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SAP BusinessObjects Global Trade Services 8.0
Master Data & Classification
Classification of Product Master Data
This presentation explains why to classify product master data, and how to use
classification features in SAP BusinessObjects Global Trade Services 8.0 to facilitate
the process.
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© SAP 2009 / Page 2
Master Data and Classification: Classification
of Product Master Data
Unit: Master Data and Classification
Lesson 1: Master Data Delta
Lesson 2: Classification of Product Master Data
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© SAP 2009 / Page 3
Lesson Objectives
After completing this presentation, you will be able to: Describe the purpose and advantages of product classification
Describe classification schemes and how they relate to each other
Define the Harmonized System of tariff nomenclature
Identify the determining factors in selecting a classification scheme
Describe how to use reference numbering schemes
Define Automatic Classification and Mass Classification
Classify products using Automatic Classification and using a worklist
The presentation is intended to give you an introduction to classification and
classification schemes, and to show how to set up some of the classification features in
the application.
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1. Reason for Product Master Data Classification
2. Different classification schemes and their usage
3. Automatic Classification
4. Mass Classification (classification of products via worklist)
Topics
This topics focuses on what classification is, and the benefits of implementing product
master data classification.
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Introduction
What does the term Classification mean?
Classification is a process used for assigning a code to your product for identificationpurposes
A classification code is a structured number of a specific length prescribed by International or
National law and Agreements
Classification is used for different purposes:
Customs tariffs
Collection of international trade statistics
Rules of origin
Collection of internal taxes Trade negotiations
Transport tariffs and statistics
Monitoring of controlled goods
Why is it so important to classify products?
If you intend to move goods to a foreign country or Customs union, such as EU or
NAFTA, it is essential that the goods are classified in order to:
Identify what duties and controls apply
Ensure a correct Customs declaration
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Advantages of Product Classification
What are the advantages of correct product classification?
Avoid paying interest on back-payments for incorrect classification Avoid seizure of your goods or delays in their movement
Pay the correct amount of duty and VAT
Know if duty is suspended on any of your goods
Know if any preferential duty rates can be applied
Know whether you need to obtain an import or export license
Know whether excise or anti-dumping duties apply
There are many advantages to correctly classifying products, some of which are shown
here. In general, the right classifications prevent:
Delays in clearing goods
Overpayment of duty
Possible penalties
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Knowledge Check
What are the major issues
that classifying your products can prevent?
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Knowledge Check
The correct classification of your products can prevent
delays in clearing goods,
overpayment of duty, and
possible penalties for misclassification.
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1. Reason for Product Master Data Classification
2. Different classification schemes and their usage
3. Automatic Classification
4. Mass Classification (classification of products via worklist)
Topics
This topic describes what classification schemes are, how they are related to each
other, and how to select a classification scheme.
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Defining Classification Schemes
What are classification schemes?
The specific format of classification code used is referred to as a classification or numberingscheme
Classification schemes are used to standardize the classification process
They are the specific categories of codes, with the associated meanings for each component
of the code, defined by organizations to classify products for international trading
Classification schemes define the format of the classification code, based on the
Customs requirements of specific countries and unions.
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Business Example
Laser optical drive unit assembly (so called mecha units) for the recording and/or
reproduction of digital video and/or audio signals; comprising at least a laser optical
reading and/or writing unit, one or more DC motors, and not containing a printed
circuit board or containing a printed circuit board not capable of signal processing for
sounds and images; for use in the manufacture of products falling within headings No
8519, 8520, 8521, 8526, 8527, 8528 or 8543
Suppose you are the producer of electronic accessories within
EU. One of the products you assemble is a CD Drive. Because
you export this product out of EU, it has to have a correct
TARIC code assigned (TARIC is an Import Classification
scheme for EU).
Every Classification code has own description which is the key for its correct
assignment to your product:
TARIC Code: 8522908080
In this example, you export this product out of the European Union, so it must have a
correct TARIC code assigned to it. TARIC is an Import Classification Scheme for the
EU.
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Defining the Harmonized System
What is the Harmonized System (HS) of tariff nomenclature?
