The COVID-19 crisis has reshaped the global economy and has shown the world how vulnerable world trade and global supply chains can be. It has become evident that conditions that prevailed pre-pandemic are not going to work anymore in the new normal. Subsequently, the new normal will require supply chain leaders to reset their strategies and establish solutions that will build resilience in their supply chain network going forward.

Businesses will have to face these new-normal foreign trade scenarios:

Global value chain reconfiguration

The over-reliance on a single nation or a few key suppliers has caused major problems during the pandemic. To reduce further risks from global exposure, many companies are thinking of diversifying their sourcing with new local and regional suppliers. This arrangement can shorten supply chains as well as reduce transit and customs clearance times.

Logistics and transportation disruptions

The pandemic has caused costly delays due to travel restrictions and border closures. Many logistics providers and freight forwarders also suffered reduced business hours due to lockdowns and social distancing protocols. Logistics companies experiencing operational constraints are likely to sustain delivery delays, congestion, and higher freight costs

New trade restrictions and agreements

The effect of the pandemic brought on new customs and international trade compliance and management measures. There are also talks of imposing additional customs duties caused by pressure to increase revenue. Moreover, in some countries, exports of essential goods are put under restraints such as outright bans, export quotas, and export license requirements.

New sustainability issues

The goal is to decarbonize the global economy to mitigate the effects of climate change – and the agenda is to reduce the global greenhouse-gas emissions to net-zero by 2050.

Governments and business leaders have now realized that responding to COVID-19 and addressing sustainability issues can go hand-in-hand by aligning their policies to this agenda. But the introduction of a differently designed Carbon Border Adjustment Mechanism (CBAM) might lead to severe distortions in the international trading system and inhibit efforts to mitigate climate change.

Digital trade implications

The pandemic has accelerated supply chains’ digital transformation, with companies leaning toward adopting digital trade. Also, the implication of a smarter border—minimized physical customs and border formalities by electronically transacting before and after the goods cross a border—is already gaining ground in several governments.

Adopting a digital supply chain in the new normal can significantly enhance trade facilitation, streamline border procedures, and boost transparency for trade. But, to thrive in the new normal, it is not enough to just embrace digital transformation; foreign traders should innovate their international trade management strategies and approaches.

Use a next-generation foreign trade solution engineered by a reputable vendor.

SAP’s proven on-premises and cloud solutions can help address businesses’ unique foreign trade challenges:

• SAP Global Trade Services (GTS)
  A complete suite of solutions for global trade management that empowers you to automate, standardize, centralize, and manage global trade compliance requirements for smoother and faster global transactions. With SAP GTS, you can drive consistency across global operations, elevate global trade in your organization, automate trade compliance, and drive bottom-line savings.
• SAP Transportation Management
  Offers holistic and innovative transportation management and comprehensive process and multimodal coverage. With SAP TM, you can optimize order management, freight planning, freight monitoring, and execution.
• SAP Logistics Business Network
  Allows logistics organizations to digitally collaborate on an open network to accelerate and simplify logistics processes. SAP LBN leverages advanced technologies such as Cloud and Blockchain to optimize traceability and freight collaboration.
• SAP International Trade Management
  Empowers businesses to ensure legal compliance, manage International Trade activities integrated into the supply chain, and reduce work effort through automation. With SAP International Trade Management, businesses can optimize on-time delivery performance, reduce compliance, and risk management costs, and minimize overall supply chain planning expenses.
• SAP Watch List Screening
  A robust cloud-based application that streamlines and automates the end-to-end screening process using the most updated, correct, and complete information. With SAP Watch List Screening, you can optimize screening compliance, reduce supply chain disruptions and delays, and minimize the cost and effort of third-party due diligence.

Ropaar has been helping companies transform their supply chains into an intelligent value chain. Part of our TradeBlazer’s Approach is helping businesses determine the right mix of digital solutions to address unique foreign trade problems

We help our clients accelerate time-to-value and maximize their SAP investments by ensuring that the implementation project is aligned to their specific foreign trade goals and overall business objectives, simplifying the integration of SAP solutions with their existing on-premises and cloud infrastructure, and providing training to ensure high user adoption and successful change management.

