Every export is an import into another country. US Customs and Border Protection (CBP) has introduced a new rule titled Importer Security Filing and Additional Carrier Requirement, as of January 26, 2009. Under this rule, before any goods arrive by vessel into the US, the Importer Security Filing (ISF) needs to be submitted in advance by the importer or the agent (licensed customs broker) electronically to the CBP. This requirement only applies to cargo arriving in the US by ocean vessel, not to cargo arriving by other modes of transportation. The ISF importer or their agent must provide eight data elements no later than 24 hours before the cargo is set aboard a vessel destined to the US.

These data elements are: seller, buyer, importer of record number, consignee number, manufacturer (or supplier), ship-to party, country of origin, and the commodity’s Harmonized Tariff Schedule of the United States (HTSUS) number. Two additional data elements — container stuffing location and consolidator — must be submitted as early as possible, but no later than 24 hours prior to the ship’s arrival at a US port.

CBP may issue liquidation of $5,000 per violation for the submission of an inaccurate, incomplete, or untimely filing. If goods for which an ISF has not been filed arrive in the US, the CBP may withhold the release or transfer of the cargo, refuse the unloading of the merchandise, or seize it if it is illegally unloaded. Additional noncompliant cargo could be subject to “do not load” orders at origin or further inspection on arrival.

From an importing point of view, companies use different approaches to meet the requirement. We’ll discuss the import processes setup using SAP ERP Central Component (SAP ECC) and SAP BusinessObjects Global Trade Services, and the key configuration setup for building a robust solution, data, and process to support the requirement. We’ll also provide details on building an automated interface with your brokers for import declarations.

We’ll first give a quick overview of the logistics integration and the process overview of the import management. Import processes are triggered based on your incoming schedule, which could trigger based on the vendor purchase order. Let’s take the example of a purchase order logged in an SAP ECC system with the US as the country of destination. Follow menu path User Menu > Logistics > Materials Management > Purchasing > Create/Change/Display Purchase Orders to see a purchase order with product 11361 (Figure 1).

Figure 1

Purchase order with product 11361

From the Display/Change Purchase Order screen, click the Conditions tab to see the screen in Figure 2.

Figure 2

Purchase conditions

Click the Partners tab (not pictured) to see the screen in Figure 3. These screens provide the document data details that trigger the document in SAP BusinessObjects Global Trade Services for customs declarations, the purchase order, net value, and the statistical value.

Figure 3

Partners in the purchase order

SAP BusinessObjects Global Trade Services Declarations 

As the purchase order is saved in SAP ECC, this information is automatically transferred to SAP BusinessObjects Global Trade Services, and an equivalent customs declaration document is created in that system. Figure 4 displays the report in SAP BusinessObjects Global Trade Services, which shows the customs declaration work list. Click the icon next to Enter Customs Declaration Before GR and select Import > Entry for Consumption.  

Figure 4

Customs entry for the consumption work list

This brings up the report shown in Figure 5. The report allows you to display the purchase orders that were logged into SAP ECC.

Figure 5

Review and prepare customs declarations prior to the goods receipt

This report displays all the purchase orders that have been logged in SAP ECC, for which equivalent SAP BusinessObjects Global Trade Services customs declaration documents are created (Figure 6).

Figure 6

Customs declaration before goods receipt — free circulation

This worklist provides the details of the vendor, purchase order, item number, any inbound delivery, open quantity, unit of measure, product number, and the declared quantity. The inbound delivery triggers confirmation of the goods arrival (also called advanced-shipment notification) and these documents are identified for customs pre-clearance.

Customs Document Review 

Prior to the customs declaration, it is important to review the document for key data elements prior to the preparation of declarations. In this section, I’ll go over the different data elements with the customs document that is transferred from SAP ECC.

Within the Item Overview tab of the default screen that comes up when the customs declaration is displayed, you can see the status of the item. If the item is complete you see a green square in the Incomple… (incomplete) column; it is red if it is not complete (Figure 7).

Figure 7

Item data

Partner data, also called partner functions within the document, is important information in reporting the data to customs. This includes the declaring party, consignee, seller, and other functions shown in Figure 8. Verify this information as being correct compared to Figure 3.

Figure 8

Partner details

The Transportation tab provides the key dates for declaration date, import date, mode of transport, and Inco terms (Figure 9).

Figure 9

The Transportation tab

In the Documents/Evidence tab, you can store the reference number against which the import customs declaration is stored (Figure 10).