HS is an internationally standardized system of names and numbers for classifying tradedproducts
It is developed and maintained by the World Customs Organization (WCO), an independent
intergovernmental organization with over 170 member countries.
It is a six-digit nomenclature:
The first two digits are defined as a chapter.
The first four digits (including chapter part) are referred to as the heading.
The first six digits are known as a subheading (including header part).
8
SubheadingHeading
Chapter
5 2 2 9 0
Countries that have adopted the Harmonized System are not permitted to alter it in any
way. However, individual countries may extend a Harmonized System number to eight
or ten digits for customs and export purposes. More than 200 countries, customs and
economic unions, representing more than 98% of world trade, use the HS as a basis for
their own Classification schemes.
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Relations and Inheritance of Classification
Schemes
Classification schemes are often based on each other. In this example, the schemes
with that are of equal length or longer include the code of schemes that are shorter.
Harmonized System (6)*
Combined nomenclature (8) USITC (10) Schedule B (8)
EU TARIC (10) DE EZT (11)
* The number in the brackets shows the number of digit of the Classification scheme
Classification schemes tend to build on each other, using a reference scheme and then
extending it to add information required for specific trading requirements.
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Specific Codes
What is a tariff code?
A tariff code is a product-specific code asdocumented in the HS
They exist for almost every product involved
in global commerce
They are required on official shipping
documents for tax assessment purposes
A complete tariff code is no less than six
digits and usually no more than twelve digits
An example is the EU TARIC scheme used
by European Union.
What is a commodity code?
A commodity code identifies a commodity bya certain number to determine its commodity
rate for transport.
They are used mostly for statistical
purposes.
These codes are usually shorter than tariff
codes and can meet in very first 6 digits ( if
HS is used )
Examples are US Scheduled B and EUSTA
in European Union
845634920845634920000
A tariff code is a product-specific code as documented in the Harmonized System (HS)
maintained by the World Customs Organization (WCO.) Tariff codes exist for almost
every product involved in global commerce. Required on official shipping documents for
tax assessment purposes, a tariff code ensures uniformity of product classification
worldwide.
A complete tariff code is no less than six digits and are usually no more than twelve
digits. The more digits in a tariff code string, the more specific the product it identifies. A
string of less than six digits is considered a partial tariff code and represents a broad
product category or chapter of products in the HS. The example of Tariff code is EUTARIC scheme used by European Union.
A commodity code is a number used to determine its commodity rate for transport.
Commodity codes are used mostly for statistical purposes. These codes are usually
lower length then Tariff codes and can meet in very first 6 digits ( if HS is used ). The
examples of Commodity code are US Scheduled B and EUSTA in European Union.
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Knowledge Check
What are the three
sections of codes that
make up the Harmonized
System of tariff nomenclature?
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Knowledge Check
The first two digits arecalled the chapter, the first
four digits are called the
heading, and the first six
digits are called thesubheading.
The number can be
extended by individualcountries, if required.
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Business Example
IDES AG, an enterprise headquartered in Frankfurt,
Germany, manufactures outrigger construction cranes andexports them to Switzerland and Israel.
Whereas this company maintains several products, they have
to be classified properly.
How do you choose a classification scheme for this example?
Check the definition of relevant Legal regulation of the country or Customs union
Germany belongs to European Union ( EU )
There is the legal regulation ATLAS Customs Processing System which uses EZT Tariff code scheme based on EU_TARIC scheme
Check the official webpage for the country
German official webpage for Customs processing:
http://www.zoll.de/english_version/index.html
The classification scheme you should apply is always defined by law (so called Legal
regulation) of country or Customs union. This means you have to check the definition of
relevant Legal regulation for Classification scheme which is to be used.
As far as Germany belongs to European Union ( EU ), there is the legal regulation
ATLAS Customs Processing System which uses EZT Tariff code scheme based on
EU_TARIC scheme.
