log10 – import and export compliance latam

LOG10 – Import and Export Compliance

LOG10

This course provides a broad insight into the Import and Export compliance process within SAP Target AudienceThis course is intended for the following audiences: Customer Service Reps Customer Service Management Trafic Control Employees

Course PrerequisitesAs a prerequisite to this course all participants should have taken the following courses: Basic Navigation (SAP01) Organizational Structures (SAP10) Logistics Execution Overview (LOG01)

Course Overview

The aim of this course is to provide you with the knowledge and skills required Import and Export compliance processes. Upon completion of this course, you will be able to: Process Sanctioned Party Hits Process ECCN Licensing Requirements

Course Objective

Course Agenda: Lesson 1 - Introduction / Concepts in Import/Export Compliance Lesson 2 - Sanctioned Party Screening Lesson 3 - ECCN Licensing

Approximate course time: 6 hours

Course Content

INTRODUCTION / CONCEPTS IN IMPORT/EXPORT COMPLIANCE

Lesson 1:

Lesson Objective

At the end of this lesson, you should be able to: Understand processes and terminology associated with Import/Export

Compliance in Global Trade Services (GTS) Locate FCC & FDA codes Locate HTS & ECCN codes

WARNING

In order to be more compliant and avoid fines, new processes are put in place to insure a stricter and more complete Import/Export compliance towards the Governments. We are aiming to improve our procedures and monitor closer or business

General information

General Rules

• An order will simultaneously go under credit and GTS check. None are correlated and therefore will be dealt separately. An order can then be released from GTS but still blocked by RFS and vice versa.

• An order blocked will prevent the delivery to be created, therefore no delivery will be created if there is a GTS block. A single line can block the full order. On the SO overview, you will have the general order status but the actual GTS block will have to be check on the item level in the Status Tab clicking on the Obj. Status

General information

General Rules

• The only logical system group use by ScanSource in GTS is GRPLOGSYS

• Some classifications (ECCN) will be common to all ScanSource offices but other will be country specific (HTS)

Processes and Terminology Associated with Import/Export Compliance in Global Trade Services (GTS)

Global Trade Services

• Export Management – trade regulations and localizations

• Import Management – Importer security filing, duty calculation and many others

• Preferential and Free trade agreement – Reduce duty and taxes payments and manage vendor and customer declarations

• Single data repository – Centralize master, classification and compliance data

• Regional and Industry compliance – Automate compliance


Global Trade Services

• As you could see in the previous slide, the services offered by GTS are wide. ScanSource is currently actively using the two below parts; it could be reviewed in the future


Global Trade Services – Main Menu

• For security and audit reason, the employees will have access only specifically to the t-codes they will be using to complete their job. Yet, it’s nice to have an overview on the general menu to see all the available options

Locate FCC & FDA Codes (US Only)

FCC

• Federal Communication Commission

• Six goals in the areas of broadband, competition, the spectrum, the media, public safety and homeland security

• Responsible for managing and licensing the electromagnetic spectrum (mobile wireless, television, radio, satellite and other services)

FDA

• Food and Drug Administration

Locate FCC & FDA Codes (US Only)

FCC & FDA

• T-code /N/SAPSLL/PRODUCT_02 /N/SAPSLL/PRODUCT_03

• General Information Display Customs Product Master Notions are displayed on the ScanSource tab as this was a customized

requirement ScanSource tab is displayed the MFG address too

HTS

HTS

• Names Harmonized Tariff Schedule (HTS) Harmonized system Commodity code Trade Tariff

• T-code /N/SAPSLL/PRODUCT_01 (Not used as created in ECC) /N/SAPSLL/PRODUCT_02 (Classification Tab) /N/SAPSLL/PRODUCT_03 (Classification Tab)

HTS

HTS

• General Information The classification is performed upon material master creation by the responsible

users. Without classification, the system will block some transactions from running correctly

Classification of the products mainly used to calculate the customs duties, monitor import/export quotas and controlled goods flow (narcotics, weapons, endangered species…) , collect the international trade statistics and taxes, impose the required licenses and helps during the negotiation of international agreements

In Europe, the HTS classification is closely linked to the Intrastat. To be compliant to the EU regulation, each company should be able to provide an Intrastat declaration. As there is a free trade agreement between the countries, there are no longer customs declarations. It helps the government to monitor the movements in-between the member states. On a ScanSource point of view, FICO must provide a report to the Belgian Government every month.

HTS

HTS

• General Information Internationally recognized and maintained by World Customs Organization A lot of useful and detailed information can be found on

https://www.wto.org/english/tratop_e/tariffs_e/tariff_data_e.htm Usually between 8 and 10 digits number according to the countries / 21 sections

and 96 chapters for over 17000 unique codes

HTS

HTS

• General Information The full list of Tariff Numbers is available in GTS but only specific codes

will be used. In our business we usually use codes from Chapter 84 and 85.