Figure 10

Store the reference number

Following the review of the header data, let’s review some critical item data. In the default view of the customs declaration item overview, click the Documents/Evidence tab. So far you have been reviewing the header data, but you can click the Item data to view item-related information. The General Data view provides the overview of the item with the product number, description, tariff number (Harmonized Tariff Number), other governmental agency (OGA) codes, item quantities, and weight (Figure 11). Users should review this information prior to submitting it to customs because if it is incorrect, they will get an error message.

Figure 11

The General Data tab

While in the item data General Data tab, click the Packaging Data tab. In this view, the packaging data is stored by type, displaying the container number. This is a critical piece of information that is transferred to customs for declaration purposes (Figure 12).

Figure 12

Customs declaration document with packaging data view

In the same view, click the Cust.Value tab to view the customs values with duties details (Figure 13).

Figure 13

Customs declarations document: item customs value details

This view provides you with the details on the particular line item, including Value of Goods, Insurance Costs, Provision Value (Assist), Preferential Customs Duty, Merchandise Processing Fee (MPF), and Harbor Maintenance Fee (HMF). These are used for calculating the customs value and the duties that need to be paid to customs.

Click the Texts tab to review details captured within the texts (Figure 14). In our example, we have created a text item called Seal Numbers to capture the identification number of the seal used in the vessel shipments.

Figure 14

Customs document item text with customized item IDs

Similar to the use of item text to capture vessel seal numbers, you can use the Additional Data field to capture certain additional critical data, such as whether the customs document has a placeholder for, for example, the hazardous material indicator. With customs declaration, hazardous materials are identified, handled, and declared appropriate. While you are in the customs declaration item, click the Additional Data tab (Figure 15). Three fields are available for use. In this example, Addt’l Data 1 has already been configured as Hazardous Goods (H) and Addt’l Data 3 as Reference Numbers.

Figure 15

Customs declaration document item view: additional data

In the above steps, we have reviewed the critical data required for generating the declarations documents. This does not enable you to generate trade declaration documents. This case demonstrates where the customer is using the service of a broker for declarations. The two important documents that are generated are the cargo release and the entry summary. These two documents are passed on to the broker and the broker, in turn, uses this information to declare the shipment for imports. These documents are defined as messages, and the communication is sent to the broker to file the ISF and entry for consumption.

In the Communication tab (Figure 16), select the Message.

Figure 16

Customs document communication with messages display and print

Click the print preview icon to view the document details (Figure 17).

Figure 17

Cargo release document display

Message type P0380 displays the import master (Figure 18).

Figure 18

Entry summary document display

Customs Import Process: Configurations Steps 

Having seen the customs declaration process steps, let’s now go over the configuration steps to set up this process. 

Step 1. Perform feeder system settings for MM0A, MM0B, and MM0C (Figure 19). The first step in the configuration starts with setting up the feeder system documents that are identified for transfer to SAP BusinessObjects Global Trade Services and are used for customs declarations. In SAP ECC, follow IMG menu path Sales and Distribution > Foreign Trade/Customs > SAP Global Trade Services - Plug in > Control Data for Transfer to SAP Global Trade Services > Configure Control Settings for Document Transfer. Select the Application Level MM0A and click the Document Types folder, which brings up the list of document types shown in Figure 19.

Figure 19

Document transfer configuration set up with SAP ECC

Step 2. Make purchase order type FNB and schedule agreement type LLP and LZP active for the compliance, customs, and risk components of SAP BusinessObjects Global Trade Services (Figure 20).

Figure 20

Document types details set up for control settings

Then select the appropriate services (Figure 20). For import customs declarations, select the relevant document type (in this example, purchase order type FNB), then select the Call up SAP Customs Management Services service check box for import declaration. Check the option Output Dialogue in SAP Global Trade Services if you want the system to prompt you with a pop-up window of the compliance screening results before the document is saved in SAP ECC. If you plan to activate Risk Management in SAP BusinessObjects Global Trade Services, you need to check the Generate Worklist of Vendor-Based Long-Term Vendor Declarations.

Step 3. Set the inbound delivery documents EL, ZELN, and ZELT to active for customs processing. In configuration step 1, select the Application Level MM0B (Figure 21).

Figure 21

Configuration setup for inbound delivery

Here you configure the inbound deliveries that are transferred to SAP BusinessObjects Global Trade Services import declarations (Figure 22). Click the New Entries button and maintain the entry for the inbound delivery document and in the details screen select the Call up SAP Customs Management Services check box. If you plan to identify the customs status as bonded, you need to check the Placement into Customs Status Before GR check box, but if you identify it as in transit, you should select the Hold Goods Receipt if Unloading Permission Is Missing option.