Let Ropaar help you integrate these SAP solutions into your arsenal so you can thrive in the new normal. Request a demo today!

The U.S Customs and Border Protection (CBP) reported that in their 2020 fiscal year, they had processed 32.8 million import entries and seized $1.3 billion worth of products with intellectual property rights violations. It should be underscored that every shipment that is imported to the U.S. is required to have a Manufacturer Identification Number (MID). Though MID is a universal number for all imports, CBP felt that it lacks the data quality, data richness, and uniqueness required by the U.S. Government to equip their supply chain with accurate insights.

In a move to minimize risk management challenges, the CBP is introducing a Global Business Identifier (GBI) Initiative.

What is the Global Business Identifier Initiative?

According to the CBP, the GBI Initiative is an interagency trade transformation project to establish a single identifier solution. This is a unique identifier that will capture the complete shipper/seller and manufacturer information and will eliminate the matter of having multiple companies being assigned the same MID.

Its objectives also include identification of high-risk shipments and facilitation of legitimate trade, creation of a “common language” between the U.S. Government and Trade, and improvement of data quality and efficiency for identification, enforcement, and risk assessments.

From more than fifty unique entity identification systems used by the U.S. Government, there are three globally used identifiers being considered for the GBI solution:

1. Legal Entity Identifier (LEI) – a 20-digit alphanumeric identifier with inherent reference data elements unique to a legal entity.
2. Data Universal Numbering System (DUNS) – a 9-digit numeric and non-indicative identifier that records unique business establishments with a library of over two hundred reference data elements.
3. Global Location Number (GLN) – a 13-digit numeric identifier with varying sets of underlying reference data elements that are customizable to location, function, and operations.

These global identifiers will distinctly identify the main legal identity and ownership, specific business and global locations, and supply chain roles and functions. Additionally, it will be evaluated for the eight GBI core competencies, namely: globally unique, separate legal entities, location and function-specific, tracks supply chain roles, managed for accuracy, oversight and governance, data sharing, and internationally recognized.

Initially, the CBP will assess the proposed solution with an Evaluative Proof of Concept (EPoC). This will require every volunteer trade participant to submit all three identifiers (LEI, GLN, DUNS) for the manufacturer/producer, seller, and shipper. And it will cover shipments from countries of origin specifically from Australia, Canada, New Zealand, the United Kingdom, and then from other countries of interest such as China, France, Mexico, Vietnam, Italy, and Singapore. The EPoC also comprises six groups of commodities, such as alcoholic beverages, medical devices, personal items, seafood, toys, and U.S. goods returned.

The CBP’s GBI Initiative could prove to have an enormous impact on organizations that have existing master data for hundreds of vendors in their customers’ SAP GTS systems. If this is the case, some third-party providers can help in simplifying things that involve integrations, SAP deployments, and mass updates.

Your Trusted “TRADEblazing Partner”

The success of your SAP GTS project depends on who your implementation partner is. As your SAP GTS implementation partner, Ropaar will help tailor-make the right SAP GTS project approach to align with your unique supply chain challenges. We will continuously innovate your Global Trade Management as your business needs change.

To learn more about our services, talk to our team of SAP experts today!

Today’s market trends are volatile with the entire supply chain being disrupted by various events such as COVID-19, political unrest, emerging technologies, and changing customer expectations. Leading industries such as CPG, chemicals, manufacturing, food production and processing, and oil & gas are plagued by uncertainty and disruption, especially about its logistics network. These industries are under a lot of pressure to deliver their goods faster and provide better service at the minimum cost possible.

Thus, the shift to digitalization is crucial to improve the capacity to move goods across transportation networks. Digitalization can greatly help track shipment in real-time and lead to faster, better-informed decisions.