The HTS must be provided by the vendors. Often they will provide the 8 digit codes, we would then recommend to use the subdivision Other would need to be selected for the last two digits

The classification of a product cannot be amended upon customer request. In case there is a demand, you will have to contact the vendor to have the commodity code verified and confirmed. It is strictly prohibited to modify an HTS to reduce the customer’s customs fee

ECCN Codes

ECCN

• Name Export Control Classification Number

• T-code /N/SAPSLL/PR_PRCON_02 (Legal Control tab) /N/SAPSLL/PR_PRCON_03 (Legal Control tab)

• General Information The classification is performed upon material master creation by the responsible

users. Without classification, the system will block some transactions from running correctly

ECCN Codes

ECCN

• General Information Based on the nature of the product (type of commodity, software, technology and

technical parameters). Once the ECCN has been identified, the reasons for control of the item, which transaction may require an export license based on the country of destination, and which license exceptions, if any, may apply. Due to the above explanations, you need to bare in mind the ECCN might undergo changes in case of a technology change

5 character alpha-numeric designations used to identify dual-use items The ECCN must be provided by the vendors. When the material is not listed on the Commerce Control List, it will be set EAR99

as a general category. They generally ship under designation “No License Required”. Some countries might request extra licenses to be able to import the products; also, ScanSource would need an Export license to send those products to Embargoed or Sanctioned Countries. More information available on http://www.bis.doc.gov/index.php/regulations/export-administration-regulations-ear

http://www.bis.doc.gov/index.php/regulations/export-administration-regulations-ear

http://www.bis.doc.gov/index.php/regulations/export-administration-regulations-ear

ECCN Codes

ECCN

SANCTIONED PARTY SCREENING

Lesson 2:

Lesson Objective

At the end of this lesson, you should be able to: Understand SPL View & Review Blocked documents or Business Partners Release blocked documents or Business Partners

Sanctioned Party Screening

Sanctioned Party Screening

• T-codes /N/SAPSLL/SPL_BLBPLO /N/SAPSLL/SPL_BLCD

• General Information The Legal Regulation name is SPLUS As ScanSource is a US based company, we have the obligation by law of screening of

parties involved in a commercial transaction. We need to meet the safety standards of the US Government

The check includes denied parties, controlled products, embargoed and sanctioned countries.

Previously called denied party screening, the check was only done on the sold-to and the ship-to. Nowadays the data controlled is more spread in order to avoid fines, penalties and sanctions if we would ship products to dangerous entities or countries

When searching a Sales Order, you need to know that in GTS it’s considered as a Reference Number while the GTS document number is a internal number generated by GTS

Sanctioned Party Screening Sanctioned Party Screening

• General Information ScanSource has a contract with a third party company in order to have accurate

and legal reference data. MK Data is the service provider which is providing through an interface new files as often as the list is renewed. The files are sent a nightly basis almost every night

SPL will also monitor the embargoed countries to prevent us from shipping there. Those countries are currently Cuba*, Iran, North Korea, Sudan and Syria

* To be followed due to open new openings between USA and Cuba

Sanctioned Party Screening Sanctioned Party Screening

• General Information SPL check is part of the compliance management subdivision of GTS

Blocked Documents or Business Partners

Display Blocked Business Partners for Sanctioned Party Screening

• T-code /N/SAPSLL/SPL_BLBPLO

• General information Business partners are all the components of a transactional operation, including

vendors, customers, contacts, etc. The first line of verification is the business when creating the master data in

ECC. They will check the background and information of the partner they create in the system

• Steps to clear the blocks Log into GTS and access the transaction code



• Steps to clear the blocks Run the transaction, clicking on execute

Select the business partners to be cleaned up and released. We consider the check done by the business



• Steps to clear the blocks Click on release partner and confirm you want to release them

Provide the reason of the release and click on transfer. It will clear the list and you have completed the clearance



• T-code /N/SAPSLL/SPL_BLCD

• Steps to clear the blocks Run the transaction, select SPLUS as a Legal Regulation, your foreign trade

organization (corresponding to the company code) and Object type BUS2032 then run the report



• Steps to clear the blocks The SPL Screen column will be showing red if blocked due to Denied Party

Select the line you want to review and run the check Double-click on the blocked line, it will display the Details for Partner’s Sanctioned

Party List Entry. The screen displays the supposed match references. You will then need to double-click on the line to see which word has been triggered by MKData. This is the detailed Analysis for Sanctioned Party List Entry. This would allow you to check any other supposed spelling and the match percentage. The percentage might not be a full stopper. Each case must be analyzed cautiously



• Steps to clear the blocks



• Steps to clear the blocks Common sense should be your first check. In case of doubt, you can use the

modern tool like internet to find information about the partner. Do not release in case of doubt and contact your manager to ask for advice

Once you are convinced the SO can be released, select the blocked line and hit the Release button



• Steps to clear the blocks Mention the reason of the release and click on transfer. It will clear the list and you have

completed the clearance

Repeat for each blocked line and save the SPL control you have just performed



• Warning

Caution when releasing a Business Partner or a Document.

