letter of credit process

Letter of Credit ProcessingPDF download from SAP Help Portal:http://help.sap.com/saphelp_gts10/helpdata/en/4a/812ca476c65767e10000000a421937/content.htm

Created on April 05, 2015

The documentation may have changed since you downloaded the PDF. You can always find the latest information on SAP Help Portal.

NoteThis PDF document contains the selected topic and its subtopics (max. 150) in the selected structure. Subtopics from other structures are not included.

2015 SAP SE or an SAP affiliate company. All rights reserved. No part of this publication may be reproduced or transmitted in any form or for any purposewithout the express permission of SAP SE. The information contained herein may be changed without prior notice. Some software products marketed by SAP SEand its distributors contain proprietary software components of other software vendors. National product specifications may vary. These materials are provided bySAP SE and its affiliated companies ("SAP Group") for informational purposes only, without representation or warranty of any kind, and SAP Group shall not beliable for errors or omissions with respect to the materials. The only warranties for SAP Group products and services are those that are set forth in the expresswarranty statements accompanying such products and services, if any. Nothing herein should be construed as constituting an additional warranty. SAP and otherSAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP SE in Germany and othercountries. Please see www.sap.com/corporate-en/legal/copyright/index.epx#trademark for additional trademark information and notices.

Table of content

PUBLIC 2014 SAP SE or an SAP affiliate company. All rights reserved.

Page 1 of 18

Table of content1 Letter of Credit Processing1.1 Maintaining Master Data for Letter of Credit Processing1.1.1 Maintaining Business Partners1.1.2 Entering Letters of Credit1.1.3 Displaying Country-Country Group Assignments1.2 Letter of Credit Processing Export Process1.2.1 Maintaining a LOC Determination Strategy1.2.2 Assigning a Letter of Credit Manually1.2.3 Simulation of a Business Transaction1.2.4 Document Printing and Communication for Letters of Credit1.2.4.1 Printer Determination1.2.4.2 Message Determination1.2.4.3 Output Monitoring of Activated Messages1.2.5 Archived Customs Document Display1.3 Letter of Credit Processing Import Process1.3.1 Maintaining a LOC Determination Strategy1.3.2 Assigning a Letter of Credit Manually1.3.3 Simulation of a Business Transaction1.3.4 Document Printing and Communication for Letters of Credit1.3.4.1 Printer Determination1.3.4.2 Message Determination1.3.4.3 Output Monitoring of Activated Messages1.3.5 Archived Customs Document Display1.4 Monitoring in Letter of Credit Processing1.4.1 Displaying Existing Customs Documents1.4.2 Display Existing Export Customs Declarations1.4.3 Displaying Blocked Letter of Credit (LOC) Documents1.4.4 Display Assigned Letter of Credit Documents


Page 2 of 18

1 Letter of Credit Processing You can use Letter of Credit (LOC) Processing in Global Trade Services (GTS) to mitigate the financial risks involved in global trade. You can integrate thisapplication with your import and export transactions, minimizing risk in your international trade activities while speeding up process flows at the same time. Youcan monitor delivery deadlines and document receipts better for legal control purposes. You can use the following functions to minimize the risks of your import andexport transactions:

You can maintain letters of credit, which you receive from banks, in the letter of credit master. You can use the following LOC types:RevocableIrrevocable, unconfirmedIrrevocable, confirmed

You can enter all relevant delivery and document data in the header data of the letter of credit. You can also enter internal and external LOC numbers,Incoterms, company codes, addresses, and administrative data. The item data includes status data, business partner data, values, and bank data.Integrated inbound and outbound logistics lets you assign letters of credit to import and export documents.The system detects whether your import or export business partner is relevant for Letter of Credit Processing, which means you have to assign a letter ofcredit to that business partner.You can enter bank master data by transferring the initial data from your feeder system to the GTS system and then enrich it in business partnermaintenance.You can monitor the status of your letters of credit with the following display options:

Existing letters of creditAssigned letters of creditBlocked documents

Two different users must carry out the review of the letter of credit its subsequent activation.You can print documents in accordance with the regulations for a letter of credit.

PrerequisitesFor more information about the Customizing settings for Letter of Credit Processing, see the Configuration Guide for Letter of Credit Processing at the SAP ServiceMarketplace under service.sap.com/swdc Download Installation and Upgrades Entry by Application Group SAP Application Components SAP Global Trade Services (GTS) SAP GTS Installation and Upgrade .

Process

Imports with Letters of CreditThis scenario describes the process of importing goods to your country using a letter of credit.Import with Letter of Credit

1. As an importer, you request a quotation from an exporter for goods that you want to purchase. The quotation could include shipping and insurance costs.2. After you receive a quotation from the exporter, you create a purchase order based on that quotation.3. The exporter creates a pro forma invoice and sends it to you.4. You open a letter of credit at the opening bank in the country of destination (import country). During this transaction, you have to notify the opening bank

which documents they need from the exporter. As an importer, you not only need the documents required for customs, but also the documents that otherservice providers need to handle your goods traffic, such as:

1. Bill of lading2. Commercial invoice3. Export packing list4. Single Administrative Document (EU only)5. Shippers Export Declaration (U.S. only)6. Certificate of origin7. Insurance certificates8. Licenses (if needed)

5. You create a letter of credit in the GTS system. An import documentary credit gives your vendors a guarantee from your house bank that payment will berendered within a defined period when the documents listed in the letter of credit are provided. For you as importer, using a letter of credit reduces the risk ofhaving to pay for goods in advance or having to pay for goods or services that do not match the product descriptions in the letter of credit.

6. If you use a letter of credit, the vendor dies not have to demand advance payment to safeguard the delivery; in addition, because the letter of creditguarantees the transaction, your vendor will often offer a better price.

7. The opening bank sends the letter of credit to the advising bank in the exporter's country.8. The advising bank notifies the exporter that a letter of credit has been opened in his favor.9. The exporter dispatches the goods in accordance with the conditions defined in the letter of credit.