Optimize Speed and Traceability with Minimum Costs

Various constraints such as great distances between supply chain partners, shipping lead time, and its associated costs can upset suppliers relating to service levels with its customers. To optimize speed and traceability while containing freight costs, you need a best-in-class solution that can:

• Seamlessly integrate core supply chain and business processes

Utilizing integrated solutions via digital workflows that can collaborate and connect with partners to see across the network can be game-changing.

• Automate and standardize order management and transportation planning

Automation eliminates manual processes in collecting and processing data. Additionally, the use of automated shipping and tracking solutions is essential in finding optimal routes for shipment. This can reduce fuel costs and provide efficient ways to consolidate exports/imports at customs

• Obtain end-to-end visibility into transport activities

Using sensors and connected devices for tracking deliveries and monitoring assets are vital in gaining end-to-end visibility into transport activities. Barcodes and RFIDs are used to track and trace shipments while GPS trackers, IoT sensors, and smart pallets are increasingly being utilized in combination with data analytics to enable access to the location and condition of the shipment in real-time.

SAP Transportation Management (SAP TM) offers holistic and innovative transportation management and comprehensive process and multimodal coverage. With SAP TM, leading industries in need of logistics can expect improved on-time delivery and get real-time visibility into global and multi-modal shipping. Its powerful analytics capabilities empower companies to maximize asset use and control freight costs without negatively impacting the customer experience.

Implement SAP TM with a Trusted TRADEblazing Partner

Let Ropaar be your implementation partner that will help tailor the right SAP TM solution approach that is aligned with your unique logistical challenges. Our services include:

• Automated Order Management
• Data-driven Transportation Planning and Execution
• Strategic Freight Costing and Settlement
• Real-time Analytics and Reporting

To learn more about how Ropaar and SAP TM can optimize speed and traceability while containing your freight costs, request a demo today!

It all started with a data breach for Quest Diagnostics.

After that, its 11.9 million patients were affected as an unauthorized user gained access to their financial data and social security numbers. Fast-forward to 3 years later, and the case still is one of the most significant cautionary tales for reminding companies to strictly screen the partners they work with as much as they screen the employees they hire. Your partners’ controls and values do not necessarily reflect the high level of internal controls and ethical standards you practice. Because of this, watch list screening has not only become more stringent and more challenging than ever — but also become even more important.

As the U.S. government continues its highly visible use of denied party lists, it has become imperative that your company screen the vendors, suppliers, and other third-party partners that you might do business with. Screening your third-party partners is a process that must be done with due diligence watch lists, databases, and other resources. By collecting and comparing data about your third parties, your company gets to understand their ownership structure, history, adverse media reports, connections, and past litigations, among others. Listed below are examples of what the data the Chief Compliance Officer and the compliance team must look for:

• Owner’s information — Who owns the company you’re about to work with?
• Personal background checks — Have the managers and owners ever encountered issues with breaking any laws?
• Regulatory enforcement actions — Has the vendor been sanctioned for non-compliance?
• Connected entities and individuals — Is it connected to any sanctioned individual or entity?
• Political ties — Assess probabilities for corruption

Through these data, the CCO and the compliance team can understand and even predict the risks that might ensue from working with that third party — from corruption to money laundering, cybersecurity, terrorism funding, etc.

Watch list screening data, however, is still raw in form. How to assess this data and make sense of it in a strategic manner is the next step in modern corporate compliance.

Screening Data and Its Complexities

Effective modern corporate compliance is more than just having access to a vast amount of data. It also requires interpreting that data to make wise decisions. Here are some steps you must not skip when making sense of your watch list screening data.

Understand the prospective vendors’ risks in relation to your own. Your own company has its own compliance risks as most companies do. You must inherently know these risks so that you can assess possible compliance lapses between you and your prospective vendor. It goes without saying then that you must thoroughly know everything possible about who your third parties are before you formally engage in business activities with them.

Put policies and procedures in place. Upon discovering the risks a specific vendor might pose, you have to make a number of decisions as to whether or not to use that vendor, apply extra precautions like providing extra oversight or approval steps for high risk parties, or cut ties with the party altogether.

