Product Classification for Exports

and Imports: How SAP GTS Meets

Industry Challenges

Applies to:
SAP GRC GTS 7.2. For more information, visit the Governance, Risk, and Compliance homepage. .

Summary
This document highlights the need for Product Classification as it relates to Export and Imports filing, current
challenges faced by business units, the functionality offered by SAP ECC and limitations of SAP ECC. Next it
discusses the benefits of SAP GTS. As an example, the procedure to maintain HTS Codes (Harmonized
Tariff Schedule Codes) for US is explained in detail. Finally, some of the limitations of SAP GTS and ways to
deal with those are also discussed.

Author: Akhilesh K Sinha

Company: Intelligroup Inc.
Created on: 5 August 2009

Author Bio
With over 14 years of industry experience, Mr. Sinha currently focuses on SAP GRC GTS and Foreign
Trade. In the past he has helped organizations meet the challenges in Logistics and Legal Compliance
areas. Academically he holds a Bachelors degree in Mechanical Engineering and MBA in Finance and
Marketing. He can be contacted at [email protected].

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 Product Classification for Exports and Imports: How SAP GTS Meets Industry Challenges

Table of Contents
Business Background – Why Product Classification? ........................................................................................ 3 
Limitations of SAP ECC ...................................................................................................................................... 3 
Classification in SAP GTS – How SAP GTS can help? ..................................................................................... 4 
Pre-requisites for classification in SAP GTS ...................................................................................................... 7 
Step by step Procedure to maintain HTS Codes for US in SAP GTS. ............................................................... 7 
Limitations ......................................................................................................................................................... 12 
Related Content ................................................................................................................................................ 13 
Disclaimer and Liability Notice .......................................................................................................................... 14 

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 Product Classification for Exports and Imports: How SAP GTS Meets Industry Challenges

Business Background – Why Product Classification?

Product classification (with Harmonized Tariff Schedule or HTS Codes, Schedule B numbers, Other
Government Agency or OGA Codes, Food and Drug Administration or FDA Codes) is the foundation that
supports export/import filing, documentation and preference duty claims. Missing or incorrect product
classification often results into delays at customs, penalties for incorrect filing and loss of preference duty
rates.
Exports from US must report the associated Schedule B numbers. Imports to US must report the HTS Codes
and associated OGA and FDA Code, as appropriate. Classification dictates the duty rates as well as the
documentation requirements when the product crosses border.

Limitations of SAP ECC

Broadly speaking, classification involves the following 2 steps:
a. Identify the right HTS Code (Or Schedule B Number)
b. Assign the code to the material in the ERP application
To identify the right HTS Code, one could visit sites of data provider (e.g. CustomsInfo) or www.Export.gov
or contact US Customs for advance ruling. This is a manual step.
Assuming that one uses SAP ECC as the ERP application, assigning the codes to products has its own
challenges, like:
a. SAP ECC has only 1 field in the material master called “Commodity Code/Import Code Number for
Foreign Trade” (MARC-STAWN). Since there is only 1 field, you cannot assign both the HTS Code
and the Schedule B number to the same product.
b. The field is at Plant level. Hence you need to maintain it multiple times, if you have multiple plants in
the same country – once for each plant in the material master.
c. If you are exporting goods from US to MX, you need to specify the Mexican HTS Code on the export
documentation. This requires that you convert the HTS code for US to the corresponding HTS Code
for MX. This can be achieved by maintaining the cross-reference in the table T604U. (Configuration
path shown below). The limitation of this approach is that there is a 1:1 correspondence of export
and import codes. There are cases where a US HTS code maps to multiple MX HTS codes.

Note: Mapping Export Code Numbers to Import Code Numbers.

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 Product Classification for Exports and Imports: How SAP GTS Meets Industry Challenges

Classification in SAP GTS – How SAP GTS can help?

SAP GTS helps in both the above mentioned steps. It allows maintaining the complete set of HTS Codes,
Schedule B numbers onto GTS. Users can then use this repository to search for the right code.

Note: Sample HTS Codes as maintained in SAP GRC GTS.

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 Product Classification for Exports and Imports: How SAP GTS Meets Industry Challenges

Classification Help in SAP GRC GTS

During product classification, it allows searching for the right HTS codes:

Note: Searching HTS Codes in SAP GRC GTS.

Based on the search text for Sunflower Oil, it brings up several codes to choose from:

Note: Search results for ‘Sunflower Oil’.

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In addition, it allows maintaining comments while classifying the products:

Note: Adding comments while classifying a product in SAP GRC GTS.

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 Product Classification for Exports and Imports: How SAP GTS Meets Industry Challenges

Pre-requisites for classification in SAP GTS

SAP GTS must be configured properly to allow loading of the HTS Codes (you would need to buy the HTS
codes from data providers like CustomsInfo).
This document elaborates the configuration and related necessary steps in order to be able to load the xml
files for HTS Codes for US from the data provider.
The procedure to load the HTS Codes file for MX and CA would be similar. So would be the procedure to
load xml files for Schedule B codes for US.

Step by step Procedure to maintain HTS Codes for US in SAP GTS.

As an example, the steps below describe limited configuration steps related to setting up Product
Classification for HTS Codes for US. For a more comprehensive list, please refer to the SAP GTS
configuration guides.
a. Define Unit of Measurement System
In SAP GTS, go to IMG Æ SAP Global Trade Services Æ General Settings Æ Numbering Schemes Æ
Define Unit of Measurement System

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b. Define Numbering Scheme for OGA Codes

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c. Define Numbering Scheme for Tariff Code Numbers

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 Product Classification for Exports and Imports: How SAP GTS Meets Industry Challenges

d. Assign Numbering Scheme of Tariff Code Numbers for Customs Processing

Once the configuration steps are complete, the following transaction steps need to take place:
a. Maintain OGA Codes. Use transaction code /SAPSLL/LLNS_104.
b. Load HTS Codes from an xml file received from the data provider. Use transaction code:
/SAPSLL/LLNS_UPL101.
c. Classify Products via Worklist. Use transaction code: /SAPSLL/PR_CLWB_101.

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Limitations
Some of the limitations that may apply to you:
a. While you can mass upload FDA codes to SAP GTS, there is no standard transaction to do mass
assignment of FDA codes to products. You may need to do develop a custom transaction to do this.
b. If you want to segregate responsibility for product classification based on say material type or
material group, you do not have this functionality in standard SAP GTS. This can be achieved by
transferring the Material Type attribute from the material master in ECC to GTS.

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Related Content
For more details please refer to the configuration guide of SAP GRC GTS along with the online help
documentation at help.sap.com.
For more information, visit the Governance, Risk, and Compliance homepage.
For more information, visit the Business Process Expert homepage.

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 Product Classification for Exports and Imports: How SAP GTS Meets Industry Challenges

Disclaimer and Liability Notice

This document may discuss sample coding or other information that does not include SAP official interfaces and therefore is not
supported by SAP. Changes made based on this information are not supported and can be overwritten during an upgrade.
SAP will not be held liable for any damages caused by using or misusing the information, code or methods suggested in this document,
and anyone using these methods does so at his/her own risk.
SAP offers no guarantees and assumes no responsibility or liability of any type with respect to the content of this technical article or
code sample, including any liability resulting from incompatibility between the content within this document and the materials and
services offered by SAP. You agree that you will not hold, or seek to hold, SAP responsible or liable with respect to the content of this
document.

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