SD2015 – SD Foreign Trade v 1.

India SAP CoE, Slide 1

Foreign Trade…?

Exchange of Goods and Services across the

international boundaries and territories

Significant Share of GDP

Increase in Foreign Trade is basic to Globalization.

India SAP CoE, Slide 2

SD Foreign Trade
1 PrepareMe

2 TellMe

3 ShowMe

4 LetMe

5 HelpMe
India SAP CoE, Slide 3
SD Foreign Trade
1 PrepareMe

2 TellMe

3 ShowMe

4 LetMe

5 HelpMe
India SAP CoE, Slide 4
Purpose
Manage import and export processes, integrating them efficiently into the
supply chain
Automatically identify licensing requirements for importing and exporting
goods based on current regulations

Simplify reporting with automatic procedures for creating, printing and

submitting declarations.

Determine which of your products qualify for preference handling.

Provide an active interface for sending or retrieving data via internationally

available EDI systems and other electronic media

Update or change data in all relevant foreign trade documents at any time
prior to the final goods issue. Even after you have posted the goods issue,
you can still change data in the invoice
India SAP CoE, Slide 5
Use
•Cost Effective

•Easy to Use

•Integrated with total SAP

system

India SAP CoE, Slide 6

Challenges
General
Processing
Data Periodic
Service Declarations

Foreign
Preference Trade Legal
Processing Control

Communication
& Documentary
Printing Payments

India SAP CoE, Slide 7

SD Foreign Trade
1 PrepareMe

2 TellMe

3 ShowMe

4 LetMe

5 HelpMe
India SAP CoE, Slide 8
Foreign Trade
• As countries move increasingly toward a global market economy,
businesses become more involved in and influenced by foreign trade.
This affects not only the vendor and customer relationship, but that of
foreign subsidiaries within a single company. With this opening of
market opportunities come regulations, licenses, import tariffs, and an
increasing amount of paperwork required by government agencies
and other legal entities.

• SAP’s R/3 Foreign Trade application enables you to:

– Manage import and export processes, integrating them efficiently
into the supply chain
– Automatically identify licensing requirements for importing and
exporting goods based on current regulations
– Simplify reporting with automatic procedures for creating, printing
and submitting declarations
– Determine which of your products qualify for preference handling
– Provide an active interface for sending or retrieving data via
internationally available EDI systems and other electronic media
– Update or change data in all relevant foreign trade documents at
any time prior to the final goods issue. Even after you have posted
the goods issue, you can still change data in the invoice .

India SAP CoE, Slide 9

Foreign Trade
The Foreign Trade/Customs (FT) application component is integrated
with Materials Management for handling imports and with Sales and
Distribution for exports. In the area of documentary payments, it is also
integrated closely with the Financial Accounting application.

The below shows where FT data is integrated into the R/3 environment

India SAP CoE, Slide 10

Import Processing

•This scenario describes the processes involved in importing goods into your
country from a third country. In this sense, a "third country" is defined as the
country of export when no trade agreement exists between your country and the
exporter. In this case, you are responsible for compliance with the import laws of
your own country.
India SAP CoE, Slide 11
Reasons for Importing Goods
There are three primary reasons for importing goods.
1. Trade 2.Production 3.Transit 4.Trade

There are three main reasons why you may want to import for trade purposes:

• Comparative advantage – Some foreign manufacturers can make products more

cheaply.
• Availability – Some products are only available in foreign markets.
• Marketability – A product may be new and you want to market it in your entire
country or in a region of your country.

Production
It is sometimes advantageous to import raw or semi-finished materials to be used in
a manufacturing process.

Transit
Foreign merchandise with the status "in transit" is exactly that – passing through
your country on the way to another. At the plant level in the SAP System, this
refers to a goods receipt that immediately becomes a goods issue to a country
other than the location of your plant. A carnet TIR (document which allows
passage of foreign merchandise through a customs territory) may be required for
the transfer of goods under bond in your country.

India SAP CoE, Slide 12

Import Process
• You (the importer) first request a quote
(generally, EXW or CIF) for the merchandise. This
may or may not include transportation and
insurance costs.

• You prepare a purchase order based on the offer

(quotation) received from the exporter.

• The exporter creates a sales order based on your

purchase order and sends it to you.

• (Optional) The exporter creates an advanced

shipping notification to inform you of the date
and quantities to be delivered.

• The exporter ships the merchandise.

India SAP CoE, Slide 13

Import Process
(continued)
• Also at the time of shipment, the exporter
provides you with required documentation
depending upon the terms of sale and your
agreement with the exporter.