Conduct regular audits on your program’s effectiveness. Once you have chosen a vendor, periodic checks must be performed to ensure that the program runs as intended and that it is streamlined to avoid any vendor risks and is aligned with all compliance measures.

While all these processes can be tedious when done manually, companies have the option to hire a screening partner or implement a watch list screening technology that can automate watch list screening.

Automate Watch List Screening with SAP Technology

SAP Watch List Screening is designed to help companies assess potential risks on an exception basis to avoid high-risk businesses, individuals, and entities before you formally engage in business activity with them.

SAP’s restricted party screening software simplifies watch list screening — improving vendor compliance and reducing the cost and effort of third-party due diligence.

The technology uses a SaaS model that simplifies screening, provides instant access to up-to-date watch lists, streamlines uploads, and accelerates time to value. It automates compliance checks across critical sales and procurement processes to improve results and decrease supply chain delays. This helps companies avoid partnerships and relationships with sanctioned individuals and entities and reduce the risk of noncompliance business-wide.

Designed with restricted and denied party screening, the technology allows for real-time compliance checks for order-to-cash and procure-to-pay processes, automated screening of restricted or denied parties with inline process blocking and release, and ad-hoc screening for extended use cases.

Other benefits include:

• Cloud deployment
• Reduced supply chain disruptions and delays
• Improved compliance within business processes
• Simplified IT landscape

Implement SAP Watch List Screening with Ropaar

While implementing SAP solutions might sound like a lot of work, companies like Ropaar can assist and guide you through your journey based on our prior experience in delivering trade compliance and denied party screening solutions.

At Ropaar, we have helped various companies from across different industries to automate their watch list screening processes using SAP technologies. We have helped them assess their unique landscapes and implement cutting-edge SAP solutions to help them comply with stringent standards.

By leveraging Ropaar’s years of experience in watch list screening, you can be confident that your organization can overcome current and future global trade challenges. Contact us to learn more about our solutions and services.

Every country has a different food safety regulation and its perception of risk. These differences in national standards make compliance challenging for exporters and can result in permanent trade frictions and affect food trade.

Compliance-related hurdles can lead to costly delays, higher trade costs, food safety risks, and customer dissatisfaction. Food companies must proactively mitigate compliance risks to ensure frictionless and compliant transactions and faster time-to-value.

Here are the top 3 foreign trade compliance risks that food companies must manage effectively to avoid poor results.

1. Changing regulations

Regulatory bodies across the globe are constantly modifying and updating standards and protocols to meet present demands. Some of the recent changes include:

Latest FDA rules

The Food and Drug Administration (FDA) announces new regulatory updates — including changes to its definition of “healthy,” FDA Standards of Identity, labeling clarity on animal cell technology, and cannabinoids regulation.

GACC Order No. 248

The General Administration of Customs of China (GACC) Order No. 248 sets out new requirements for the registration of qualified foreign food products exporters to China, effective starting January 1, 2022.

2. Supply Chain Risks

Compliance with food safety protocols requires ensuring that the products are of high quality from farm to fork. Here are three key factors that need to be effectively managed and monitored:

• Suppliers

How do your suppliers manage compliance?

• Ingredients

What are the inherent risks posed by the ingredient you use?

• Use of Ingredients

How do you ensure that your staff uses the product safely and compliantly?

3. Innovation and Sustainability Concerns

To meet today’s demand, food companies integrate modern technologies and approaches into their processes. Recent advances include:

• CRISPR-Edited Agriculture, a gene-editing technology for introducing commercially desirable traits in crops·
• Alternative meats from plant-based proteins·
• New food freezing concepts

Implementation of these innovations requires the backing of regulatory bodies to ensure compliance and address concerns such as:

• Environmental and ethical issues
• Labeling issues
• Food safety concerns

Proactively manage foreign trade compliance risks

At Ropaar, we have helped various global food companies to overcome and adapt to ever-changing global trade compliance risks and challenges. We helped them assess their unique landscape and implement cutting-edge SAP global trade solutions to empower them to execute in the new normal.