10. The exporter provides the appropriate documents to the advising bank to document that the goods were dispatched in agreement with the letter of creditconditions.

11. The advising bank pays the exporter based on the received documents.12. The advising bank sends the documents to the opening bank and receives payment.13. The opening bank provides you (the importer) with the documents.14. You calculate the import duty rates, submit the customs declaration within the legally defined period, and pay the customs duties.

NoteYou calculate the customs import duties and create a customs declaration in Customs Management.

Export with Letter of Credit


Page 3 of 18

This scenario describes the transaction for exporting goods and receiving payment using a letter of credit.

1. The importer requests a quotation for goods.2. You (the exporter) send the importer a quotation for the goods.3. The importer sends you a purchase order based on your quotation.4. You create a sales order based on the purchase order and send it to the importer, together with the invoice.5. Optional: You notify the importer of the exact delivery date and delivery quantity of the goods in an inbound delivery.6. The importer opens a letter of credit at the opening bank in the country of destination (import country).7. This letter of credit defines which documents are required by the customs authorities and other parties involved in handling your goods traffic, for example:

1. Bill of lading2. Commercial invoice3. Export packing list4. Shippers Export Declaration (U.S. only)5. Single Administrative Document (EU only)6. Certificate of origin7. Insurance certificates8. Licenses (if needed)

8. You can create and print all the above documents for customs processing, aside from the insurance certificates. The export documentary credit guaranteesthat payment will be made as long as you deliver the goods within the defined time frame and submit the documents defined in the letter of credit. This helpsyou, the exporter, reduce payment risk. You can also demand immediate payment within the framework of the LOC conditions (assuming the documentsare correct), improving your cash flow.

9. The opening bank sends the letter of credit to the advising bank in your country.10. The advising bank notifies you that a letter of credit has been opened in your favor.11. You dispatch the goods in accordance with the conditions defined in the letter of credit.12. You provide the advising bank in your country with the appropriate documents to document that the goods were dispatched in agreement with the letter of

credit conditions.13. The advising bank pays you for the goods, based on the received documents.14. The advising bank sends the documents to the opening bank and receives payment from the customer.15. The importer receives the goods, submits a customs import declaration, and pays the customs duties to the responsible authorities.16. You submit a customs declaration for the exported goods.

1.1 Maintaining Master Data for Letter of Credit Processing To use the functions for letter of credit processing, you need the underlying master data, including the business partners whose letters of credit you need toexecute your business processes. You also have to enter the letters of credit themselves.You can also display the assignment of country to country group, which you need to determine and assign letters of credit for a business transaction at the countrygroup level (see Assigning Countries to Country Groups).

ProcessYou need to maintain the following master data for the letter of credit processing:

1. Business partners (see Maintaining Business Partners)2. Letters of credit (see Entering Letters of Credit)


Page 4 of 18

1.1.1 Maintaining Business Partners The system for Global Trade Services (GTS) uses the SAP business partner concept. The GTS system contains functions for creating, changing, and displayingbusiness partners. In turn, these business partners can be persons, organizations, and organizational groups with which your company has trade relationships forprocessing in GTS. In some business transactions, such as the import process, a business partner can assume different partner functions in accordance withcustoms requirements.

NoteYou have already defined your own company organization, consisting of foreign trade organizational unit and legal unit or administrative unit and plant, inCustomizing. You can also enter additional information for your existing organizational units in the business partner functions, as well as define your clerks asseparate business partners.

In addition to the initial and period transfer of business partner master data from your feeder system (or systems), you have to create or maintain new businesspartner master data for certain functions that you need in the GTS system. When you create business partners in the GTS system, you have to assign themfunctions there.

PrerequisitesYou have made the following Customizing settings in the GTS system:

Create number ranges for business partnersCreate and assign partner functionsActivate business partners for the GTS areas

For more information, see the Configuration Guide under the following path: service.sap.com/swdc Download Installation and Upgrades Entry by Application Group SAP Application Components SAP Global Trade

Services (GTS) SAP GTS Installation and Upgrade.

FeaturesIn addition to the organizational units for your own company, you can create the following functions that you need for your own processes or transfer them from thefeeder system to GTS.

Product area/Business partnerfunction

Sanctioned Party ListScreening

Legal Control CustomsManagement

PreferenceProcessing

Letter of CreditProcessing

Restitution

Government agency,such as customsauthorities

x x

Data providers x x x x xCustomers (Sales &Distribution), such assold-to parties, ship-toparties, and bill-toparties

x x x x x x

Vendors (MaterialsManagement)

x x x x x

Business partners fromFinancial Accounting(FI)Employees fromHuman CapitalManagement forsanctioned party listscreening

x

Employees, forexample, as contactpersons or responsibleclerks incommunication with theauthorities

x x x x

Activities

CautionBusiness partners that you have already used in functions of the GTS system are referenced in monitoring and audit functions. Therefore, deleting thesebusiness partners would result in inconsistencies.


Page 5 of 18

To create or display business partners in the individual applications, choose Maintain Business Partners in the area menu for the master data. In theLegal Control area, for example, choose Compliance Management Classification / Master Data Business Partner Maintain Business Partners

.You can use the application toolbar to create a new person, organization, or group.You have to at least enter an address and the respective business partner function for each business partner. The functions for persons, organizations, andgroups are dependent on the partner functions that you define in your Customizing settings.You can also select an internal or external grouping, depending on whether you transferred the business partners from a feeder system or created them inthe GTS system.You can then enter the address data and other administrative data. For more information, see the field help.You can set the Archiving Flag on the Status tab page to ensure that this business partner is archived. If you want to block all transactions with thisbusiness partner, set the Not Released flag. If you set the Central Block flag, the system only excludes the business partner from certain businessprocesses. For more information, see the field help.You can create, maintain, and display additional information for a business partner in categories such as the following:

AddressAddress OverviewIdentificationControlPayment TransactionsStatus

To display the details for a specific business partner, choose Find Business Partner on the Find tab page.