In case of a doubt, check with your manager and never release a

SO for an Embargoed country

ECCN LICENSINGLesson 3:

Lesson Objective

At the end of this lesson, you should be able to: Understand ECCN and the process View & Review Blocked documents Add a license

ECCN Licensing

ECCN LicensingECCN licensing

• T-codes /N/SAPSLL/LCLIC05_EXP (Assigned export documents) N/SAPSLL/BL_DOCS_EXP (Blocked export documents) /N/SAPSLL/CD_DISPLAY (Display Determination Strategies) /N/SAPSLL/LCLIC01 (Create Licenses) /N/SAPSLL/LCLIC02 (Change Licenses) /N/SAPSLL/LCLIC03 (Display Licenses) /N/SAPSLL/LCLIC_MAIN (General Licenses)


• General Information The Legal Regulation name is EAR which stands for Export Administration

Regulation ScanSource has a contract with a third party company in order to have accurate

and legal reference data. MK Data is the service provider which is providing through an interface new files as often as the list is renewed. The list is usually reviewed yearly

A SO will be subject to GTS checks which are independent one from the other. It can be immediately go through SPL but being stuck for an ECCN issue

As they are WW data stored, we recommend to restrict the search by inserting criteria

When searching a Sales Order, you need to know that in GTS it’s considered as a Reference Number while the GTS document number is a internal number generated by GTS


• General Information ECCN control is part of the compliance management subdivision of GTS

ECCN Licensing

ECCN Licensing – Assigned Export Document

• T-code /N/SAPSLL/LCLIC05_EXP

• General Information When an SO is created in ECC, it’s immediately sent over to GTS in order to

compare the data to the existing licenses provided by MK Data. When the data is compliant to the legal regulation determination recorded in the system, the license will instantly be assigned to the document. An compliant order will be released and will be authorized from shipment

This transaction will display all the documents contained in a license. The compliancy is based mainly on the ECCN from each product and the destination country

Useful to make governmental reports in order to establish the declaration the value related to ECCN leaving the country

ECCN Licensing


• Steps to follow Log into the transaction Mention EAR into the Legal Regulation field Restrict the search by inserting criteria Execute the Report

ECCN Licensing


ECCN Licensing

ECCN Licensing – Blocked Export Documents

• T-code /N/SAPSLL/BL_DOCS_EXP

• General Information This transaction is where the daily monitoring is done. It is displaying all

documents blocked by GTS due to a missing or partial license or incomplete classification of the product. You will need to review the document and regulation assignments

It’s capital to understand this also affects order shipping within the our countries and not only exportations. National orders could be block to and need to be verified too

The report uses a system of green and red lines to draw the attention to the specific issue. It will be important to understand where the problem is and the type of block. When you have a red line in the control column, you are facing an issue related to ECCN

ECCN Licensing


• Steps to follow (Report) Log into the transaction Mention EAR into the Legal Regulation field Select your Foreign Trade Organization Select BUS2032 in Object Type (to restrict) Execute the Report

ECCN Licensing


ECCN Licensing


• Steps to follow (1) Now that you have identified your documents in issue, you will have to identify

the reason of the block Start by selecting the document line you want analyze and click on the glasses

icon to identify which line in causing the block. As mentioned one line will block everything

ECCN Licensing


• Steps to follow (2) You know now which line is in error, so you will have to step back to access the display

log which will provide the detailed description

You will need to track down the red lights till you have reach the full error description. It will also provide you also all information you need to update the license or the product. You will have the type of license, the date when the check was completed, the product number, the ECCN and the destination countries. On a early stage, we were also filtering the partner but as we were also making a SPL background check on them, it was redundant.

ECCN Licensing


• Steps to follow (3)

ECCN Licensing


• Type of blocks and resolutions In case of a license issue with message “could not find import/export license”,

you will need to change the license specified in the log. A refresh of the screen will manually assign the updated license to the document

In case of a shipment for free goods, there is a specific license which will apply. The error in the log will be “values couldn’t be determined”. You will need to maintain the zero value license and manually assign the license to the document

In case of a missing product classification, you will need to inform the Product or Asset Manager to duly classify the ECCN

To resolution of those issues are mentioned in the upcoming slides

ECCN Licensing

ECCN Licensing – Licenses Determination

• T-code /N/SAPSLL/CD_DISPLAY

• General Information Display Determination Strategies will display the rules specified by license type

and by country. It will help to identify which products are authorized for a specific country