Figure 22

Document type configurations for inbound delivery

Step 4. Configure the goods receipt or materials document. Set the Call up SAP Customs Management Services indicator in Figure 22. The system generates goods movement documents as part of the post goods issue of the inbound delivery. From the configuration in step 1, select the Application Level MM0C (Figure 23). The documents are pre-defined.

Figure 23

Document transfer setup for goods receipt material document

Click the New Entries button to maintain a new entry (for example, GR goods receipt 101B) (Figure 24). Then check the Call up SAP Customs Management Services check box. All the material movements are selected to monitor customs service. Don’t check the Generate Worklist of Vendor-Based Long-Term Vendor Declarations check box as it is only needed if you want to perform preference determination.

Figure 24

Maintain a new entry

SAP BusinessObjects Global Trade Services Configuration 

In the previous steps, I went over the configuration steps within SAP ERP. Now I’ll detail what you need to do in SAP BusinessObjects Global Trade Services.

Step 1. Define partner functions that are in use within the customs declarations. Follow IMG menu path SAP Global Trade Services > General Settings > Partner Structure > Define Partner Functions (Figure 25). Review the partner functions that are pre-defined in the system and if needed you can define your own custom partner function by selecting one of the pre-delivered ones and clicking the copy with reference icon (next to the New Entries button).  

Figure 25

Define partner functions for customs declarations

Step 2. Set partner grouping. After defining the partner functions, you need to assign the partner types to the group (Figure 26). Follow IMG menu path SAP Global Trade Services > General Settings > Partner Structure > Define Groups of Partner Functions. There are pre-defined partner groupings delivered by SAP BusinessObjects Global Trade Services. The one for importing in customs management is PSCCUI. Select it and click the Assign Partner Function folder to see the partner functions that have been assigned. If you want to add a new one, click the New Entries button and add a new one as defined in step 1.

Figure 26

Partner grouping definitions

Figure 27

Assignment of partner function to the partner groupings

Step 3. Map the partner type to the logical system group (Figure 28). The partner types defined in step 1 are to be mapped to the feeder system logical system or logical system group. You can do this via IMG menu path SAP Global Trade Services > General Settings > Assign Partner Type to the Logical System group.

Figure 28

Mapping of partner type to the feeder system logical group

Step 4. Define the legal regulation. Define the customs regulations in SAP BusinessObjects Global Trade Services to represent the importing regulation (Figure 29). Here you can define the customs procedure against which the key determinations are defined. Follow IMG menu path SAP Global Trade Services > General Settings > Legal Regulations > Define Legal Regulations.

Figure 29

Define legal regulations

Review the pre-defined legal regulation (CUSUS for US) and ensure that the Type of Legal Code (Customs Processing), Import/Export (Import/Arrival), and Original City of LR (US) are correct.

Step 5. Assign the country or country group (Figure 30). In this case, let me take the example of country group. You can choose to use a country group for legal regulation. Follow IMG menu path SAP Global Trade Services > General Settings > Legal Regulations > Define Legal Regulation. Select the Legal Regulation folder and click the Assign Country Group folder.

Figure 30

Assign the country or country group to the legal regulation

Step 6. Set the determination procedure. SAP BusinessObjects Global Trade Services has a default determination procedure that you can use or make changes to as required. When the documents are transferred to SAP BusinessObjects Global Trade Services, the system refers to the procedure to determine if a country or country group is used for legal regulation determination. Follow IMG menu path SAP Global Trade Services > Custom Management > Define Procedure for Active Legal Regulations (Figure 31).

Figure 31

Define determination procedure for active legal regulations

Click the Assignment of Determination folder to see the screen in Figure 32. Review the default settings for determination procedure delivered. In some situations (e.g., you want to use a country group instead of the default country as the key for determining the legal regulation), define custom determination procedures.

Figure 32

Define the strategy within the determination procedure

Step 7. Activate the legal regulation. Follow IMG menu path SAP Global Trade Services > General Settings > Legal Regulation > Activate Legal Regulations (Figure 33).

Figure 33

Activate legal regulations

You can choose between Country and Country Group folder. If you select Country, then you activate at country level (Figure 34). Then activate Customs Import/Active for a specific country by selecting from the drop-down 1 Check: Arrival/Import.