• Documents may include some or all the following

1. Bills of lading
2. Commercial invoice
3. Export packing list
4. Shipper's Export Declaration (SED) (Required in
the USA for goods valued at $2501 or more)
5. Shipper's Letter of Instructions (SLI) (applies
only to the USA)
6. Single Administrative Document (SAD) (applies
only to the EU)
7. Certificate of Origin
8. Insurance certificates
9. Licenses (when necessary)

India SAP CoE, Slide 14

Import Process Involving Letter
of Credit
• You (the importer) first
request a quote for the
merchandise. This may or may
not include transportation and
insurance costs.

• You prepare a purchase order

based on the offer received
from the exporter.

• The exporter creates a pro

forma invoice and sends it to
you.

• You open a letter of credit with

the opening bank in the
country of import.

India SAP CoE, Slide 15

Import Process Involving Letter
of Credit (continued)
• This involves advising the bank of the
documents required from the exporter. As
an importer, you not only need the
documents required by customs, but also
the documents that are required by any
other agency regulating your commodity.
These may include
1. Bills of lading
2. Commercial invoice
3. Export packing list
4. Shipper's Export Declaration (SED)
(Required in the USA for goods valued
at $2501 or more)
5. Shipper's Letter of Instructions (SLI)
(applies only to the USA)
6. Single Administrative Document
(SAD) (applies only to the EU)
7. Certificate of Origin
8. Insurance certificates
9. Licenses (when necessary)
India SAP CoE, Slide 16
Export Processing

•This scenario describes the processes involved in exporting goods from your
country to an independent country (third country) where no trade agreement
exists between your country and the importer. In this case, you are responsible
for compliance with the export laws of your own country .

India SAP CoE, Slide 17

Reasons for Exporting Goods
Three primary reasons for exporting goods include

1.Increase profit 2.Consistency in sales profits 3.Extension of the product cycle

• Consistency in Sales

Peaks and valleys in the business cycle are inevitable. When the economy of one
country is on an economic downturn, the economy in other nations may be in a
relatively prosperous phase. If you have customers in countries other than your
own, your business profits tend to become more consistent from year to year.

• Product Cycle Extension

When you export your product, the end of the product cycle is postponed. When the
market in your own country is saturated, exporting allows you to introduce your
product into other countries.

India SAP CoE, Slide 18

Export Process
• The importer first requests a
quotation for the desired
merchandise.
• You (the exporter) provide a
quotation for the merchandise to
the importer including costs
based on the terms of sale
requested by the importer
(usually, EXW or CIF).
• The importer sends you a
purchase order based on your
offer.
• You issue a sales order based on
the purchase order and send it to
the importer.
• (Optional) You may also send an
advanced shipping notification to
inform the importer of the exact
date and quantities of
merchandise to be delivered.
• You ship the merchandise to the
customer.
India SAP CoE, Slide 19
Export Process (continued)
• Also you need to provide
documentation based on the terms
of sale and your agreement with the
importer. Documents may include
some or all the following:
1. Bills of lading
2. Commercial Invoice
3. Export packing list
4. Shipper's Export Declaration (SED)
(Required in the USA for formal
entry valued at $2501 or more)
5. Shipper's Letter of Instructions
(SLI) (applies only to the USA)
6. Single Administrative Document
(SAD) (applies only to the EU)
7. Certificate of Origin
8. Insurance certificates
9. Licenses (when necessary)

India SAP CoE, Slide 20

Document Requirements
•Certificate of Origin: The certificate of origin is
an official declaration, which certifies the country in
which a commodity originated or was
manufactured. In most cases, the importer and
exporter must keep this document on file and
provide it to the government only if requested.

•Shipper's Export Declaration (SED): In the

USA, the SED is only required for shipments valued
at more than US$ 2500 (formal entry). If you are
shipping goods out of the USA, the SED does not
go to the importer. You must send it to the US
Government before the shipment leaves the US.
With the Automated Export System (AES), you can
file this document electronically.

•Export vessel movement summary sheet: If

you export by ocean from the USA, you must file
this document with the Customs Service.

India SAP CoE, Slide 21

Foreign Trade Data in Master
Records
•Master data relevant to foreign trade that is used throughout the entire
logistics chain in Materials Management (MM) and Sales and Distribution (SD)
documents.

