits in advance of the goods' arrival, observe all duty rates when goods arrive, and make sure the all requisite documentation is filed with the proper authorities throughout the import process.

GTS allows companies to remain compliant with trade regulations as they move goods and services across boarders. It's a standalone application that can be linked to one or more ERP systems such as R/3 and non-SAP sources. For an overview of the GTS system, refer to my article "Automate Global Import/Export Processes Across Your Enterprise with SAP GTS."

Let's walk through some of the more often used import features of GTS to see how the system helps ensure that customs requirements are met. I will highlight how the GTS Compliance and Customs Management components aid in ensuring that your importing operations are in line with import compliance checks and allow you to be confident your company's products will clear customs.

Monitor Documents

GTS import functionality includes the Legal Control – Import cockpit in the Compliance Management component (Figure 1). Access the cockpit directly via transaction /SAPSLL/MENU_LC_IMP or from the GTS Compliance Management screen.

Figure 1

The Legal Control – Import screen with monitoring, license, and embargo options

The Legal Control Import (LCI) screens are set up identically to the Legal Control Export (LCE) screens in the GTS system. (For more details about GTS export functionality, see "Stay Compliant with Expert Controls Automatically Using SAP GTS," SCM Expert, October 2004.) The LCE does the export determination based on the departure country and the LCI does the import control determination by the destination country's regulations. Every export is an import for the receiving country. In terms of governmental regulations, however, export and import laws are distinctly different and each have their own unique regulations, which the GTS system allows you to address.

Much of the GTS system's import feature set is accessed via the main cockpit for import controls shown in Figure 1. The Monitoring tab offers various options to view import transactions coming from an SAP or a non-SAP feeder system. You can maintain import-specific licenses in the Maintain section of the License tab or use the Simulation tab to simulate an import check on transactions. The Legal Control Data tab allows you to assign an import commodity code, which is a code that controls import licenses, and the Determination Strategy for License Type tab allows you to develop a license determination strategy for imports. You can view archived documents with the Display Archived Customs Documents option under the Archive tab.

Imports from Embargoed Countries

Importers must adhere to United States trade sanctions administered by the Office of Foreign Assets Control (OFAC). These generally prohibit importing into the US and its territories, either directly or indirectly, most goods, technology, or services originating in Afghanistan, Cuba, Iran, Iraq, Libya, North Korea, Serbia, or Sudan. Those designated by the US Secretary of State as promoting the proliferation of weapons of mass destruction and named foreign terrorist organizations are also under US trade sanctions, as are designated terrorists and narcotics traffickers. Vessels and aircraft under the registry, ownership, or control of sanctioned targets may not import merchandise into the United States.

Maintain embargo countries with the Country Information option on the Embargo tab in Figure 1. If there is an import-specific embargo that doesn't apply to export processes, you can use the Legal Reg./Country of Dept/ Destination option and define the import leg for embargo control. With the Release Blocked Documents option, you can view and release embargo documents. Monitor your business partners under embargo via the Business Partner with Embargo Situation feature.

Import Classifications

Another task that falls to the importer is classification — the act of placing goods into the correct category. Classification determines how much duty to collect and it is more than simply looking up items in an index. This complicated process requires applying the General Rules of Interpretation including the section, chapter, subheading notes, and explanatory notes as needed.

The US International Trade Commission issues the Harmonized Tariff Schedule (HTS) prescribing the classification of merchandise by product type — animal and vegetable products, or textile fibers and textile products, etc. All imported goods in the US and many other countries are categorized according to the HTS, and the importer is responsible for determining imported merchandise classification numbers.

In the GTS Customs Management: Classification cockpit, use the Classify Products option on the Classification with Tariff Code Numbers tab (Figure 2) to assign classifications to products. Alternately, you can use transaction code /SAPSLL/PR_CUSTOMS02. You can also use this cockpit to track import classifications.

Figure 2

The GTS Customs Management: Classification screen helps sort imported goods

Via the Maintain Tariff Code Numbers option on the Customs Tariff Numbers tab, you also can maintain classifications or HTS numbers. If you have a content provider such as Federal Express for tariff numbers or duty rates, you can also use Load Tariff Code Numbers feature to load the relevant HTS codes into the system.

Figure 3 shows HTS codes in the system arranged by Chapter/Heading/Sub- heading. HTS codes are valid based on date and are used during the product classification. You can populate official, commercial, and keyword text for HTS codes. You can also indicate if the HTS code is country-dependent or independent.

Figure 3

Maintain and assign HTS codes

Duty Rates

Importers must declare the dutiable value of their merchandise. In the US, the customs service does the final appraisal using several methods to arrive at a value. The transaction value serves as the primary basis for appraising merchandise. It is the price actually paid or payable by the buyer to the seller for the imported goods. Other factors may also add to the dutiable value of merchandise, such as packing costs, selling commissions, royalty or licensing fees, etc.