1.1.2 Entering Letters of Credit You can create, maintain, and display letters of credit for import and export purposes in Global Trade Services. You have to maintain letters of credit in yoursystem when you notify your bank (opening bank) that your customer needs a letter of credit. After you create a letter of credit, you can assign it to an import orexport transaction in the system.To fulfill the dual-control principle, one user can create the letter of credit and set the status to Requested. A second user must be available to activate the letter ofcredit, however, or the system issues an error message.

NoteIf you have configured communication for letters of credit and implemented the connection, you can send and receive letters of credit electronically. This helpsto minimize potential errors in the transmission of letters of credit to the bank or when entering the data from letters of credit received from the bank.

PrerequisitesYou have configured the following settings in Customizing for GTS:

Define and activate the legal regulations for Letter of Credit ProcessingDefine the document type for letters of credit the desired attributesYou have implemented the Business Add-Ins (BAdIs) for electronic communication with the banks and your own programs to link letters of credit to thebanks' communication platform.

For more information about the Customizing settings and the Business Add-Ins, see the Configuration Guide for Letter of Credit Processing at the SAP ServiceMarketplace, under service.sap.com/swdc Download Installation and Upgrades Entry by Application Group SAP Application Components SAP Global Trade Services (GTS) SAP GTS Installation and Upgrade .

Procedure

Creating Letters of Credit1. Choose Risk Management Letter of Credit Processing Master Data Letters of Credit Maintain Letter of Credit Create LoC .2. Select the desired legal regulation and letter of credit type from the dropdown lists.

NoteIf you have already created letters of credit, you can use an existing letter of credit as a template to create new LOCs. To do so, select the existing letterof credit in the input help for the Template field.

3. The following unchangeable data appears in the general data area in the maintenance screen:1. Legal regulation (from your selection in the initial screen)2. Letter of credit type (from your selection in the initial screen)3. Internal number (the system generates and assigns this number automatically)

Now maintain the following general data:1. External number (issued by the opening bank)2. Validity period (issued by the opening bank)

4. You can now maintain the following attributes, depending on your Customizing settings:1. Status (Created, Requested, Activated)

If necessary, press the pushbutton to enter a comment.Note that a single user can create the letter of credit and set the status to Requested . A second user must be available to activate the letter of credit,however, or the system issues an error message. This approach follows the dual-control principle.

2. Banks1. Choose the icon to add a new line.2. Then choose Advising Bank or Opening Bank from the dropdown list in the Partner Function in Document column. The value you select


Page 6 of 18

depends on whether you are creating the letter of credit in the system as an exporter or an importer.

NoteAdvising bank: Bank that notifies the exporter of a letter of credit or sends the original letter of credit to an exporter.Opening bank: Bank that summarizes the requirements for the goods to be imported in a letter and sends it to the bank in the executor'scountry that is, to the advising bank.

3. Then choose your business partner (business partner number of the bank).4. Enter the percentage of the LOC value that you have to pay the bank in fees or enter the absolute amount in the correct currency.

3. DocumentsThese documents are the customs declarations and notifications that you send, receive, or (possibly) print out or upload. To enter the correspondingdocuments, choose the icon to insert a line and use the input help to select the desired EDI messages.

NoteSet the Letter of Credit Printing indicator if you need to print the document to fulfill the requirements in the letter of credit.

4. DatesThe following dates are defined in the conditions of the letter of credit; they must be entered and adhered to:

1. Date on which the letter of credit was requested2. Date on which the letter of credit was officially opened by the opening bank3. Date on which you received the letter of credit4. Final delivery date as defined in letter of credit5. Final shipping date as defined in letter of credit6. Date on which the goods are presented to the customer

5. Foreign Trade OrganizationEnter the foreign trade organization for which the letter of credit was provided.

6. ValuesEnter the value of the letter of credit. The system automatically deducts value from the letter of credit when it is assigned or used in an import or exporttransaction. You can see the depreciated value that took place for the transaction, since the system provides the following information automatically:

1. Depreciation group and description2. Depreciated value3. Remaining value4. Currency

7. Partners (Export)In this function, you maintain the business partners that are involved in the import/export transaction and in letter of credit processing.

8. Terms of PaymentSelect the terms of payment for the letter of credit. Your selection also depends on the terms of payment that defined and assigned in the Customizingfor Global Trade Services , under General Settings .

9. TextsYou can enter additional user-defined texts here, such as international notes for colleagues in different languages.

10. AdministrationThis data is set by the system and shows you the following:

1. Created by2. Created on3. Changed by4. Changed on

11. Assigned DocumentsYou may have to add more import/export-relevant documents to the letter of credit, such as bills of lading, certificates of origin, and other documentsrequired by the conditions of the letter of credit.To display these documents, select the required line and choose Display Document from the menu bar.To delete existing documents, select the required line and choose Delete Document from the menu bar.

12. Communication

CautionIf you have configured the Customizing settings, implemented the necessary BAdIs, and implemented your own programs to link your letters ofcredit to the business partner's communication platform, you can use the electronic communication functions.You can choose between printing messages or electronic messages on the Outbound tab page.

1. Select the desired message and choose Execute . Depending on your settings, the system either transmits or prints the letter of credit.2. To print or send it again, select the desired message and choose Repeat Action . The system duplicates the selected message, and you can

print it out or send it as needed.3. You can also display the Action Details , a Preview , and the Processing Log .

The Inbound tab page displays the electronic messages with the received letter of credit. You can display the Details and the ProcessingLog .

Changing Letters of Credit1. Choose Risk Management Letter of Credit Processing Master Data Letters of Credit Maintain Letter of Credit Change LoC .2. Select the desired legal regulation and letter of credit type from the dropdown lists.3. The following unchangeable data appears in the general data area in the maintenance screen:

1. Legal regulation (from your selection in the initial screen)2. Letter of credit type (from your selection in the initial screen)3. Internal number (the system generates and assigns this number automatically)

4. You can now change any necessary attributes, for example, if you want to change the status of the letter of credit to Requested and enter a new commentin the comment field. You can also enter new documents as needed or delete existing documents.


