Run Better in China with SAP Global Trade Services
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1 SAP Brief SAP s for Governance, Risk, and Compliance SAP Global Trade Services Objectives Run Better in China with SAP Global Trade Services
2 Enable secure and efficient foreign trade Enable secure and efficient foreign trade Trade in China represents a great opportunity, but it is also complex and regulatory driven. Getting every shipment right calls for the right balance of people, processes, and technology. The SAP Global Trade Services (SAP GTS ) application provides an ideal foundation for trade management improving existing processes and enabling people to work smarter and more efficiently. To maintain profitability and sustainability, companies are working to prevent inefficiencies and compliance failure. By removing manual, paper-intensive processes, the supply chain can operate with greater speed by decreasing human errors and keeping costs down. All the while, companies are addressing China s desire to tighten compliance enforcement, which includes higher fines and penalties. With SAP GTS, you can automate many compliance activities even as regulations change. It supports comprehensive, automated compliance checks with management by exception and alerts stakeholders of transactions that do not meet defined policies and parameters. As a result, you can help ensure ontime shipments and improve the bottom line. The application works effectively with most back-end systems and supports more than 25 certified interfaces for customs and govern ment agencies that are opening trade beyond China. This not only enables cost savings, but it also opens up new markets more quickly. 2 / 10
3 SAP GTS lays the foundation for effective trade compliance by acting as the single system of record for all compliance master data and content. Product master records contain all necessary classifications for automated global trade transactions. These include the Harmonized Commodity Description and Coding System (HS) as well as custom supervision codes and declaration elements such as those related to Customs, Immigration, and Quarantine (CIQ) and the Ministry of Commerce (MOFCOM). Chinese descriptions can be stored for each product while maintaining master data for refunds for export valueadded tax (VAT), which requires a link to the HS code. As a global and scalable platform, SAP GTS supports multiple numbering schemes for the same product based on legal regulations of the relevant countries and customs involved. For example, you may need to maintain many classifications for each product to accommodate various authorities such as the integrated tariff of the European Union, harmonized tariff schedule, and export control classification numbers. Support mass product classification and reclassification to increase user productivity and keep product classifications up-to-date. 3 / 10
4 Whether conducting international or domestic trade, companies should only deal with acceptable business partners. Because there is no single authority for sanctioned-party lists, companies are compelled to screen against multiple lists authored by government and nongovernment entities. Sanctioned-party screening is not new, but today s speed of business, heightened security concerns, and increased penalties have amplified its importance and complexity. When considered within the sobering light cast by global terrorism, sanctioned-party screening is more important than ever. When a transaction fails to meet a compliance check, SAP GTS flags it for review and, if desired, blocks it from proceeding any further. Worklists enable efficient processing of blocked documents and partners and support userfriendly workflows that escalate questionable entries to authorized business users for final resolution and entry into the audit trail. Screen sanctioned-party lists by running real-time compliance checks across sales, finance, human resources, procurement, and distribution. 4 / 10
5 Managing import and export processes is a high-risk proposition with evolving Chinese customs and regulations. Companies must protect themselves from noncompliance and achieve visibility and control to avoid delays, lost sales due to unavailable materials, or higher inventory-carrying costs. Since SAP GTS integrates directly with SAP Business Suite applications and other business software, all global trade transactions are automatically checked for compliance and proper import or export controls. The application supports embargo screening, license determination and management, letter-of-credit checks, and hazardous material checks. SAP GTS makes it easier to generate and manage Chinese customs documentation. All relevant data is automatically available for reporting to appropriate authorities. In addition, you can quickly generate the right documentation for specific transactions with complete traceability from customs declarations to certificates of origin or packing lists. The application simplifies the calculation of a variety of duties, taxes, and fees. With the functionality for export VAT refunds, exporters can recover part of the tax incurred on their goods and maintain the refund rate by providing a transparent and efficient process. 5 / 10
6 Over the last few years, processing trade in China has increased dramatically. Companies are complying with Chinese processing-trade regulations by performing reconciliations, managing customs bills of materials (BOMs), tracking inventory, and matching declarations with business transactions. SAP GTS, processing trade in China, can help you mitigate risk and reduce duties by centralizing processingtrade activities. At the same time, it improves efficiency by automating imports, exports, and e-manual management. Enable your IT organization to step up its efforts in optimizing processes for Chinese enterprises. The application helps ensure prompt conversion of materials from the internal operation to the customs BOM while updating these BOMs in case of any engineering or design changes. With deep integration with enterprise resource planning solutions, SAP GTS accurately depreciates BOM quantities for each export and import. This seamless, integrated process leads to proper inventory reconciliation. You can apply comprehensive reporting functionality such as e-manual reconciliation, bonded materials, shipment traceability, and pending import and export reporting to explain potential surpluses and shortages. 6 / 10