By leveraging SAP Global Trade Services (GTS), food companies can confidently trade globally with:

• Next-generation export and import management
• Simplified trade preference management
• Adaptive customs management
• Data-driven restricted party screening

Contact our team of SAP experts to learn more.

The COVID-19 pandemic caused various shifts in the already ever-changing and volatile international trade, spurring companies to seriously rethink their global trade management strategies. Aside from dealing with the current impact and implications of the health crisis for their foreign trade processes, businesses should also fortify their enterprise for the aftermath of the pandemic. This requires knowing what lies ahead and what measures can proactively be implemented to thrive during the pandemic and beyond.

Here are the top post-Covid foreign trade challenges businesses should prime themselves for.

1. Global value chain reconfiguration.
   • China has been a major player in the global value chain, and this is why the outbreak in Wuhan — where the virus has allegedly originated — has dramatically changed the game. Back-shoring, nearshoring, and regionalization have become a major discussion in the global arena. Many global companies had to consider having both local and international suppliers just to ensure resiliency and reliability
   • Although some experts say that regionalization will not happen overnight or might take a decade to materialize, this gradual shift will still have a direct and indirect impact on companies playing in the international arena. To minimize the impact of the global restructuring, companies need to be steps ahead and start innovating their processes to prime the entire enterprise for this foreign trade shift.
2. Logistics and transportation disruptions.
   • During the pandemic, the container shipping sector was “severely affected” by social restrictions and lockdowns. Ports became more congested due to stricter health protocols and reduced manpower, leading to costly delays. Shipping intermediaries such as logistics providers and freight forwarders also suffered reduced business hours.
   • Experts, however, say that post-Covid, airlines will increase dedicated air cargo capacity to help address the problem. But heightened cargo inspections and cross-border control protocols will remain a bottleneck going forward. Global players that wish to minimize its impact on their company need to optimize cargo visibility, transparency, and traceability to help streamline the process and curb the risk for costly delays.
3. New trade restrictions and agreements.
   • According to the World Bank, “COVID-19 has spawned new trade restrictions and threatens to widen old trade divisions.” Modern trade agreements (deep trade agreements) will cover not merely trade but also a range of policy areas — including protection of the environment and intellectual property rights.
   • Export bans due to safety concerns could become a long-term challenge as well, particularly on food exports. According to APEC, “the food security situation is stronger now compared to the 2007–2008 global food crisis.”
   • Companies that trade globally should be fully aware of these new trade agreements and restrictions (both country- and industry-specific as well as international) to avoid compliance and other risks that can affect the entire business. Automation and standardization of global trade compliance, document creation and filing, and other foreign trade processes can help companies ensure they are always on the right track.
4. New sustainability issues.
   • Experts foresee that in the near term, nations will implement their individual emissions pricing systems according to their border adjustment mechanisms. A lack of consensus among nations will result in “differently designed CBAMs” or emissions pricing systems that vary from country to country, requiring global players to conscientiously comply with each pricing system imposed by the countries they transact with. Aside from the complexity, this change could also hamper businesses’ efforts to mitigate climate change.
   • Finding the right balance between sustainability, cost, and customer experience has never been easy. But armed with new-age foreign trade solutions, companies can at least minimize the impact of issues such as this.
5. Digital trade implications.
   • As more and more forward-thinking companies are leaning toward adopting digital trade, new foreign trade issues that could lead to diplomatic friction arise. This includes data privacy, integrity, and transparency issues. Experts suggest that new-generation trade agreements should include rules governing data processing to avoid compromise of online sales of goods and services.
   • At the enterprise level, companies can help address the issue by automating and standardizing data processing and document management to avoid manual procedures that often lead to data privacy, integrity, and transparency issues.

Successfully Navigate Post-Covid Foreign Trade Challenges

To avoid unnecessary costs and risks due to changes in the foreign trade arena, companies should look to industry experts who can help them implement new-age solutions. At Ropaar, we have helped various companies from across different industries to prime their enterprise for the next normal. We helped them assess their unique landscape and implement cutting-edge SAP global trade solutions to help them execute in the new normal.