Page 7 of 18

Displaying Letters of Credit1. Choose Risk Management Letter of Credit Processing Master Data Letters of Credit Display Existing Letters of Credit .2. Enter the selection criteria as described above.3. You can now display all the data in the letter of credit. For example, the Values attribute shows you the amount that has already been depreciated from the

letter of credit in an import or export transaction.

1.1.3 Displaying Country-Country Group Assignments You can display an overview list of the countries that you have assigned to country groups in Customizing. You can display all the country groups that contain aspecific country or display all the countries assigned assigned to a country group. Country groups are relevant in all areas of the application, where they have thefollowing significance:

Sanctioned party list screening, embargo check, and legal controlYou can manage the settings for legal control at group level. If you assign Iran and North Korea to the same group, for example, you can control thesecountries at the group level.Customs ManagementYou can enter master data at the country group level. When you enter customs duty rates manually, for example, you can decide whether you want to enterthem at the country level or the country group level.Preference ProcessingYou can use country groups to define preference zones. As a result, you can define and activate preference agreements that are valid for a common legaljurisdiction simultaneously for all the countries in a preference zone.Letter of Credit ProcessingLetters of credit can be valid for country groups. Therefore, you group together all the countries in which you want to use a letter of credit.RestitutionYou need country groups in restitution to determine CAP licenses and the restitution rates.Country groups make it possible to consolidate settings and master data, helping you minimize the required maintenance effort.

ActivitiesTo display the country assignment for the respective areas, go to the area menu of and choose:

Compliance Management Classification / Master Data Country Groups Display Country Assignment to Country Group Customs Management Master Data Geography Country Groups Display Country Assignment to Country Group Risk Management Preference Processing Master Data Agreement-Related Data Display Country Assignment to Country

Group/Agreements . Risk Management Letter of Credit Processing Master Data Country Groups Display Country Assignment to Country Group Risk Management Restitution Master Data Country Groups Display Country Assignment to Country Group

Enter the country whose country groups you want to display, or use the input help to select a country.To display the country groups for several countries, enter a range.Choose Execute to display the country groups that appear in your selected countries.If you want to display all the countries that are used in a country group, you can enter a country group (or use the input help to choose one) and chooseExecute .

The system lists all the countries that you have assigned to the country group.If you want to check country or country group assignments for a specific point in time, you can also specify a validity period in the selection criteria.

Letter of Credit Processing Export Process The sections below describe the steps of a letter of credit (LOC) process when you are an exporter who has requested a letter of credit from a customer.

PrerequisitesYou have configured the system for letters of credit. For more information see the Configuration Guide for Risk Management - Preference Processing at theSAP Service Marketplace , under service.sap.com/swdc Download Installation and Upgrades Entry by Application Group SAP

Application Components SAP Global Trade Services (GTS) SAP GTS Installation and Upgrade .You have maintained all the master data for letter of credit processing.

Process1. Maintain the determination strategies that you want the system to use in assigning the correct LOC type to your import transactions.2. Maintain the parameters for printing letter of credit documents.3. Simulate the LOC process before you go live with the application.4. Monitor the following objects:

1. Customs documents2. Letter of credit data3. Archived customs documents

Maintaining a LOC Determination Strategy


Page 8 of 18

UseThis function allows you to create the logic by which SAP Global Trade Services ( SAP GTS ) should find a suitable type of letter of credit (LOC) for a specificbusiness transaction. You create the rules by which SAP GTS should find the type of LOC for import and export processes. The steps involved in this areexplained below. For more information about maintaining determination strategies in SAP GTS , such as for licenses, see License Determination Service forImport/Export.

PrerequisitesYou have completed the following steps in the Implementation Guide (IMG) for SAP GTS :

Defined and activated a legal regulation for the Letter of Credit service Defined the relevant partner groups for LOC processing Defined LOC types Defined and assigned LOC determination procedures to the appropriate legal regulations You defined and assigned the determination procedure to your legal regulations in the Implementation Guide (IMG) for SAP GTS , which the system uses to

find the most appropriate LOC for your customs document. Even if you configure all the settings in the IMG for the system to find a strategy for determiningLOCs, the parameters in the search sequence are empty until you maintain values in the application.

For more information, see the Configuration Guide for SAP Risk Management - Letter of Credit Processing at the SAP Service Marketplace , underservice.sap.com/swdc Download Installation and Upgrades Entry by Application Group SAP Application Components SAP Global TradeServices (GTS) SAP GTS Installation and Upgrade .

Procedure 1. Choose SAP Risk Management Letter of Credit Processing Export/Import Control Data Maintain Determination Strategy. 2. Enter the legal regulation (this is mandatory) and any additional selection criteria you require. 3. In the determination strategy maintenance screen, you decide under which legal regulation you should have the system search for a suitable type of LOC (for

example, you may have defined and activated one legal regulation for exports to China and a different legal regulation for imports from Taiwan). You alsodecide which type of LOC you require for specific partner groups (for example, some partner groups are customers to whom you export and other partnergroups may be vendors from whom you import). Finally, the system determines, in accordance with your determination strategies, which LOCs are availablefor assignment to the customs document.

4. Now you need to specify the criteria you want the system to use when it is searching for a suitable LOC: a. Validity

i. You can enter validity dates if you know the determination strategy should only be used for a particular period of time. Otherwise, you can enter thecurrent date as the valid-from date and December 31, 9999 as the valid-to date.

ii. If you do not want the system to check the validity period, set the No Control flag. b. Criteria

In the Criteria group box, you define the prerequisites for the system to determine specific LOCs. The system displays the following data and the datais dependent on the definitions you made in Customizing: i. Legal regulations ii. Countries iii. LOC-relevant partner groups iv. Types of LOCSelect a legal regulation, a country or countries, a LOC-relevant partner group and the type of LOC you want the system to assign if the previous criteriaare met.

c. Time SeriesSelect the level of the determination strategy from the dropdown list. The selection is dependent on your Customizing settings in the IMG activity DefineDetermination Procedure for Automatic Determination of LOC Types .

