SAP global trade services Making it work for you Deloitte is SAPs global preferred partner in Governance, Risk & Compliance. We have extensive experience of working with clients across all areas of customs compliance and planning. Companies conducting business across borders face new challenges driven by increased economic globalisation and greater levels of regulation. About 30% of world trade crosses borders and there is 10% yearly growth in global trade volume. Anti-terrorism measures and the fall off in paper-based communication are having far reaching effects on the requirements for systems that model foreign trade processes. Since 9/11, more and more stringent regulations are being introduced, such as the Customs and Trade Partnership against Terrorism in the US and Authorised Economic Operator (AEO) in the EU, license requirements for dual-use products and export control procedures. The AEO status is an accreditation regime to prove customs and supply chain compliance as of January 1, 2008. The impact of not having AEO status will include more customs inspections, longer lead times, higher demurrage charges, etc. leading to, in effect, a twin track clearance system with customs declaring their intention to focus consignment inspections on traders who are not AEO certified, whilst AEO traders are likely to be fast tracked. The EU and many other countries are introducing an eCustoms environment, replacing the paper trail with the electronic customs clearance process, inter-connecting the Customs authorities internationally to combat fraud and increase security levels in the international movement of goods. Addressing the new regulatory environment and the automation of customs processes is a duty and not a virtue, especially because of the supply chain impact and the financial penalties for non-compliance. SAPs Global Trade Services (GTS) enables you to: Ensure regulatory trade compliance and AEO accreditation to maintain a smooth supply chain and avoid fines for non- compliance. Lower the cost of compliance and reduce the risk profile by establishing a corporate- wide standard for trade processes across SAP and non-SAP systems. Expedite customs clearance reduce cycle times and ensure faster, more predictable delivery to customers by minimising delays at national borders. Automate the management of customs procedures such as customs warehousing defer or eliminate duty payments. Manage and maintain a correct product classification. Automation of regional trade agreement processes: Trade Preference Processing capabilities to utilise benefits of EU Trade Agreements and NAFTA. Some things you need to know The European Commission approved new regulatory changes (October 2006). The authorised Economic Operator accreditation and fast clearance track will take effect on 01/01/08. A Community-wide Risk Profiling Database will score operator compliance as from 01/01/09. The paperless customs environment for all imports and exports is being introduced in all Member States and links in all Customs authorities. The pre-arrival and pre-departure notification procedures will require the filing of consignment data before the goods leave the port of departure as from 01/07/09 (24 hours for sea freight). Typical findings and opportunities An average FTSE 500 company will declare between 500 to 2,000 transactions per month with UK Customs, with approximately 50 technical data fields to complete per transaction. UK HMRC reports (JCCC Paper (05) 35) reveal an error rate of over 20%. The SAP-GTS application enables businesses to automate and streamline complex import and export processes to ensure full regulatory compliance, expedite customs clearance, mitigate the financial risk of global transactions and take full advantage of international trade agreements. Full visibility of the supply chain allows organisation to move from landed cost to a delivered profit basis. 18345 lb SAP Global 13/3/07 7:16 am Page 1 In this publication, Deloitte refers to one or more of Deloitte Touche Tohmatsu (DTT), a Swiss Verein, its member firms, and their respective subsidiaries and affiliates. As a Swiss Verein (association), neither DTT nor any of its member firms has any liability for each others acts or omissions. Each of the member firms is a separate and independent legal entity operating under the names Deloitte, Deloitte & Touche, Deloitte Touche Tohmatsu, or other related names. Services are provided by the member firms or their subsidiaries or affiliates and not by the DTT Verein. In the UK, Deloitte & Touche LLP is the member firm of DTT, and services are provided by Deloitte & Touche LLP and its subsidiaries. For more information, please visit the firms website at