Countries usually have an official webpage which you can use to determine which
Classification scheme to apply. This is the link to German official webpage for Customs
processing: http://www.zoll.de/english_version/index.html
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© SAP 2009 / Page 18
Defining a Reference Numbering Scheme
Once you have selected a classification scheme, define it for your transactions:
In SAP BusinessObjects Global Trade Services 8.0, you can define a new numbering schemewith reference to an existing one
The existing numbering scheme you refer to is called a reference numbering scheme
The length of the Reference numbering scheme must be upper or equal as the length of
numbering scheme which is referring to it
Example:
EUSTA – European Commodity code numbering scheme is derived from ( refers to )
DEEZT, German Tariff Code numbering scheme. You can set certain Numbering
Scheme as a reference one by filling Field called Reference scheme.
You can specify the reference numbering scheme in SAP BusinessObjects Global
Trade Services 8.0. This reference scheme is used to simplify the process of assigning
related schemes to your products. This is always the scheme with a code that is of
greater or equal length than the other codes.
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Transaction: Defining Numbering Schemes
Where to define numbering schemes in SAP BusinessObjects Global Trade Services
8.0: Execute transaction SPRO in SAP GTS system
Follow the path:
Display IMG > SAP Global Trade Services > General Settings > Numbering
Schemes > Define Numbering Scheme for Commodity Codes or Define
Numbering Scheme for Tariff Code Numbers
You can also define the numbering schemes you want to use for your commodity and
tariff codes.
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Knowledge Check
What are the two
resources you must check
to determine which
classification system to usefor a specific country or
Customs union?
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Knowledge Check
Check the Legal regulationfor the country or Customs
union, and check the
official web page for thecountry.
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1. Reason for Product Master Data Classification
2. Different classification schemes and their usage
3. Automatic Classification
4. Mass Classification (classification of products via worklist)
Topics
This topic describes the Automatic Classification feature in SAP BusinessObjects
Global Trade Services 8.0 and demonstrates how to set it up.
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Automatic Classification
What does the term Automatic Classification mean?
Automatic Classification is the feature provided by SAP BusinessObjects Global TradeServices 8.0 that allows you to classify certain products in more classification schemes at
once.
This feature is only available for classification schemes which refer to another one, so called
Reference Classification scheme
Automatic Classification uses the reference numbering scheme to extend classification
codes.
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Automatic Classification: Business Example
IDES AG, an enterprise headquartered in Frankfurt, Germany,
manufactures outrigger construction cranes and exports them toSwitzerland and Israel.
Whereas this company maintains several products, they have to be
classified properly.
One of this product is the Chassis for crane. The number of the product in our GTS
system is GTS-14006.
Follow this path on next slide to reach the transaction for Classification Product Master
Data from the Operative cockpit of SAP GTS 8.0.
In this example, you can automatically change the classification for a group of products.
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Automatic Classification
Execute :
1.Enter Transaction /n/sapsll/menu_legal.
2.Select Master Data in the SAP Customs Management section.3.Click New Document for Maintain Products in the Customs Products section.
To automatically classify products:
Enter Transaction /n/sapsll/menu_legal.
Select Master Data in the SAP Customs Management section.
Click Change product for Maintain Products in the Customs Products section.
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Automatic Classification
Execute :
4.Enter Logical System Group for the feeder and the Product Number., and then click Execute.
5.Click the Classification tab.
Enter Logical System Group for the feeder and the Product Number, and then click
Execute.
Click the Classification tab.
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Automatic Classification
Execute:
6. Enter the tariff number and press Enter.
Enter the tariff number and press Enter.
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Automatic Classification
If the validity interval does not correspond with the
validity defined for the scheme, a warning message
pops up. Accept or reject the proposed changes asrequired.
This dialog box may appear, depending on the scheme selected.
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Automatic Classification
The Selection of Derived Tariff Numbers dialog box displays, which
enables you to select from a list of Classification schemes that
reference the original scheme. For example, EZZT is the referencescheme for DEALN.
This dialog box provides a list of related schemes.
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Automatic Classification
Execute:
7.Click Adopt Values.
Click Adopt Values.
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Automatic Classification
The classification number of the reference numbering schemeis adopted by the referencing scheme with shorter
classification number. For example, 84262000000 (scheme
DEEZT) >>> 842620000 (scheme DEALN).
Note the changes.
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Knowledge Check
What is AutomaticClassification?
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Knowledge Check
Automatic classification isthe process of extending a
numbering scheme by
referencing another relatednumbering scheme.