5. Once you have finished, choose the button Apply Selection . The system includes your criteria selection in the determination strategy. You can use thefollowing buttons to apply or delete determination strategies: a. Apply Selection b. Delete Selection c. Copy Individually d. Delete Individually

ResultsThe system can now automatically determine LOCs for your customs documents based on the determination strategies you created.

Assigning a Letter of Credit Manually

UseYou can assign letters of credit (LOCs) to customs documents manually, for example, if you want to override the system assignment, or if the system could notdetermine a suitable LOC.


Page 9 of 18

PrerequisitesFor more information, see the prerequisites for maintaining an LOC and maintaining an LOC determination strategy.

ProcedureManual Assignment of an LOC to a Customs Document 1. To assign a letter of credit to a customs document manually, you have to switch to change mode. To do this, choose SAP Risk Management Letter of

Credit Processing Export/Import Monitoring Letter of Credit Data Process Manual Assignment Display Manual Assignment . 2. Enter the relevant customs document number. This could be a feeder system document number, a tracking number or a T1 document number. You can use

the input help to find the appropriate document number. 3. If you use the input help to select the document number, the system defaults the rest of the required data automatically. Otherwise you must also enter the

logical system and the technical object type manually. 4. Choose Enter . 5. 8. The system displays the export customs document data including the automatically assigned letter of credit. In the header data, the system displays the

items and a legal control status. If no LOC is assigned to an item, the reason may be that the legal regulation for LOC processing has not been activated forthat document type of that item category, for example. The system displays an appropriate text for that item. You can then proceed with either activating thelegal regulation or changing the assignment of LOC.

6. To change the LOC, select the automatically assigned LOC at item level and choose Delete . 7. You can then select a more suitable LOC from the list of LOCs that are available in the system and displayed in the bottom left-hand side of the screen,

under Usable Licenses . 8. To display the LOC before assigning it, choose Display License . 9. Once you have found a suitable LOC, choose Copy License to Header . 10. When you save your changes, the system assigns the new LOC to the item in your customs document.Display a Manual Assignment of an LOC to a Customs Document 1. You can also use the display mode for information purposes, for example, to display which other LOCs in the system are available for the customs

document. To do this, choose SAP Risk Management Letter of Credit Processing Export/Import Monitoring Letter of Credit Data Process Manual Assignment Display Manual Assignment .

2. Enter the relevant customs document number. This could be a feeder system document number, a tracking number or a T1 document number. You can usethe input help to find the appropriate document number.

3. If you use the input help to select the document number, the system defaults the rest of the required data automatically. Otherwise you must also enter thelogical system and the technical object type manually.

4. Choose Enter . 5. 8. The system displays the export customs document data including the automatically assigned letter of credit. In the header data, the system displays the

items and a legal control status. If no LOC is assigned to an item, the reason may be that the legal regulation for LOC processing has not been activated forthat document type of that item category, for example. The system displays an appropriate text for that item. You can then proceed with either activating thelegal regulation or changing the assignment of LOC in editing mode.

6. Before proceeding to change mode, you can display LOCs that are available for manual assignment in the system. This way you can find a suitable LOC forthe customs document. To display the LOC before assigning it, choose Display License .

Simulation of a Business Transaction

UseYou can simulate the check for a letter of credit (LOC) assignment to an import or export customs document. The advantage of the simulation tool is that you canquickly find out whether you require a new or additional LOC for your business transactions before you actually begin the import or export process, saving youboth time and money.

Activities To use the simulation function, you choose SAP Risk Management Letter of Credit Processing Import/Export Monitoring Simulation Simulate

Business Transaction. In the initial input screen you need to enter the name of the feeder system, the organizational data from the feeder system and the appropriate document data,

depending on whether you want to simulate a control check on an export or an import transaction. Choose Execute . The system simulates a legal control check on the outbound or inbound document from the feeder system and based on the results of the check, you can

decide whether or not you need to obtain a LOC for any of the products.

1.3.4 Document Printing and Communication for Letters of Credit You can use the Global Trade Services (GTS) system to create and print documents for customs processing and letters of credit. You can print all relevantdocuments and forms that you need for letter of credit processing in GTS in the GTS system.


Page 10 of 18

IntegrationYou can print all GTS documents using the Adobe Document Server (ADS), which is contained in the GTS system. The Adobe Acrobat Reader enables a printpreview.

PrerequisitesYou have configured the communication processes for printing documents. For more information, see the Configuration Guide for Customs Management at the SAPService Marketplace, under the following path:

service.sap.com/swdc Download Installation and Upgrades Entry by Application Group SAP Application Components SAP Global TradeServices (GTS) SAP GTS Installation and Upgrade.

FeaturesGTS includes compliant documents for transit and customs processing for NCTS country certification in Switzerland, the Netherlands, France, and Austria.The system determines the relevant documents for the individual business transactions. The system provides the information required for each document usingcentral print data retrieval with a standardized interface. This reduces the time required for the communication process with the customs authorities and improvesdata quality.

ActivitiesYou can print your documents either directly when you create a customs shipment or for all customs shipments under monitoring for activated messages.

1.3.4.1 Printer Determination

UseFor each message, you can determine the output device for printing. You can define this for each user or legal unit.

Activities 1. Choose SAP Risk Management Letter of Credit Processing Export Print Processing Parameters Printer Determination . 2. Select New entries . 3. Select the message (mandatory), and the legal unit or the user using the input help. 4. Assign the output device. For more information, see the field help. 5. Save your entries.

1.3.4.2 Message Determination

UseYou can preselect documents for each business transaction. When you create a customs shipment, the system automatically proposes the relevant messagesfor the process in question.

Activities 1. Choose SAP Risk Management Letter of Credit Processing Export Print Processing Parameters Message Determination . 2. Choose New Entries . 3. Select the message type (mandatory), and assign a legal regulation to it (mandatory). 4. You can define further determination parameters such as the country of destination or the means of transport at the border ( Dom. MOT) 5. Save your entries.

