Is your SAP ERP ready for Union Customs Code regulations? (Part 1)

New in: Click to read Björn's latest update from April 2018 on the recommended approach for Union Customs Code compliance and what steps the Oil and Gas industry needs to take before 2019.

Moving goods across EU borders

Shipping delays, long lead times and customs clearance procedures pose many challenges for material requirements planning, but now the HMRC’s implementation of Union Customs Code (UCC) regulations could add further delays during the import and export of goods across EU borders.

Non-conformance with UCC regulations has much wider implications for asset reliability and performance:

    • Delays in shipping can affect material availability, which in turn, effects essential maintenance     
    • An increase in import/export duty can effect product margins and operational costs

Is your organisation currently importing or exporting goods throughout the EU?

If the answer is yes, read our blog to learn how Absoft can optimise your SAP® ERP system to comply with the new UCC regulations, effective from 1st May 2016.

So, what’s changed?  

Union Custom Code regulations bring changes to import, export and storage procedures for goods which cross EU borders. This blog highlights some, but not all of these changes, with particular emphasis on how to record crucial import and export data in SAP.

Entry in Declarant Records (EIDR)

Do you currently use Local Clearance Procedure (LCP)?

Entry in Declarant Records (EIDR) will supersede LCP as the simplified customs procedure which provides customs clearance from an organisations’ premises (or approved location). Therefore as the importer/exporter you will have to apply for the new procedure EIDR. EIDR which will allow your organisation to continue using the simplified customs clearance procedure with the initial declaration at point of release and the supplementary declaration once a month.

Authorised Economic Operator (AEO)

Is your organisation AEO accredited?

Union Custom Code regulations will encourage more organisations to achieve Authorised Economic Operator (AEO) accreditation. Issued by the HMRC, AEO is an accreditation which expedites and exemplifies certain custom procedures for organisations that are awarded the status.

For example, it waives the necessity for the initial declaration and presentation of goods at the point of release. Organisations which are AEO accredited have already met stringent customs criteria and are therefore provided with priority clearance of goods, or are exempt from processes (such as providing financial guarantees or security for inward processing or customs warehousing). The accreditation also permits organisations to make their own 'self-assessment' by completing procedures and formalities often controlled by customs.

There are a few caveats to consider before applying for AEO status. For instance, accreditation is required per legal entity and one authorised person must be appointed to submit data declarations electronically. 

Learn more about AEO here.

Temporary Storage

Have you applied for temporary storage?

Changes will effect temporary storage in relation to storage time and the movement of goods between locations. Temporary storage (quayside, for example) can be used for a maximum of 90 days and a temporary storage declaration must be provided using documentation from either inventory records, manifests or commercial records.


Can your organisation provide full historical information, detailing when stock items were imported and exported during its complete lifecycle? We’ll talk about how we’ve helped customers to classify stock items by import status, including a robust track and trace process, later in this blog.

Trace duty-suspended materials from import to export in SAP

With a track record spanning over 25 years, SAP consultancy Absoft has delivered process optimisation solutions which support organisations to adhere to regulatory frameworks. 

In light of imminent UCC regulations, Absoft recently helped to optimise SAP processes for a customer who wanted to get ahead of the game.   

The project compromised of the following stages:

    • Review and classify all stock materials, in accordance with their import status (as duty paid or duty suspended)
    • Reference all stock with the appropriate attributes: import license number, date, customs status (free circulating goods, inward process relief, shipwork end use)
    • Review the typical material flow between a warehouse and shop floor, from goods receipt through to shipping
    • Close any gaps so all material flow movements to and from the warehouse (purchase to receipt, staging of components for production, receipt and shipping of the assembly) interlink with the organisation’s customs department.
    • Build a robust process which allows for the track and trace of all goods, from import to export
    • Build an import to export trace report which provides a clear overview of duty suspended materials, including where items were shipped

As a result of the project, the organisation can now effectively use SAP to track purchase order imports, tie them to relevant import documentation, trace items to export and provide powerful reports which satisfy the new requirements introduced by the customs authorities.  

What else does my organisation need to consider?

Organisations will become under tightening scrutiny from the HMRC and customs authorities. For that reason, it will be necessary to prove that a comprehensive data trail exists, which demonstrates material tracking throughout the supply chain, from import to export. As a final note, here are some further points to consider before the UCC comes into effect from 1st May 2016:

    • Review all materials in stock and classify them with commodity codes
    • Provide a report for monthly supplementary declarations which detail all inbound and outbound shipments within the last month, including all relevant customs import/export information
    • Apply for temporary storage at quayside for turnaround of ROB containers (containers remaining on board)
    • Consider applying for AEO accreditation which will waive or simplify certain customs procedures (such as the initial data declaration)
    • Ensure that all your contractors involved in the mobilisation of materials follow EIDR guidelines or apply for AEO accreditation 

We hope this blog has helped provide insight into the fast approaching Union Custom Code regulations. There is a lot to cover, and we’ve only scratched the surface, but for more information about the topics covered in our blog, contact our team of SAP consultants via the button below.

by Björn Harzer, Solution Architect

Read our blog on how achieving Authorised Economic Operator (AEO) certification can allow for customs exemptions, or expedite processes under imminent UCC regulations, here.   

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