www.deloitte.co.uk Deloitte & Touche LLP is authorised and regulated by the Financial Services Authority. This publication has been written in general terms and therefore cannot be relied on to cover specific situations; application of the principles set out will depend upon the particular circumstances involved and we recommend that you obtain professional advice before acting or refraining from acting on any of the contents of this publication. Deloitte & Touche LLP would be pleased to advise readers on how to apply the principles set out in this publication to their specific circumstances. Deloitte & Touche LLP accepts no duty of care or liability for any loss occasioned to any person acting or refraining from action as a result of any material in this publication. Deloitte & Touche LLP 2007. All rights reserved. Deloitte & Touche LLP is a limited liability partnership registered in England and Wales with registered number OC303675. A list of members names is available for inspection at Stonecutter Court, 1 Stonecutter Street, London EC4A 4TR, United Kingdom, the firms principal place of business and registered office. Tel: +44 (0) 20 7936 3000. Fax: +44 (0) 20 7583 1198. Designed and produced by The Creative Studio at Deloitte, London. Member of Deloitte Touche Tohmatsu The most important key benefits of SAP-GTS include: Higher accuracy rate of data filed with Customs or Customs Border Protection Avoidance of penalties and legal fees. Avoidance of supplying to restricted parties, into embargoed countries, tariff violations, etc. A reduction of processing costs and fees. Reduce process time in screening and licensing. Reduce brokers fees. Reduce customer service time. A reduction in shipping time Decrease inventory from reduced in-transit time and variability. Reduce lost orders. Minimum impact to supply chain lead times. Improved IT environment Eliminate redundant systems. Reduce integration costs. Facilitate the Authorised Economic Operator (AEO) accreditation Control supply chain processes and audit trail. Business confidence on time critical cross border movements. Meet regulatory changes with minimum impact on business trade. Improve management visibility and accuracy of customs classification and operation of customs regimes. Reduce cost and shorten delivery times Gain competitive advantage through AEO certification and use of customs simplification measures. Enhanced compliance reputation with fiscal authorities. How Deloitte can help Deloitte has a multi-disciplinary team that understand in detail what the new global trade environment means for your business. As SAPs global preferred partner in Governance, Risk & Compliance, our team has extensive experience of working with clients across all areas of customs compliance and planning. We can provide a unique full-suite of SAP services, including Tax Planning & Optimisation, Regulatory Compliance and SAP Technology. Our comprehensive and flexible approach, from advisory service to implementation and support, can be customised to your particular needs. Typical commercial responses have included: Review of systems and processes addressing Customs requirements. Readiness preparation for Authorised Economic Operator (AEO) status. In-sourcing of Customs Compliance. Contacts David Dutt Consulting Tel: +44 20 7303 0010 Email: ddutt@deloitte.co.uk Mark Edwards Consulting Tel: +44 20 7007 9941 Email: markredwards@deloitte.co.uk Tajinder Bhalla Tax Management Consulting Tel: +44 (0) 7974 422526 Email: tbhalla@deloitte.co.uk Franky De Pril Customs & International Trade Tel: +44 20 7007 0980 Email: frankydepril@deloitte.co.uk SAP global trade services As is status process mapping Assessment and review To be model (incl GAPs) Design and implement Operate Optimise Project management. Functional implementation (includes application configuration, development and testing). Technical implementation (installation, BI/BW, archiving, load, convert. Change and learning (HR, organisational design, training development and delivery). Data management/ maintenance. Cutover/transition. Legal watch. Customs authority facilitation. Communication out-tasking. Service/Help Desk (Legal). Tax efficient SCM. Tax compliant SCM. Supply chain optimisation (i.e. service parts logistics). Enabling technology assessment. Transformation plan. System integration/design. Project management. Business case (feasibility). AEO readiness assessment. AEO licence facilitation. Advisory Services Implementation Services Support Services Deloitte provides integrated services to its clients, managing tax, risk and compliance issues within the system environment Deloitte roadmap and service model for SAP GTS 18345 lb SAP Global 13/3/07 7:16 am Page 2