ExampleYou want to restrict the message Transit T1/T2 (PR010) to transit procedures in Germany. Assign the legal regulation on which this process is based (transitprocedure NCTS Germany: TRSDE) to the message.


Page 11 of 18

Output Monitoring of Activated Messages

UseYou use this function to perform print transactions with customs shipment documents. You can process your documents online, or as a batch job in thebackground if you want to perform a print run overnight for all global trade documents created during the day.

Activities 1. Choose SAP Risk Management Letter of Credit Processing Export Print Processing Cockpit Output Monitoring for Active Messages . 2. Enter the required search criteria, such as the message type or person responsible, and choose Execute . 3. The system lists all the relevant documents. 4. Select the required documents and click on Execute message to print them. 5. You also have the following options for processing active messages:

a. Print Preview : The result of printing is displayed first on the screen. b. Display Processing Log : This makes particular sense if errors occurred for the processed messages. c. Output Parameters : The system displays the print attributes such as number of printouts, or the printer.

In the customs shipment document, you can change the output parameters. For more information, see Printer Determination.

1.3.5 Archived Customs Document Display

UseYou can use this function in SAP Global Trade Services ( SAP GTS ) to display all of the customs documents from SAP GTS that you have archived.

Activities To display an overview of the archived documents, choose SAP Risk Management Letter of Credit Processing Import/Export Monitoring

Archiving Display Archived Customs Documents . If you want to restrict your search to specific archived customs documents, enter the relevant selection criteria. To display a list of the customs documents that meet the selection criteria you specified, choose Execute . To display a specific document, select it in the list, and choose Display .

Letter of Credit Processing Import Process The sections below describe the steps of a letter of credit (LOC) process when you are an importer who has to give the exporter a letter of credit.Prerequisites

You have configured the system for letters of credit. For more information see the Configuration Guide for Risk Management - Preference Processing at theSAP Service Marketplace , under service.sap.com/swdc Download Installation and Upgrades Entry by Application Group SAP

Application Components SAP Global Trade Services (GTS) SAP GTS Installation and Upgrade .You have maintained all the master data for letter of credit processing.

Process1. Maintain the determination strategies that you want the system to use in assigning the correct LOC type to your import transactions.2. Maintain the parameters for printing letter of credit documents.3. Simulate the LOC process before you go live with the application.4. Monitor the following objects:

1. Customs documents2. Letter of credit data3. Archived customs documents

Maintaining a LOC Determination Strategy

Use


Page 12 of 18

This function allows you to create the logic by which SAP Global Trade Services ( SAP GTS ) should find a suitable type of letter of credit (LOC) for a specificbusiness transaction. You create the rules by which SAP GTS should find the type of LOC for import and export processes. The steps involved in this areexplained below. For more information about maintaining determination strategies in SAP GTS , such as for licenses, see License Determination Service forImport/Export.

PrerequisitesYou have completed the following steps in the Implementation Guide (IMG) for SAP GTS :

Defined and activated a legal regulation for the Letter of Credit service Defined the relevant partner groups for LOC processing Defined LOC types Defined and assigned LOC determination procedures to the appropriate legal regulations You defined and assigned the determination procedure to your legal regulations in the Implementation Guide (IMG) for SAP GTS , which the system uses to

find the most appropriate LOC for your customs document. Even if you configure all the settings in the IMG for the system to find a strategy for determiningLOCs, the parameters in the search sequence are empty until you maintain values in the application.

For more information, see the Configuration Guide for SAP Risk Management - Letter of Credit Processing at the SAP Service Marketplace , underservice.sap.com/swdc Download Installation and Upgrades Entry by Application Group SAP Application Components SAP Global TradeServices (GTS) SAP GTS Installation and Upgrade .

Procedure 1. Choose SAP Risk Management Letter of Credit Processing Export/Import Control Data Maintain Determination Strategy. 2. Enter the legal regulation (this is mandatory) and any additional selection criteria you require. 3. In the determination strategy maintenance screen, you decide under which legal regulation you should have the system search for a suitable type of LOC (for

example, you may have defined and activated one legal regulation for exports to China and a different legal regulation for imports from Taiwan). You alsodecide which type of LOC you require for specific partner groups (for example, some partner groups are customers to whom you export and other partnergroups may be vendors from whom you import). Finally, the system determines, in accordance with your determination strategies, which LOCs are availablefor assignment to the customs document.

4. Now you need to specify the criteria you want the system to use when it is searching for a suitable LOC: a. Validity

i. You can enter validity dates if you know the determination strategy should only be used for a particular period of time. Otherwise, you can enter thecurrent date as the valid-from date and December 31, 9999 as the valid-to date.

ii. If you do not want the system to check the validity period, set the No Control flag. b. Criteria

In the Criteria group box, you define the prerequisites for the system to determine specific LOCs. The system displays the following data and the datais dependent on the definitions you made in Customizing: i. Legal regulations ii. Countries iii. LOC-relevant partner groups iv. Types of LOCSelect a legal regulation, a country or countries, a LOC-relevant partner group and the type of LOC you want the system to assign if the previous criteriaare met.

c. Time SeriesSelect the level of the determination strategy from the dropdown list. The selection is dependent on your Customizing settings in the IMG activity DefineDetermination Procedure for Automatic Determination of LOC Types .

5. Once you have finished, choose the button Apply Selection . The system includes your criteria selection in the determination strategy. You can use thefollowing buttons to apply or delete determination strategies: a. Apply Selection b. Delete Selection c. Copy Individually d. Delete Individually

ResultsThe system can now automatically determine LOCs for your customs documents based on the determination strategies you created.

Assigning a Letter of Credit Manually

UseYou can assign letters of credit (LOCs) to customs documents manually, for example, if you want to override the system assignment, or if the system could notdetermine a suitable LOC.


Page 13 of 18

PrerequisitesFor more information, see the prerequisites for maintaining an LOC and maintaining an LOC determination strategy.