Material Master Record

To go to a material master record from the SAP standard menu, choose

Logistics ® Materials Management ® Material Master ® Material.
You can display or enter data relevant to foreign trade in the following views of
the material master record:
•Basic data 1
•Base unit of measure
•Material group
•Division
•Net weight
•Gross weight
•Weight unit
•Sales organization data 1 and 2
•Tax category/classification
•Sales: General/Plant Data
India SAP CoE, Slide 22
Foreign Trade Data in Master
Records (continued)
•Transportation group
•Loading group
•Foreign Trade: Export data
•Commodity code (or Import code number)
•Country of Origin
•Region of Origin
•Legal (export) control information
•Preference information (when applicable)
•Foreign Trade: Import data
•Import Code number (or commodity code)
•Export/import group (a grouping of similar materials for
export or import transactions)
•Country of origin
•Region of origin
•Accounting 1
•Valuation class
•Price control
•Price unit
•Moving average price

India SAP CoE, Slide 23

Foreign Trade Data in Master
Records (continued)
Customer Master Record

To go to a customer master record from the SAP standard menu, choose

Logistics ® Sales and distribution ® Business partners ® Sold-to-party.

You can maintain data relevant to foreign trade data on the following
screens of the customer master record:
•General data
•City
•Country
•Region
•Transportation zone
•Postal code
•Language
•VAT registration number

India SAP CoE, Slide 24

Foreign Trade Data in Master
Records (continued)
The customer’s country helps indicate export transactions in sales and
distribution (SD) documents. You need the customer’s region for declarations to
the authorities.

To go to the Shipping and Billing information screens from the General data
screen, choose Goto ® Sales area data.

•Shipping
•Shipping conditions
•Delivering plant
•Billing
•INCOTERMS
•Terms of payment
•Payment guarantee procedures
•Licenses (legal control data)

India SAP CoE, Slide 25

Preference Handling
There are several possibilities for qualifying your
product as originating in your country or economic zone.
For example, these methods include:

Tariff shift (rules of origin)

Tariff shifting means you apply enough labor to the

product or its components to change its commodity
code.

De minimus rule (maximum of 7% non-originating

goods)

The de minimus rule allows a product to qualify for

preference if no more than 7% of the product is
composed of non-originating goods.

Certificate of origin (vendor declaration)

Your vendors give you a document certifying that the

product or its components originate in your country or
economic zone.
India SAP CoE, Slide 26
Customs Data
•This task enables you to transfer foreign trade data objects from your
database to another system. Currently these objects include the following

India SAP CoE, Slide 27

SD Foreign Trade
1 PrepareMe

2 TellMe

3 ShowMe

4 LetMe

5 HelpMe
India SAP CoE, Slide 28
Customizing

IMG  Sales and Distribution  Foreign Trade/Customs

India SAP CoE, Slide 29

Incompleteness Schemas for
Foreign Trade Data

In this IMG activity, you

define the incompletion
procedures that you want
to use at header and/or
item level.
You assign valid foreign
trade fields to each
incompletion procedure.

Sales and Distribution  Foreign Trade/Customs  Control Foreign

Trade Data in MM and SD Documents  Incompleteness Schemas for
Foreign Trade Data
India SAP CoE, Slide 30
Foreign Trade Data in MM and SD
Documents Assign the relevant
incompletion procedure for
header and/or item data to
the import and export
country.
You also define how the
system reacts when data is
incomplete.
Furthermore, you define in
the "consistency check"
section whether the system
only allows valid
combinations of modes of
transport and customs
offices during document
processing.

Sales and Distribution  Foreign Trade/Customs  Control Foreign

Trade Data in MM and SD Documents  Foreign Trade Data in MM
and SD Documents

India SAP CoE, Slide 31

Import Screens In Purchasing
Document
Set the system to propose
import screens for the
subsequent maintenance
of purchase orders and
purchasing outline
agreements

Sales and Distribution  Foreign Trade/Customs  Control Foreign

Trade Data in MM and SD Documents  Import Screens In Purchasing
Document
India SAP CoE, Slide 32
Define Default Business Type (SD)

Define the business

transaction type designated
by the authorities and assign
it as the business
transaction type proposal for
Sales and Distribution (SD)
as well as Materials
Management (MM)
documents

Sales and Distribution  Foreign Trade/Customs  Basic Data for

Foreign Trade  Define Business Transaction Types And Default
Value  Define Default Business Type (SD)
India SAP CoE, Slide 33
Define Default Export Procedure
Define import/export procedures and
determine defaults for Sales and
Distribution (SD) and Materials
Management (MM).
SD Export/Dispatch:
-------------------
The proposal depends on the
following criteria:
Country
Sales organization
Distribution channel
Division
Export/import material group
Item category

