How SAP GTS ensures you meet legal requirements across all your customs import processes. (part 1)

Executive Summary

Importing goods into the European Union (EU) requires strict adherence to customs legislation, particularly the Union Customs Code and its implementing regulations. SAP Global Trade Services (GTS) offers a robust platform to manage these legal obligations efficiently. While SAP GTS can integrate with both SAP and non-SAP feeder systems, this whitepaper focuses on the standard SAP integration scenario using SAP S/4HANA. It explores the legal and procedural foundations of EU imports, the discharge of transit procedures, and how SAP GTS supports importers in meeting compliance requirements.

1. Legal Foundations of EU Imports

The customs territory of the European Union is a legally defined area within which goods are subject to EU customs legislation. When goods enter this territory—whether by land, sea, or air—they must be presented to customs authorities. This presentation is a formal notification of arrival and marks the beginning of customs supervision.

Once presented, goods are placed in temporary storage, a legal status that allows them to remain under customs control for up to 90 days. During this period, the importer must decide which customs procedure to apply. These goods are referred to as non-Union goods, meaning they are not yet in free circulation within the EU.

Temporary storage must occur in authorized facilities, typically located at the border and operated by freight forwarders or logistics providers. However, importers may also operate such facilities on their own premises if they hold the appropriate authorization.

2. Customs Procedures and Transit Discharge

EU customs legislation provides several procedures for handling non-Union goods. The most common is release for free circulation, where duties and taxes are paid, and the goods become Union goods. However, there are also special procedures designed to offer flexibility in logistics and compliance.

These include:

• Transit: Allows goods to move under customs supervision without paying duties immediately.
• Customs Warehousing: Permits indefinite storage of goods under customs control.
• Processing or Specific Use: Enables goods to be used or transformed under specific conditions.

In the transit procedure, goods are declared at the border and transported under customs supervision to their final destination. This is often done by a freight forwarder who submits the transit declaration electronically.

To use the simplified procedure, the importer must be an Authorized Consignee and operate an Authorized Temporary Storage Facility. These authorizations must be maintained in SAP GTS as master data records.

3. Electronic Communication through SAP GTS

SAP GTS plays a central role in managing customs procedures and ensuring compliance. It supports the full discharge of the transit procedure through a series of automated and auditable steps through (electronic) communication towards and coming from the customs authorities:

• Arrival Notification: Sent electronically to customs upon goods arrival.
• Unloading Permission: Customs response allowing seal removal and unloading.
• Conformity Check: Verifies that the goods match the transit documentation.
• Unloading Comment: Final message ending the transit procedure.
• Temporary Storage Notification: In some countries, such as Germany, a separate notification confirms that goods are now in temporary storage.

Each transit procedure is uniquely identified by a Master Reference Number (MRN), which must be entered in SAP—typically in the inbound delivery header—so that the system can link the physical goods to the customs procedure.

4. Integration Scenario: SAP GTS with SAP S/4HANA

SAP GTS integrates seamlessly with SAP S/4HANA to manage customs declarations and discharge transit procedures. This integration ensures that legal obligations are met while maintaining operational efficiency.

A typical (Purchase-to-Pay) process flow includes:

1. Purchase Order creation in SAP S/4HANA.
2. Inbound Delivery representing the supplier’s advance shipping notification.
3. Customs Shipment creation in SAP GTS from the inbound delivery header.
4. Arrival Notification sent to customs.
5. Unloading Permission received electronically.
6. Goods Receipt posted in SAP S/4HANA.
7. Material Document generated and transferred to SAP GTS.
8. Customs Declaration created from the material document to place goods under a subsequent procedure.

Note that a customs import declaration can also be triggered based on the “Purchase Order” or “Inbound Delivery” by standard, depending on the customer’s context. Furthermore, SAP GTS also offers standard integration with SAP Transportation management and SAP Extended Warehouse Management embedded in S/4HANA. The above flow is only showcasing one example.

7. Benefits of SAP GTS Integration

Integrating SAP GTS into the import process offers several strategic advantages:

• Legal Compliance: Ensures all customs procedures are followed according to EU law.
• Automation: Reduces manual intervention and minimizes errors.
• Visibility: Provides real-time tracking of goods and customs status.
• Flexibility: Supports multiple customs procedures and integration models.

8. Considerations and Best Practices

To ensure successful implementation and compliance, importers should consider the following:

• MRN Timing: The MRN must be entered into the inbound delivery for transit procedures integrating with SAP GTS.
• Master Data Setup: Products must be classified under the correct customs tariff.
• Authorization Mapping: Authorized consignee and Authorized locations must be maintained in SAP GTS.
• Feeder System Flexibility: While this whitepaper focuses on SAP S/4HANA, SAP GTS can also integrate with non-SAP systems via IDocs, RFCs, or web services.

9. Conclusion

SAP GTS provides a comprehensive solution for managing EU import compliance. By aligning customs legislation with system capabilities, businesses can streamline operations, reduce risk, and maintain full control over non-Union goods. This blogpost focused on the legal and process foundations using SAP GTS in a standard SAP integration scenario. Operational execution with SAP EWM will be covered in a separate paper – part 2.