Figure 34

Country activation for legal regulation

Step 8. Define the harmonized tariff number structure (Figure 35). A harmonized tariff schedule is used for classifying your product and for import declaration of the products being imported. Follow IMG menu path SAP Global Trade Services > General Settings > Numbering Scheme > Define Numbering Scheme of Tariff Code Number. There are some pre-delivered numbering schemes from which you can select. Click the copy as icon to copy to a new numbering scheme. You can define a structure similar to what is shown in Figure 35.

Figure 35

Define the structure for tariff code numbers

Step 9. Assign the numbering scheme to the legal regulation (Figure 36). Once you have defined the numbering scheme, assign it to the legal regulation for use with product classifications. Follow IMG menu path SAP Global Trade Services > General Settings > Numbering Scheme > Assign Numbering Scheme of Tariff Code Number for Customs Processing. Assign the Import CTS to the Export CTS for the legal regulation CUSUS.

Figure 36

Assign a numbering scheme of tariff code number for customs processing

Step 10. Assign a foreign trade organization (FTO) and legal units (Figure 37). An FTO is the entity financially responsible for the shipment imported, and the legal unit represents the SAP ECC plant where the shipments are received. Follow IMG menu path SAP Global Trade Services > General Settings > Organization Structure. Define Foreign Trade Organization / Legal Unit.

Figure 37

Define the FTO

Now let’s look at the configuration steps in Customs Management.

Configuration Settings for Customs Management 

Step 11. Define document types. Document types in SAP BusinessObjects Global Trade Services define the processes that are carried out in the system for export or import declarations (Figure 38).

Figure 38

Define the customs document type for exporting or importing

Follow IMG menu path SAP Global Trade Services > SAP Customs Management > Document Structure > Define Document Type. Click the details (magnifying glass) icon to see the information shown in Figure 39. Ensure that there is a Number Range Number defined. Assign Document Type / Legal Regulation as the Access Control, and maintain the Partner Group from the pre-defined options in the drop-down menu.  

Figure 39

Detailed configuration for import declaration document type

Step 12. Activate the document type. Document types are activated for different services: customs or transit. In this example, we just define customs. You need to activate the import declaration document types defined in the earlier step for import customs processing. Follow IMG menu path SAP Global Trade Services > General Settings > Document Structure > Activate Document Type (Figure 40).

Figure 40

Activate the document type for customs processing

Step 13. Map customs declaration with the legal regulation. Following the activation, the document types are mapped for determination (Figure 41). Follow IMG menu path SAP Global Trade Services > General Settings > Document Structure > Define Control Settings at Doc Type Level and Legal Reg. Level for CD/CS.

Figure 41

Control data for document type or legal regulations

Step 14. Perform control settings for the document type. Set up the control data based on the mapping with the document type and legal regulation. Follow IMG menu path SAP Global Trade Services > General Settings > Document Structure > Define Control Settings at Doc Type Level for Customs Doc and Legal Regulation (Figure 42). For the combination of document type and legal regulation, assign the Action Profile, Partner Group, Text Determ. Proced. (text determination procedure), and Calculation Profile.

Figure 42

Control data for document type or legal regulation

Step 15. Define item category (Figure 43). Follow IMG menu path SAP Global Trade Services > General Settings > Document Structure > Define Item Category. The settings are pre-delivered, but you need to ensure that the Transfer to SAP NetWeaver Business Intelligence Active check box is checked to make sure that the data is extracted to SAP NetWeaver BW for reporting purposes.

Figure 43

Define the item category

Step 16. Map the document type to the feeder system document type. The document type defined in step 14 is mapped to the feeder system. Follow IMG menu path SAP Global Trade Services > General Settings > Document Structure > Assignment of the Document Type from Feeder Systems.

Step 17. Similar to the document type, you need to map the item category defined in step 14 to the feeder logical system group. Follow IMG menu path SAP Global Trade Services > General Settings > Document Structure > Assignment of the Item Category Type from Feeder Systems (Figure 44).

Figure 44

Map the item category to the feeder system

Figure 45 allows you to map the application level (MM0B Receipt/Import: Inbound Delivery) to the Logical System Group from feeder system to the Item Category. Assign the feeder system or SAP ERP item category to the SAP BusinessObjects Global Trade Services item category that is defined (in this example, all the MM0B selections).  