Custom duty rates are managed from within the GTS Customs Management: Master Data cockpit (Figure 4) with the Customs Duty Rates tab. Use the master data icon to access the GTS Customs Management: Master Data screen. If you have a content provider like Federal Express for duty rates, you can use the Upload Customs Duty Rates option within the Customs Duty Rates tab.

Figure 4

GTS Customs Management: Master Data screen controls duty rates

The Customs Duty Rates tab tracks duty rates for HTS codes and displays the required details for maintaining them against HTS codes. Using the maintenance screen shown in Figure 5, you can set Valid From and Valid To dates for a duty, and there are also fields to enter values for the Calculation Base (weight, volume, or value in percentage), Amount, Price Unit, and Percentage. The screen also allows you to accommodate any complex rate for calculation and different notes as descriptions.

Figure 5

Maintain customs duty rates

When Goods Arrive

Countries don't allow imported goods to legally enter markets until a shipment arrives at the port of entry and customs has authorized delivery of the merchandise. This normally happens after the importer or the importer's agent files all the appropriate documents. To expedite the process, importers can present entry papers before the merchandise arrives, but entry will not occur until the merchandise arrives within the port limits. While this practice may vary from country to country, it is the norm.

The customs service in the US and many other countries defines "entry" not merely as the arrival of goods at a port, but also the process of clearing goods through customs. The US customs service sends imported merchandise that did not clear customs in a timely manner (within 15 calendar days of arrival) to a general-order warehouse to be held as unclaimed.

As soon as a product ships, importers need to send data for clearance and prepare for customs. Importers can supervise customs entry with the GTS Customs Management cockpit (Figure 6). The GTS Customs Management: Customs Processing for Import/Export screen is accessed from the GTS main cockpit via transaction code /SAPSLL/MENU_LEGAL, or in the GTS Customs Management screen, select the customs processing option. This cockpit performs the following actions:

• Manually create a new customs shipment (export or import)
  
  
• View/edit all inbound (import) activities and procedures
  
  
• View/edit all outbound (export) activities and procedures

Figure 6

Manage goods arrival with the GTS Customs Management: Customs Processing for Import/Export screen

Activities Processing

Users can view all activities and sort them by activity type across a global enterprise in the SAP GTS inbound activities cockpit (Figure 7). It is accessed from within the GTS Customs Management: Customs Processing for Import/Export screen under the Operative Cockpit tab. In the Import section, there is an option for Inbound Activities. Here, different users can quickly view the status of various customs entry types such as Entry for Consumption.

Figure 7

GTS cockpit to process customs activities

Customs Shipment Cockpit

The GTS customs shipment screen allows users to see data that creates a customs shipment document for inbound processing (Figure 8). Notification is often sent by way of a delivery note, proforma invoice, or commercial invoice, which is used to notify an importer that a shipment is arriving. Overseas advanced shipment notification generates customs documentation, which triggers the required transaction to send the import documentation and electronic file to the broker. This helps the broker review the information before arrival and submit an advance notice to customs.

Figure 8

GTS customs shipment entry screen

To view and update the transport details associated to the inbound shipment, use the Transport tab within the customs shipment screen. The mode of transport (MOT), port of departure (POD), port of entry (POE), and date parameters required to create the valid customs clearance documentation can be set on this tab.

Use the Invoice Data tab within the customs shipment screen to view and update the invoices associated to the inbound shipment. This information is necessary to support the customs documentation.

On the Communication tab within the customs shipment screen, you can view and update the creation of documents, alerts, and electronic messages associated to the inbound shipment. Users can see the documents that will be generated for the current shipment and the status of those documents as well as manage the distribution of the documents and electronic communication to external parties.

Formal Goods Entry

To make or file a consumption entry for imported goods going directly into the US with no time or use restrictions placed on them, the following documents are generally required:

• A bill of lading, airway bill, or carrier's certificate (naming the consignee for customs purposes) as evidence of the consignee's right to make entry
  
  
• A commercial invoice from the seller that shows the value and description of the merchandise
  
  
• Entry manifest (customs form 7533) or entry/immediate delivery (customs form 3461)
  
  
• Packing lists (if appropriate) and other documents necessary to determine whether the merchandise is allowed into the country

Figure 9 shows one of the forms that the customs entry functionality produces — form CH 3461 for entry/immediate delivery. GTS Customs Management functionality produces this type of documentation, which can be filed electronically via EDI with US customs, if you have the Automated Broker Interface with Customs. The same customs entry can also generate other forms based on GTS data, such as form 7501, entry summary for the treasury.

Figure 9

US customs form CH 3461 is just one of many that can be filed electronically via EDI with GTS

Rajen Iyer

Rajen Iyer is the cofounder and CTO at Krypt, Inc. Rajen has written several in-depth, best practice articles, white papers, patents, and best-selling books on SAP Logistics and SAP Global Trade Services, including Effective SAP SD and Implementing SAP BusinessObjects Global Trade Services. He is also an invited speaker at industry conferences.

You may contact the author at Rajen@kryptinc.com.

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