ProcedureManual Assignment of an LOC to a Customs Document 1. To assign a letter of credit to a customs document manually, you have to switch to change mode. To do this, choose SAP Risk Management Letter of

Credit Processing Export/Import Monitoring Letter of Credit Data Process Manual Assignment Display Manual Assignment . 2. Enter the relevant customs document number. This could be a feeder system document number, a tracking number or a T1 document number. You can use

the input help to find the appropriate document number. 3. If you use the input help to select the document number, the system defaults the rest of the required data automatically. Otherwise you must also enter the

logical system and the technical object type manually. 4. Choose Enter . 5. 8. The system displays the export customs document data including the automatically assigned letter of credit. In the header data, the system displays the

items and a legal control status. If no LOC is assigned to an item, the reason may be that the legal regulation for LOC processing has not been activated forthat document type of that item category, for example. The system displays an appropriate text for that item. You can then proceed with either activating thelegal regulation or changing the assignment of LOC.

6. To change the LOC, select the automatically assigned LOC at item level and choose Delete . 7. You can then select a more suitable LOC from the list of LOCs that are available in the system and displayed in the bottom left-hand side of the screen,

under Usable Licenses . 8. To display the LOC before assigning it, choose Display License . 9. Once you have found a suitable LOC, choose Copy License to Header . 10. When you save your changes, the system assigns the new LOC to the item in your customs document.Display a Manual Assignment of an LOC to a Customs Document 1. You can also use the display mode for information purposes, for example, to display which other LOCs in the system are available for the customs

document. To do this, choose SAP Risk Management Letter of Credit Processing Export/Import Monitoring Letter of Credit Data Process Manual Assignment Display Manual Assignment .

2. Enter the relevant customs document number. This could be a feeder system document number, a tracking number or a T1 document number. You can usethe input help to find the appropriate document number.

3. If you use the input help to select the document number, the system defaults the rest of the required data automatically. Otherwise you must also enter thelogical system and the technical object type manually.

4. Choose Enter . 5. 8. The system displays the export customs document data including the automatically assigned letter of credit. In the header data, the system displays the

items and a legal control status. If no LOC is assigned to an item, the reason may be that the legal regulation for LOC processing has not been activated forthat document type of that item category, for example. The system displays an appropriate text for that item. You can then proceed with either activating thelegal regulation or changing the assignment of LOC in editing mode.

6. Before proceeding to change mode, you can display LOCs that are available for manual assignment in the system. This way you can find a suitable LOC forthe customs document. To display the LOC before assigning it, choose Display License .

Simulation of a Business Transaction

UseYou can simulate the check for a letter of credit (LOC) assignment to an import or export customs document. The advantage of the simulation tool is that you canquickly find out whether you require a new or additional LOC for your business transactions before you actually begin the import or export process, saving youboth time and money.

Activities To use the simulation function, you choose SAP Risk Management Letter of Credit Processing Import/Export Monitoring Simulation Simulate

Business Transaction. In the initial input screen you need to enter the name of the feeder system, the organizational data from the feeder system and the appropriate document data,

depending on whether you want to simulate a control check on an export or an import transaction. Choose Execute . The system simulates a legal control check on the outbound or inbound document from the feeder system and based on the results of the check, you can

decide whether or not you need to obtain a LOC for any of the products.

1.3.4 Document Printing and Communication for Letters of Credit You can use the Global Trade Services (GTS) system to create and print documents for customs processing and letters of credit. You can print all relevantdocuments and forms that you need for letter of credit processing in GTS in the GTS system.

Integration


Page 14 of 18

You can print all GTS documents using the Adobe Document Server (ADS), which is contained in the GTS system. The Adobe Acrobat Reader enables a printpreview.

PrerequisitesYou have configured the communication processes for printing documents. For more information, see the Configuration Guide for Customs Management at the SAPService Marketplace, under the following path:

service.sap.com/swdc Download Installation and Upgrades Entry by Application Group SAP Application Components SAP Global TradeServices (GTS) SAP GTS Installation and Upgrade.

FeaturesGTS includes compliant documents for transit and customs processing for NCTS country certification in Switzerland, the Netherlands, France, and Austria.The system determines the relevant documents for the individual business transactions. The system provides the information required for each document usingcentral print data retrieval with a standardized interface. This reduces the time required for the communication process with the customs authorities and improvesdata quality.

ActivitiesYou can print your documents either directly when you create a customs shipment or for all customs shipments under monitoring for activated messages.

1.3.4.1 Printer Determination

UseFor each message, you can determine the output device for printing. You can define this for each user or legal unit.

Activities 1. Choose SAP Risk Management Letter of Credit Processing Export Print Processing Parameters Printer Determination . 2. Select New entries . 3. Select the message (mandatory), and the legal unit or the user using the input help. 4. Assign the output device. For more information, see the field help. 5. Save your entries.

1.3.4.2 Message Determination

UseYou can preselect documents for each business transaction. When you create a customs shipment, the system automatically proposes the relevant messagesfor the process in question.

Activities 1. Choose SAP Risk Management Letter of Credit Processing Export Print Processing Parameters Message Determination . 2. Choose New Entries . 3. Select the message type (mandatory), and assign a legal regulation to it (mandatory). 4. You can define further determination parameters such as the country of destination or the means of transport at the border ( Dom. MOT) 5. Save your entries.

ExampleYou want to restrict the message Transit T1/T2 (PR010) to transit procedures in Germany. Assign the legal regulation on which this process is based (transitprocedure NCTS Germany: TRSDE) to the message.


Page 15 of 18

Output Monitoring of Activated Messages

UseYou use this function to perform print transactions with customs shipment documents. You can process your documents online, or as a batch job in thebackground if you want to perform a print run overnight for all global trade documents created during the day.

Activities 1. Choose SAP Risk Management Letter of Credit Processing Export Print Processing Cockpit Output Monitoring for Active Messages . 2. Enter the required search criteria, such as the message type or person responsible, and choose Execute . 3. The system lists all the relevant documents. 4. Select the required documents and click on Execute message to print them. 5. You also have the following options for processing active messages:

a. Print Preview : The result of printing is displayed first on the screen. b. Display Processing Log : This makes particular sense if errors occurred for the processed messages. c. Output Parameters : The system displays the print attributes such as number of printouts, or the printer.

