Global Trade Compliance

GTC for Export Compliance

The Global Trade Compliance functionality can be used to check if specific items can be exported to a specific country or 'from or to' a specific business partner.

This functionality is used to:

  • Execute internal, or external checks, or both. The internal checks are executed in LN and the external checks are executed using an external application.
  • Create and maintain export licenses. This information is used during the internal compliance check.

GTC for Import Compliance

The Global Trade Compliance functionality is used for import scenarios. The proposed solution covers global trade compliance for business partners, based on the import documents such as; purchase orders, warehouse receipts, or Advanced Shipment Notices.

The import scenario is considered, when the ship-from country is different from the ship-to country, specified for the Receipt Line in Warehousing.

For the external check, export and import compliance data is specified for each item. This data can be sent to an external application and used as input for the compliance check. If the check fails, the export or import of goods is blocked. However, an authorized user can override the compliance check failures for documents and the export or import block can be overruled.

GTC enhancements

  • For items that are identified as GTC controlled, new parameters have been introduced to include GTC checks of domestic sales and purchase.
  • The license has been enhanced to include the effectivity unit of an item (if applicable).
  • The License Code domain has been extended from 20 characters to 50 characters to handle requirements from different countries.

Subject to trade compliance

For items that are subject to trade compliance, compliance checks can be executed. This could be done for external facing documents, except for Service documents.

In LN CE, trade compliance checks can now be executed for these Service documents during entry:
  • Field Service Order Material lines
  • Maintenance Sales Orders (all variations)
  • Work Order Material Lines
  • Work Order Subassembly (outgoing and incoming)
  • Customer Claim Delivery Lines
  • Supplier Claim Receipt Lines

For these new documents, the same checks are executed as for other documents. If a subject to trade item on one of these documents fails a compliance check, the record is blocked and the Blocked check box is selected. Simultaneously, a record with the Blocking Reason set to Trade Compliance is logged in the Blocking Reasons (tsmdm1101m000) session.

A new Critical for Activity Release check box has been added to the Resource Requirements (tsacm2120m000) session. This check box identifies if the related activity can be released if the item fails the compliance check. The setting of this check box is defaulted to Service Orders and Work Orders. If it is not selected on the reference activity or if reference activities are not used, the check box can be manually selected.

The Subject to Trade Compliance and/or Critical for Activity Release check boxes have been added to these sessions:
  • Service Order Material Costs (tssoc2122m000)
  • Maintenance Sales Order – Part Maintenance (tsmsc1110m100)
  • Maintenance Sales Order – Part Loan (tsmcs1110m200)
  • Maintenance Sales Order – Part Delivery (tsmcs1110m300)
  • Maintenance Sales Order – Part Receipt (tsmcs1110m400)
  • Work Order Material Lines (tswcs4110m000)
  • Work Order Outgoing Subassembly (tswcs4150m000)
  • Work Order Incoming Subassembly (tswcs4151m000)
  • Customer Claim Delivery Line (tscmm1112m000)
  • Supplier Claim Part Receipt Line (tscmm2113m000)

Bank guarantees in Trade Management

Bank Guarantee is a new concept in the Trade Management module of Common. It is similar to the Letters of Credit concept, but it is less restrictive. A Bank Guarantee can be defined as an independent documentary undertaking by which the guarantor (a bank or legally qualified entity), issues, at the request of the customer (instructing party), its irrevocable guarantee to pay a sum of money to the beneficiary (a third party), provided a complying document is presented.

In LN CE, the Bank Guarantee concept can be enabled in the Financial Parameters (tcgtc9199m000) session. The session includes these parameters:
  • Parameters to create Beneficiary and Applicant type bank guarantees and specific trade types for Export, Import, Domestic Outbound and Domestic Inbound.
  • A number group and series for the different trade types of bank guarantees.
  • Reason codes for exceeding the maximum amount of the bank guarantee during linking.

For each trade type and kind of bank guarantee (accessory or independent), bank guarantee master data types must be specified in the Bank Guarantee Types (tcgtc0115m000) session. Additional master data can be specified in the Costs (tcgtc0116m000) and Cost Sets (tcgtc0118m000) sessions, which identify how much a bank guarantee may cost or the fees for obtaining it. The Actions (tcgtc0117m000) session enables you to track the actions assigned to users for the creation and completion of the bank guarantee.

Bank guarantees can be created in the Bank Guarantees-Beneficiary (tcgtc0660m200) and Bank Guarantees-Applicants (tcgtc0660m300) workbenches. User authorization sessions are available to specify approval limits and authorizations for changing the status.

These user authorization sessions are available:
  • User Authorizations for Bank Guarantee - Beneficiary (tcgtc0104m000)
  • User Authorizations for Bank Guarantee - Applicant (tcgtc0104m200)

Depending on the trade type, bank guarantees can be linked to logistics transactions such as Sales Orders, Purchase Orders, and Contract Deliverable Lines. One or multiple bank guarantees can be linked to a logistic transaction.

These features are also applicable for bank guarantees:
  • Statuses are available for the bank guarantee to monitor the process of obtaining the guarantee and ensuring that all participants have the signed version.
  • Amounts are consumed on the bank guarantee when orders are linked and receipts or shipments are confirmed.
  • During linking, compliance checks are executed for the bank guarantee to verify if the amount available for linking is not exceeded (based on an indicator on the bank guarantee).
  • Users can specify if advance or installment amounts can be excluded from the amount to be checked and consumed on the bank guarantee.