Sales and Distribution  Foreign Trade/Customs  Basic Data

for Foreign Trade  Define Procedures and Default Value 
Define procedure default
India SAP CoE, Slide 34
Default Values For Foreign Trade
Header Data Define default values for
foreign trade header
data. Note that this
object only supplements
vendor master data. It
does not overwrite it.
If you maintain mode of
transport '4' in the
vendor master and
mode of transport '3' in
this object, the system
will propose mode of
transport '4' in the
materials management
document

Sales and Distribution  Foreign Trade/Customs  Transportation

Data  Default Values For Foreign Trade Header Data
India SAP CoE, Slide 35
Allowed Business Transaction Type
Define the combinations of business Transaction types and procedures that are
permitted

Business Transaction Type

The business transaction type classifies the type of business transaction which is
performed. In the European Union (EU), this information is required for the
reporting of import and export data to INTRASTAT. Additionally, it is used by the
system during export control

Export/Import Procedure Code

The export/import procedure code for foreign trade uniquely identifies an
export/import procedure. For business transactions in the EU, the procedure code
is part of the information that you submit in monthly reports to INTRASTAT.
The system proposes procedure codes, based on the country of export/import, the
sales area, material groups and item categories. For example, the procedure code
can distinguish between goods that are shipped temporarily for further
manufacture by a subcontractor and goods that are shipped to their final
destination after processing by a subcontractor.
Sales and Distribution  Foreign Trade/Customs  Basic Data for Foreign
Trade  Define Combinations Allowed: Business Transaction Type - Procedure

India SAP CoE, Slide 36

Material Master Data

Commodity
Code/Import Code
Number for Foreign
Trade

Transaction Code : MM03

India SAP CoE, Slide 37
Customer Master Data

Use
In Customizing for Export Licenses you can
determine that certain license types will be
used for customers with mainly military use.
When defining export licenses, the system can
assign license types valid for military use only
to those customers that have been marked as
mainly for military use.

Transaction Code : XD03

India SAP CoE, Slide 38

Periodic Declarations
•Foreign Trade's Cockpit for Periodic Declarations is designed to
provide you with a quick, easy-to-use overview of the most
important functions in the area of declarations to the customs
authorities.

•To go to the Cockpit for Periodic Declarations from the SAP main
menu, choose Logistics ® Sales and Distribution (or Materials
Management) ® Foreign Trade/Customs ® Periodic Declarations ®
Cockpit – Periodic Declarations.

•Choose Sales and Distribution (or Materials Management ®

Purchasing) ® Foreign Trade/Customs ® Periodic Declarations

Screen Section Function

Operations Create periodic customs declarations
Maintain declaration data
Perform archiving tasks
Monitoring Display and update foreign trade data in material
master records
Goods catalog Create and display goods catalogs
Settings Make relevant settings in the Implementation
Guide (IMG)
Additional Declaration Germany Create declaration for foreign trade in Germany
involving mineral oil products

India SAP CoE, Slide 39

Prohibitions And Restrictions
Licenses Creation, display or
•Foreign Trade's Legal Control
modification of
Cockpit is designed to provide you license master
with a quick, easy-to-use overview records
of the most important functions in
License data Assignment of
the area of Legal Control. These licenses to
functions assist you in checking documents
your business transactions for
Alert reporting Display of sales
compliance with several foreign documents and
trade laws and regulations (for licenses
example, the export of weapons-
Controlling Check of customer
related products). master records
and material
•To go to the Legal Control Cockpit master records
from the SAP main menu, choose Simulation Simulation of Legal
Logistics ® Sales and distribution Control
(or Materials management) ® transactions
Foreign Trade/Customs ® Settings Check of
Prohibitions and Restrictions ® Customizing
Cockpit – Legal Control. settings
Declarations Disk creation for
Export Office

India SAP CoE, Slide 40

SD Foreign Trade
1 PrepareMe

2 TellMe

3 ShowMe

4 LetMe

5 HelpMe
India SAP CoE, Slide 41
LetMe
Transactions

MM01 Maintain Material Master

XD01 Maintain Customer Master
VI29 Incompleteness Schemas for Foreign Trade Data

VI49 Foreign Trade Data in MM and SD Documents

VI95 Default Values For Foreign Trade Header Data
VI52 Define Forms of Payment Guarantee
VX11N Create a Financial Document to the Customer

India SAP CoE, Slide 42

SD Foreign Trade
1 PrepareMe

2 TellMe

3 ShowMe

4 LetMe

5 HelpMe
India SAP CoE, Slide 43
Additional Info

http://help.sap.com/saphelp_erp2004/helpdata/EN/d8/2585347860ea
35e10000009b38f83b/frameset.htm

India SAP CoE, Slide 44