By leveraging Ropaar’s years of experience in foreign trade, you can be confident that your organization can overcome current and future global trade challenges. Contact us to learn more about our solutions and services.

Who you are doing business with can greatly affect your enterprise. If your organization transacts with a restricted entity, individual, or enterprise, it will be subject to sanction violations with penalties of up to $1,000,000 per transaction and 20 years imprisonment.

Regularly screening parties, however, is not an easy task. It requires thorough entity investigation, laborious data processing, and keen monitoring of all transactions the party makes. Doing all this manually can be extremely overwhelming.

You can automate the screening process using a cutting-edge solutions. SAP offers different tools under its Governance, Risk, Compliance (GRC), and Cybersecurity suite — including SAP Business Integrity Screening (formerly SAP Fraud Management), SAP Global Trade Services Sanctioned Party List Screening (SAP GTS SPL), and SAP Watch List Screening.

Each SAP screening tool has its competitive advantages and limitations. So which do you think can best cater to the unique needs of your enterprise? Here are some key factors to consider:

Software deployment

SAP Business Integrity Screening can be deployed either on-premise (client-hosted – perpetual license) or via Cloud (SAP hosted – subscription license). SAP GTS SPL can be run in the cloud, alongside SAP S/4HANA, or using a traditional database. SAP Watch List Screening, on the other hand, is cloud-native. It is available as Software-as-a-Service or as an added capability within SAP S/4HANA.

Control over screening algorithm

SAP Business Integrity Screening lets you use a pre-made detection strategy, create a new one, and refine and calibrate the strategy to simulate what-if scenarios. You may integrate it with SAP Predictive Analytics to detect suspicious behaviors and patterns not covered by existing rules going beyond simply screening business partners against denied entities list.

SAP GTS SPL and SAP Watch List Screening offer fully automated screening. But they also allow for manual input of parameters and ad-hoc screenings for extended use cases. Both solutions let compliance associates do further investigation to determine false positives and decide whether to confirm blocking or releasing the item. SAP Watch List Screening leverages embedded intelligence to minimize repetitive decisions on matches for more streamlined screening. However, SAP Watchlist Screening is delivered with a pre-set screening algorithm that applies to all subscribers, on the other hand SAP GTS SPL solution being a single tenant/on-prem solution allows for tweaking the algorithm and controlling match percentages to better reflect the risk appetite of the customer.

Denied party content selection

SAP Business Integrity Screening comes with pre-delivered content. It allows you to use external lists provided by the government and international agencies and create your internal list for ad-hoc screening.

SAP GTS SPL lets you import denied party lists from various external sources using the XML interface and create internal sanctioned party lists in SAP GTS. It enables you to choose which list to use during a screening process. It also lets you create legal regulations in SAP GTS to determine which sanctioned party lists are relevant for a particular screening process.The mature ecosystem of denied party content providers that service the SAP GTS solution ensures if there is a particular list that poses a specific risk to your enterprise, you can rest assured there is a content provider that aggregates and supplies that data.

SAP Watch List Screening simplifies content-related decisions by providing you with a single predefined content provider (Mendel-Verlag). It also provides Excel integration for uploading a list of trade partners that you want to screen. It remembers and uses the result to automatically block or release an item the next time you make a transaction.

Licensing cost and flexibility

Unlike SAP Business Integrity Screening and SAP Watch List Screening, SAP GTS SPL is not a stand-alone solution from a licensing standpoint. If you want to leverage SAP GTS SPL, you will need to license the export or import modules or the entire bundle of the SAP GTS suite. This can be a wiser move if you are looking to take advantage of a holistic solution for global trade compliance with denied party screening being a component of that need.

But if you are already operating in SAP S/4HANA, using SAP S/4HANA International Trade Management, or just want to take advantage of SaaS, then SAP Watch List Screening can be a great option to consider. Unlike on-premise and cloud deployments of SAP GTS and SAP Business Integrity Screening, an SAP Watch List Screening implementation is relatively faster and simpler — saving you enormous resources. You can even check out the software straight from the SAP store and ask for some integration help from a trusted partner like Ropaar to maximize its capabilities, which points us to the last point.