7 SAP GTS supports strategic bonded warehousing procedures for example, instances when you need to import goods and store them under customs control in a designated bonded warehouse prior to paying import duties and taxes. The application automatically detects whether a product should be stored in a bonded warehouse and tracks the duties payment status of goods. It supports subsequent procedures such as reexportation, release to domestic markets, and scrapping. You can also fully integrate SAP GTS with logistics processes and multiple monitoring features. The application also supports the processing of foreign trade zones without substantial transformation, value change, or tariff shift with bonded warehouse functions. Your global business can use the same platform to take advantage of a variety of customs duty-saving practices such as inward processing relief, outward processing relief, and processing under customs control. Minimize and defer the payment of import duties and efficiently manage your bonded warehouses in China. 7 / 10
8 Preferred and free trade (FTAs) offer lower duty rates to participating countries or customs regimes. While the growth of Chinese FTAs is anticipated to grow significantly, there are also in place with countries such as Chile, Costa Rica, New Zealand, Switzerland, and the Association of Southeast Asian Nations. SAP GTS uses content-based rules of origin in preferential trade to determine which products are eligible for reduced import duty rates. The application streamlines and automates the process of preference determination including requesting vendor declarations, managing their collection and maintenance, calculating product origin based on agreement rules, and issuing customer certificates of origin. Multiple trade can be managed smoothly while leading to significant savings for your company. Prove the origin for preferential treatment by managing documentation and calculating the origin of products quickly and accurately. 8 / 10
9 Protect your company and customers from global trade risks Protect your company and customers from global trade risks With SAP GTS, companies can reduce the cost and risk of international trade by helping to ensure compliance with Chinese regulations, accelerating trade activity, and minimizing duties and landed cost. BENEFITS Increased supply chain efficiency Maximized profitability from global trade Improved customer satisfaction ENABLING FEATURES Automated application of extensive Chinese trade regulations Comprehensive process automation for general and processing trade Management by exception through risk thresholds, workflows, and automated alerts Customs duties and VAT savings by automating processing trade Adherence to free trade Tracking of input and output of goods in bonded warehouses Efficient process for export VAT refunds Rapid clearing inbound and outbound customs to deliver products on time Global supply chain visibility and transparency Automated free trade for more competitive pricing and reduced costs Expedite the global supply chain by applying schemes such as the Authorized Economic Operator or Customs-Trade Partnership Against Terrorism. 9 / 10
10 Objectives Summary With the SAP Global Trade Services (SAP GTS ) application, you can centrally manage exports and imports in China and provide a single repository for all compliance master data and content. On premise or in the cloud, you can deploy the application as stand-alone or as a part of SAP solutions for governance, risk, and compliance. SAP GTS integrates with supply chain, financial, and engineering systems expediting global trade and minimizing trade violations. Objectives Confidently manage global trade within Chinese customs regimes Create a single system of record for all compliance master data and content Automate global regulatory compliance with management by exception Centralized master, classification, and compliance data Automated trade documentation, duty calculations, letter-of-credit checks, and compliance checks to help manage the entire process Facilitate a complete process for processing trade from creation to reconciliation Functionality for automated bonded warehousing Support for Chinese and global preferential trade Automate global trade compliance Accelerate the supply chain Minimize violations Refund value-added tax for exports Learn more To find out more, call your SAP representative today or visit us online at 10 / 10 Studio SAP 33785enUS (14/11)
11 No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP SE or an SAP affiliate company. SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP SE (or an SAP affiliate company) in Germany and other countries. Please see for additional trademark information and notices. Some software products marketed by SAP SE and its distributors contain proprietary software components of other software vendors. National product specifications may vary. These materials are provided by SAP SE or an SAP affiliate company for informational purposes only, without representation or warranty of any kind, and SAP SE or its affiliated companies shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP SE or SAP affiliate company products and services are those that are set forth in the express warranty statements accompanying such products and services, if any. Nothing herein should be construed as constituting an additional warranty. In particular, SAP SE or its affiliated companies have no obligation to pursue any course of business outlined in this document or any related presentation, or to develop or release any functionality mentioned therein. This document, or any related presentation, and SAP SE s or its affiliated companies strategy and possible future developments, products, and/or platform directions and functionality are all subject to change and may be changed by SAP SE or its affiliated companies at any time for any reason without notice. The information in this document is not a commitment, promise, or legal obligation to deliver any material, code, or functionality. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates, and they should not be relied upon in making purchasing decisions.
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