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© SAP 2009 / Page 34
1. Reason for Product Master Data Classification
2. Different classification schemes and their usage
3. Automatic Classification
4. Mass Classification (classification of products via worklist)
Topics
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© SAP 2009 / Page 35
Mass Classification
What does the term Mass Classification mean?
Mass Classification is the feature provided by SAP BusinessObjects Global Trade Services8.0 that allows you to classify classify more than one products under certain Legal regulation
at the same time
This feature is available for any product in the worklist
Mass Classification enables to you selectively apply a scheme to multiple products.
For example, if your enterprise imports or exports chocolate bars and you need to
classify a new brand of chocolate, you can classify 20 different types of chocolate at
once. This saves your time, since they all have the same commodity code or tariff code
number.
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Classification of Products via Worklist
Execute :
1. Enter Transaction /n/sapsll/menu_legal.
2. Select Classification in the SAP Customs Management section.3. Select Classify Products via Worklist for Tariff codes or Classsify Products via Worklist for
Commodity codes.
To classify products via a worklist:
Enter Transaction /n/sapsll/menu_legal.
Select Classification in the SAP Customs Management section.
Select Classification of Products via Worklist for Tariff codes or Classification of
Products via Worklist for Commodity codes.
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Classification of Products via Worklist
Execute :
4. Select the appropriate values for the Import/Export and Legal Regulation fields.
5. Select the Transfer Duty Tariff Numbers check box to activate Automatic Classification.6. Specify the range of products you want to select, and then click the Execute icon.
Select the appropriate values for Import/Export and Legal Regulation.
Select the Transfer Duty Tariff Numbers check box to activate Automatic Classification.
Specify the range of products you want to select, and then click Execute.
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Classification of Products via Worklist
Execute :
7. Select the set of Products you want to classify.
8. Click the Classify Multiple Products icon.
Select the set of Products you want to classify. You can use the Ctrl key to select more
non-adjacent products.
Click Classify Multiple Products.
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Classification of Products via Worklist
Execute :
9. Enter the Tariff Number you want to use.
10. Click the Start Mass Classification icon.
Enter the Tariff Number you want to use.
Click Start Mass Classification.
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Classification of Products via Worklist
Execute:
11. Click the Adopt Values icon.
The Selection of Derived Tariff Numbers dialog box display the referencing schemes.
Click Adopt Values.
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Knowledge Check
How can you apply the
same classification tomultiple products?
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Knowledge Check
You can select productsfrom the Worklist (use the
Ctrl key to select non-
adjacent items), and apply
the selected value to all of them at the same time.
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Benefits
What are the benefits of using the Automatic and Mass Classification features?
Reducing time spent classifying similar products Avoiding mistakes that might occur by manual classification
Take advantage of the relationships between schemes
Use one or both features based on the requirements of specific types of products
The Automatic and Mass Classification features reduce the amount of time required to
accurately classify your products.
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Reminders
Keep in mind:
If you want to use Automatic Classification to classify one or more products, you have toensure that there are relevant schemes defined as Reference numbering schemes in the
system
Reference numbering scheme has to always have structure length longer or equal to scheme
to which it refers
When using Mass Classification, do not forget to select the Duty Tariff Numbers check box toactivate Automatic Classification option if necessary
Keep in mind that there are specific pre-requisites for using the Automatic and Mass
Classification features.
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Product Master Classification
Lesson Summary
You should now be able to:
Describe the purpose and advantages of product classification
Describe classification schemes and how they relate to each other
Define the Harmonized System of tariff nomenclature
Identify the determining factors in selecting a classification scheme
Describe how to use reference numbering schemes
Define Automatic Classification and Mass Classification
Classify products using Automatic Classification and using a worklist
The demo will now show Automatic Classification of Product Master Data
The product number is GTS-14006, which is Cassis for crane. Assign the
Commodity code DEEZT 84262000000 relevant for ATLAS Legal Regulation to
this product. Because the DEEZT Classification scheme is the Reference
numbering scheme for EUSTA, the system classifies the product for the
EUSTA scheme automatically.
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© SAP 2009 / Page 46
Copyright 2009 SAP AG
All Rights Reserved
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