It will also display all licenses available for the destination country by ECCN numbers

ECCN Licensing

ECCN Licensing – Licenses Determination

• Steps to follow Log into the transaction Mention EAR into the Legal Regulation field Fill country of departure/destination In case you know the ECCN, fill control list number Execute the Report

ECCN Licensing

ECCN Licensing – Create, maintain and display licenses

• T-code /N/SAPSLL/LCLIC01 /N/SAPSLL/LCLIC02 /N/SAPSLL/LCLIC03

• General Information In case none of the existing license is sufficient to automatically assign to

documents, ScanSource has decided to have general licenses created. In order to have the a correct flow in the business and to prevent the orders from being stuck for too long, those license will have specific denomination. The usage of those licenses are regularly reviewed by some managers in operations

As Europe is the first office to operate due to time difference, they will usually be the office creating the monthly license. Other location will only update the existing licenses. Those ScSc made licenses are WW

Those licenses are usually created for trusted countries

ECCN Licensing


• General Information Nevertheless, some destination countries or some product lines are more tricky

to handle. Especially, the category dual use which could be used as well for civil use than for military purpose. In case of doubts, you will have to follow the process exposed in the flow chart we saw earlier

When the license approval needs to go through the government way, the request must be recorded in GTS. Once approved you will need to convert the request into a proper license. It’s indispensable to record and track each license. This process can take months for being completed. This must remain an exceptional procedure as we would prefer to rely on pre-obtained licenses

Sometimes, vendors have gone through the governmental process and have agreed for us to use them. They have been created in the system and are updated when the vendors inform us. They will provide us with the product number, the ECCN and the authorized destination country

ECCN Licensing


• Steps to follow (Creation - 1) Log in the creation screen Select EAR as legal regulation The license type is generally IVL Import/Export License is the name to be given to the license. When creating the

monthly general license, it needs to follow the WW common naming convention YYYYMMDD-USD. USD has no impact on the currency as not checked

In case you have expired the previous license, you can still copy information from it by using it’s name as a template. It will import data to the new license avoid you to manually have to insert data

Hit Enter

ECCN Licensing


• Steps to follow (Creation - 2) Insert your external number where requested. When creating a vendor or a

governmental license, you will use the number provided by the institution. When creating an internal ScanSource license, you can use the YYYYMMDD-USD name

Select the validity of your license. Keep in mind to have larger dates than the month because the date of check might not be included it the release month. If you restrict too much the validity date, you will increase the number of hits and you will have to extend many time the validity

ECCN Licensing


• Steps to follow (Creation - 3) In the status box, you will need to go through three status to have your license

correctly activated. License created is automatically done when you perform the previous steps; you need then to click on license application submitted as you would be doing for a governmental license. Finally complete this step by selecting License active; be careful not to select license expired because there is no way back. There is a record of each modification

In case it’s a governmental license, do not activate until official confirmation

ECCN Licensing


• Steps to follow (Creation - 4) We now need to establish the check attributes in the left column as follow. First

the maximal value of the license, use 999.999.999.999.999,00USD

Second step is to include the material which will be authorized under this license. Use the insert row for each material and mention the usual Logical System Group GRPLOGSYS

ECCN Licensing


• Steps to follow (Creation - 5) Now, the control classes field will allow you to include the ECCN to be authorized

by the license. Insert a row for each of them.

Be careful, the format of the ECCN is case sensitive and must match the master data. Any error will trigger the below message

ECCN Licensing


• Steps to follow (Creation - 5) The final data to maintain is the country of departure and destination. Make sure

your own country is always listed as well as the country you are shipping to

Save the license and you are done

ECCN Licensing


• Steps to follow (Change - 1) You will need to maintain the license in some occasion. Prior to create your new

license, you will need to expire the existing license to avoid conflicts and save

Another case you will have to update a license is when you need to add information to it when you have the error “could not find import/export license” in the check results. You will need to add any of the non listed materials, ECCN, Departure/Destination Country and check that the date of the check is within the validity period

ECCN Licensing

ECCN Licensing – Manually assign a license

• Steps to follow (1) Some license types, mainly zero values licenses, will not be automatically

assigned to the document and therefore you will need to manually do it from your display blocked export document screen

Select the document for which you have just completed the license update and click the change control data button

ECCN Licensing


• Steps to follow (2) As the log is providing you the information about the license, you only need to

look for it in the list

ECCN Licensing


• Steps to follow (3) Click on the specific license and click on adopt license for item button Validate your choice in the window that has just appeared and save. Refresh

your display document screen and click on the green mark of the validation pop up screen

Questions

Course Summary

After completing this course you have learned to:

Understand EAR regulations Process Sanctioned Party Hits Process ECCN Licensing Requirements

COURSE END

THANK YOU