In the customs shipment document, you can change the output parameters. For more information, see Printer Determination.

1.3.5 Archived Customs Document Display

UseYou can use this function in SAP Global Trade Services ( SAP GTS ) to display all of the customs documents from SAP GTS that you have archived.

Activities To display an overview of the archived documents, choose SAP Risk Management Letter of Credit Processing Import/Export Monitoring

Archiving Display Archived Customs Documents . If you want to restrict your search to specific archived customs documents, enter the relevant selection criteria. To display a list of the customs documents that meet the selection criteria you specified, choose Execute . To display a specific document, select it in the list, and choose Display .

Monitoring in Letter of Credit Processing

PurposeYou need to maintain an overview of the statuses of your letters of credit (LOCs) and business transactions. SAP Risk Management Letter of Credit providesyou with the tools to monitor the following:ExportCustoms documents/customs declarations

Display Existing Customs Documents Display Existing Export Customs Declarations Displaying Blocked Letter of Credit (LOC) Documents Display Assigned Letter of Credit Documents

ImportCustoms documents

Display Existing Customs Documents Displaying Blocked Letter of Credit (LOC) Documents Display Assigned Letter of Credit Documents

Process FlowYou can see which documents the system has blocked from further business transactions and you can react accordingly by assigning the appropriate LOCs tothose business partners who still require LOCs for you to complete your import or export transactions.


Page 16 of 18

Displaying Existing Customs Documents

UseThis function allows you to display all the customs documents that you have created.

Activities To display an overview of your LOCs, choose SAP Risk Management Letter of Credit Processing Export/Import Monitoring Display Available

Customs Documents . You may also want to restrict your search to one particular legal regulation, for example. The system displays a results list with the following detailed information:

Header data Document number Logical system Technical object type Year Document type (import/export, sales, purchase order) Administrative information

Item data Item number Product number Net value Currency Quantity Unit of measure Item category

When you choose a document or item from the results list and click Display Customs Document , the system displays the relevant customs document.

This is a display-only function and you cannot make changes to the customs document. You can, however, use the following standard functions toadd and delete attached documents:

Display Log for Document Check Add Document Display Document Delete Document

When you select a document or item from the results list and choose ( Log ), the system displays the log for all the checks it performed on the item oritems in the customs document. These checks include the checks from services for which you have activated legal regulations, for example, embargochecks, license checks and letter of credit checks. The system displays the results of the service checks at item level.

Display Existing Export Customs Declarations

UseThis function allows you to display existing export customs declarations.

Activities To display existing export customs declarations, choose SAP Risk Management Letter of Credit Processing Export Monitoring Customs

Documents/Customs Declarations Display Existing Export Customs Declarations . You can enter some of the following data if you want to restrict the results of your search:

Organizational data Data about the SAP Global Trade Services documents Data about the feeder system billing documents

If you want the system to display the document items, select the checkbox Display Items under Display Scope .You can also enter the name of your preferred layout under Output Format Layout .

You can navigate from the results list to display and editing mode. To naviage to the editing mode of a specific export customs declaration, selectthe relevant row in the results list and choose Edit .For more information on how to create and change an export customs declaration, see Entry of a Customs Shipment - Export in SAP Libraryunder SAP Customs Management .


Page 17 of 18

Displaying Blocked Letter of Credit (LOC) Documents

UseThe most common reasons for a customs document being blocked by the system in the Letter of Credit service are the following:

Missing business partner Missing determination information Missing LOC

To enable your staff to react to blocks quickly, you can send an e-mail to notify specific users as soon as a block is set.

Activities When a document in the feeder system is blocked for further processing, you can call up its counterpart, the customs document, in SAP Global Trade

Services ( SAP GTS ) to ascertain the reason why it was blocked. To determine whether the LOC check was the reason for the document block, you cancall the blocked customs document by choosing SAP Risk Management Letter of Credit Processing Export/Import Monitoring CustomsDocuments Display Blocked Customs Documents .

If you want to restrict the results of the search for blocked customs documents, you can enter the following data: SAP GTS customs document data Document data in the feeder system Blocking reasons

Missing business partner Missing determination information Missing LOC

From the results screen that follows, you can see which items in the customs document were blocked and by which checks they were blocked. To display detailed information about the LOC situation for these items in the document, select individual items and then choose Display Log . From the

log, you can see the sequence used for the LOC determination and whether the system was able to find a LOC for the product or not. The LOC determinationis based on the LOC types you created in SAP Risk Management - Letter of Credit , which are based on attributes you assigned to your LOC types.

To resolve the problem of a customs document having been blocked by the system due to LOC problems, you can create a LOC in the system if yourcompany has been issued with one from the bank or exporter. To do this, you choose SAP Risk Management Letter of Credit Processing Master Data Letters of Credit Maintain Letter of Credit. If you want to create a new LOC in the system, you enter the necessary data in the initial screen and thencontinue to maintain the LOC as described in Maintaining Letters of Credit.

You can also change the LOC that was assigned to the blocked customs document by choosing Change Legal Control Data . For more information aboutmanually changing the assignment of the LOC to the blocked customs document, see Assigning a Letter of Credit Manually.

Display Assigned Letter of Credit Documents

UseThis function allows you to display documents to which a letter of credit (LOC) has already been assigned in SAP Risk Management Letter of Credit .

Activities To display the customs documents to which LOCs are already assigned, choose SAP Risk Management Letter of Credit Processing Import/Export

Monitoring Customs Documents Display Assigned Letter of Credit Documents . You can then enter the following data to restrict the results of the search:

License (letter of credit data) Customs document Feeder system document

From the results list you can see which LOCs have been assigned to which customs documents. From the results list you can do the following, for example: Display legal control data (letter of credit data in display-only mode) Display the customs documents Display the log


Page 18 of 18