Figure 45

Details of the configuration mapping of the item category to the feeder system

Step 18. Define the incompletion procedure (Figure 46). You use the incompletion procedure to check the completeness of the data before preparing it for import declaration. Follow IMG menu path SAP Global Trade Services > General Settings > Document Structure > Control Incompleteness Checks in Customs Shipments and Customs Declarations. This shows the fields that are checked for completeness. If you want to add any fields, you can do so via the New Entries button.

Figure 46

Field assignment to the incompletion procedure

Step 19. Define the action profile. Under the action profile, you also can set action definitions (Figure 47). Follow IMG menu path SAP Global Trade Services > General Settings > Communication Processes > Define Techn. Medium for Msgs (PPF Action) f. Customs Shipment and Cust. Decl. The action profile consists of action definitions; each action definition captures the details of the communication in terms of a print form or Intermediate Document (IDoc). It shows the Object Type associated with it and the Context Class.

Figure 47

Define the action profile

Click the Action Definition folder to see a list of action definitions assigned to the action profile (Figure 48).

Figure 48

Action definition defined within the action profile

In this example, we have defined the action definitions CF 3461 for Immediate Entry and CF 7501 for Entry Summary. You can select one of the action definitions and click the Processing Type folder to see the details behind each action definition (Figure 49).

Figure 49

Processing type details behind the action definitions

Step 20. Define the process template. Here you can define the message type and output message (Figure 50). Follow IMG menu path SAP Global Trade Services > General Settings > Communication Processes > Define Control Settings for Communication Processes.

Figure 50

Process overview of a process template for customs declarations

The process CUSIM captures the details of activities and messages defined for importing. While in the above configuration, select the process CUSIM and click the Activities folder to bring up the screen in Figure 51.

Figure 51

Activities defined under process CUSIM

This shows the process activity within the process CUSIM (import). Select USETC and click Messages to bring up the screen in Figure 52.

Figure 52

Message definition under process and process activity

Figure 52 shows the messages that are part of the process activity. These messages can be defined as part of the activity sequence. In other words, what are the messages that need to be printed or transmitted in sequence? While in CUSIM, click the Activity Sequence folder to bring up the screen shown in Figure 53.

Figure 53

Activity sequence definition under process template and process

Step 21. Define the customs status for the import process (Figure 54). These statuses are used for reporting to the customs authorities. Follow IMG menu path SAP Global Trade Services > General Settings > Customs Code Lists > Assign Customs Status to a Process and Legal Regulation.

Figure 54

Assign the custom status to the import customs process

Step 22. Map the package type to the logical feeder system (Figure 55). Follow IMG menu path SAP Global Trade Services > Assignment of Packaging Materials Types from Feeder System. Assign the feeder system or your SAP ERP package material type to the SAP BusinessObjects Global Trade Services package type.

Figure 55

Assign packaging type material to the feeder system

Step 23. Define the duty type for the customs declaration (Figure 56). Follow IMG menu path SAP Global Trade Services > SAP Customs Management > “Customs Processing” Services > Define Type of Customs Duty. The ones shown are pre-delivered, but you can ensure that the ones that are needed are there and the ones that are not needed are not. For example, if you don’t need Preferential Customs Duty (B004), you can delete it from the duty structure.

Figure 56

Define a duty structure for import

Step 24. Define the calculation profile for the import (Figure 57). Follow IMG menu path SAP Global Trade Services > SAP Customs Management > “Customs Processing” Services > Configure Control Setting for Customs Duty Calculations. Assign a calculation profile in the Calc. Prof column, such as the custom one that we assigned called IMP_02.

Figure 57

Define the customs duty framework

Click the Completeness Rules for Profile folder to see the standard calculation profile for importing (Figure 58). Review the check rules that are pre-delivered within SAP BusinessObjects Global Trade Services along with the type of duty associated profile. The rules are delivered by SAP, but if they don’t meet your requirements you can create custom rules for the calculation profile.

Figure 58

Calculation profile completeness check

Step 25. Assign the document type to the calculation profile (Figure 59). Click the Assignment of Profile to Document Type folder in Figure 58 to get to this screen. Assign the duty type to the legal regulation for duty determination in the customs declaration document.

Figure 59

Assignment of duty type to the customs regulation

Rajesh Malle

Rajesh Malle is a principal consultant at Krypt Inc. He focuses on providing consulting solutions in global trade and logistics areas. He holds a master's degree in engineering and project management and has executed several SAP projects involving SAP Materials Management and customer-facing modules with SAP ERP.

If you have comments about this article or publication, or would like to submit an article idea, please contact the editor.

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.

If you have comments about this article or publication, or would like to submit an article idea, please contact the editor.