Integration

SAP Business Integrity Screening has built-in integration with SAP Analytics. It can be integrated with other GRC solutions for enhanced control and automated audit. SAP GTS, on the other hand, can be integrated with SAP S/4HANA, SAP ERP, other SAP solutions (such as SAP Transportation Management) out of the box, while non-SAP integration is supported via robust set of web services exposed from the SAP GTS’s denied party screening capability.

SAP Watch List Screening, on the other hand, is engineered for extensibility and integration with existing SAP and non-SAP systems. It comes with out-of-the-box integration with SAP S4/HANA and provides published APIs that can be integrated with other systems.

Regardless of what solution you choose, the success of your SAP project depends on your implementation team.

Using its TradeBlazers Approach, Ropaar can help your team overcome the complexities of selecting the right denied party screening solution, implementing and integrating it with other systems, and ensuring a high adoption rate. To get started, feel free to contact us.

According to the United Nations Conference on Trade and Development (UNCTAD), the global trade in goods hit its all-time quarterly high of $5.6 trillion in 2021 amidst the COVID-19 pandemic. Global trade, which is characterized by shipments of goods between countries, is a crucial aspect of supply chain management. Companies participating in international trade are usually under trade agreements and are subject to customs regulations to track and trace their shipments, as well as monitor the status of goods and maintain trade limitations.

Trade agreements define the tariffs and duties that countries impose on imports and exports. Tariffs or customs duties can be reduced or zero-rated if companies participate in Free Trade Agreements (FTAs). FTAs are instrumental in promoting cross-border trade between countries. It also deals with any issues that may hinder the flow of goods and services like behind-the-border barriers.

To take advantage of FTAs, several conditions must be met. First, the agreement should specify the eligible products for which the preferential duty rate is provided. Second, the agreement should indicate specific conditions about production processes and transport routes. And third, the proof of preferential origin of the goods must be accurately documented. These conditions can be complicated and time-consuming when done manually, especially for products that contain multiple components and raw materials and are outsourced from different countries.

Trade Preference Management

Companies are required to provide specific preference documents when delivering products to their customers. Usually, preference determination entails manual collection of supplier declarations, elaborate analyses of product-content origin, and complex value calculations using Bill of Materials (BOM) data. This process is risky, error-prone, and costly.

SAP Global Trade Services (GTS) provides comprehensive functionality for trade preference management. It automates the process of trade preference determination by utilizing content-based rules of origin to find out which products are eligible for reduced import duty rates. The process includes:

1. Requesting and managing vendor declarations
   • Collect relevant purchase orders and material documents
   • Empower suppliers to maintain the origin of materials with self-service functionality
2. Calculating product origin and preference eligibility
   • Calculate product origin for products using official trade agreement rules
   • Determine preference eligibility using different methods such as sales documents, invoices, and bill of materials
3. Enhancing preference processing at a level beyond product ID
   • Maintain preference origins at a more detailed level e.g., batch level
   • Conduct compliant calculation of preferential origin based on production/process orders
   • Integrate identity-based preference eligibility in issuing vendor declaration information
4. Generating declarations for customers
   • Automatically generate and manage declarations for customers receiving your products
   • Issue and reissue declarations in the event of a change in preferential eligibility
   • Integrate with sales and distribution processing in the SAP ERP application and customs management in SAP GTS

With SAP GTS, your organization can benefit from simplified trade preference management. Furthermore, utilizing SAP GTS add-on Identity-Based Preference Processing (IBPP) can maximize your preference determination by leveraging more granular data. This works by calculating only the components or raw materials that are used during the production process. SAP GTS IBPP offers a more precise result since preference processing is done via specific batches and so, preference status is stored at the batch level. Now, you can pick directly from those eligible batches for customer shipments.

Ropaar is a trusted “TRADEblazing Partner” for SAP GTS project implementations. Let Ropaar help you strategically leverage free trade agreements, maximize eligible products through preference determination, and efficiently manage vendor declarations. Request your demo today!