01 Nov Implementing SAP Global Trade Services: How a Licensed Customs Broker Can Help
Picture this: Domestic sales are great. Foreign markets offer the opportunity to grow, and you’re primed to tackle global trade. You run your business on SAP, and building on that foundation to support global trade is the right strategy. Product development, marketing, finance, IT, compliance, legal, procurement, and distribution are closely involved in your global business plan; you’re putting the pieces of the global trade puzzle in place and one of your major projects is implementing SAP Global Trade Services (GTS). At this point we’d like to make a recommendation based on more than twenty years of SAP consulting: hire an implementation team that includes a licensed customs broker (LCB) on staff.
Implementing SAP Global Trade Services? Include an LCB
With a special focus on Global Trade Services, project after project, we’ve seen the value that a licensed customs broker provides. As a member of a team implementing SAP Global Trade Services, a licensed customs broker complements other team members with skills and experience that include:
- Expertise gained from the preparation for and passing the CBP Customs Broker License Examination;
- In-depth knowledge of global trade regulations that govern your trade practices;
- Practical knowledge of brokerage practices;
- Hands-on understanding of SAP GTS functionality and proper application of its capabilities; and
- Ability to translate regulations into actions that can reliably be executed by SAP GTS.
The result of having these skills on the team is faster implementation time, optimized utilization of SAP GTS functionality, and adoption of best practices to ensure global trade compliance. A licensed customs broker helps you by identifying and applying relevant regulations, translating regulations into actions via GTS functionality to aid global trade efficiency and compliance, and providing guidance throughout the implementation on specific nuanced aspects of trade processes.
Identify and Understand the Relevant Regulations
Without specialized knowledge of all the applicable trade regulations (NAFTA to USMCA) and their occasionally-changing details, it’s a challenge to know exactly which ones and which sections govern your global trade activities. As part of the team implementing SAP Global Trade Services, a licensed customs broker will assess your specific needs and identify the relevant regulations, depending on the products you are shipping and the countries you trade with. Regulations most likely to apply to your global trade practices include:
- Harmonized Tariff Schedule that defines tariff rates and categories for merchandise imported into the United States. Accurate classification of products according to this schedule is fundamental to compliant trade practices.
- U.S. Department of Commerce Bureau of Industry and Security regulations covering a wide range of industry-specific trade regulations.
- FDA regulations regarding human and veterinary drugs, vaccines and biological products, medical devices intended for human use, radiation-emitting electronic products, cosmetics, dietary supplements, and tobacco products.
- U.S. Department of Agriculture regulations regarding produce, meat, poultry and egg products, and animals.
- U.S. Department of Commerce Bureau of Industry and Security Lists of Parties of Concern that contains companies, entities, or persons for which there is strict export prohibition, a specific license requirement, or the presence of a “red flag” that requires due diligence regarding appropriate end-users, end-use, or final country of destination.
- International Traffic in Arms Regulations (ITAR) govern the export and import of defense-related articles and services.
The documentation that details each of these regulations can be voluminous, if not overwhelming. A licensed customs broker guides you through this regulatory jungle, letting you know what to pay attention to and what to ignore, based on your unique global trade requirements.
Transform Regulations Into Compliant Actions
Having identified the regulations that pertain to your trade practices, your GTS implementation team then focuses on implementing SAP Global Trade Services functionality that ensures compliance with the regulations. In this process, a licensed customs broker’s granular knowledge of regulations and SAP GTS functionality is critical to implementation success. That includes:
- Properly classifying items you are shipping using the Harmonized Tariff Schedule to determine the correct valuations—from source to finished product—and accurately calculating duties and fees;
- Reviewing item classifications and determining if shipments qualify for special trade agreement preferences such as the U.S.-Mexico-Canada Agreement (USCMA);
- Setting up SAP GTS processes to properly prepare the required documentation to avoid delays, fines, or confiscation of items. Documentation can include commercial invoices, special forms for goods regulated by federal agencies, inspection certificates, customs declarations, export licenses, formal entry summaries, and Importer Security Filing “10+2”;
- Configuring SAP GTS integration with government systems that facilitate compliant trade processes and electronic filing of information
- Employing SAP GTS functionality for real-time compliance checks and control across lines of business involved in your global trade activities;
- Establishing an efficient process for obtaining drawbacks in the event imported or exported goods must be returned to the supplier; and
- Determining records retention policies for documents and communications involved in trade activities.
There are many areas in a supply chain where failure to comply with global trade regulations can result in considerable fines, penalties, or sanctions. The best way to prevent all of that is to ensure you’re using the full extent of SAP Global Trade Services to implement compliant processes. Only team that includes a licensed customs broker combines the experience, skills, and knowledge that span the business, compliance, and technical requirements needed to establish compliant global trade processes.
LCB Services, Included in your SAP GTS Implementation
If you’re about to begin a global trade initiative or recognize that your current global trade processes need improvement, you’ll benefit from licensed customs broker expertise on your SAP GTS implementation team. Aurum Terra knows the value of licensed customs brokers. They are critical members of our implementation team and key to successfully implementing SAP Global Trade Services.