Keeping up to date with tariff changes

In our new global trade reality, keeping track of tariff changes can seem an insurmountable task. Trade policies are changing more rapidly than ever before and being enforced at a moment’s notice; requiring flexibility and adaptability from companies to implement new tariffs to ensure that they are not penalised for underpaying duties.

If continuously monitoring customs authorities’ official communication channels is the most straight forward option, it comes with great resource constraint. And a certain dose of expertise to determine which change applies to the organization, in what context, etc.

Another option is engaging with a licensed customs broker. These experts would be able to provide the level of monitoring and guidance mentioned above, on behalf of the organization.

But there is a third option for companies wishing to do it themselves and leverage these uncertain times to gain a competitive advantage by reacting faster and more precisely: aligning best-in-class content with best-in-class technology from SAP Global Trade Services to get information in real time and directly connected to the core processes and supply chain.

How can companies get the latest duty rates?

As per leading analyst firm Gartner, there are two types of global trade management software providers: those that do and those that do not provide content with their tools.

On this matter, SAP has strategically decided to work with its ecosystem of professional global trade data partners offering subscription-based access to a wide selection of trade content. Content from dedicated teams that specialize in identifying, interpreting, and collecting changes and updates to trade regulations that can be imported into SAP through standardized interfaces, but, more importantly, content that can be tailored to each customer’s specific needs in terms of geographic coverage (regions and countries to monitor), content types, and process areas.

This provides organizations with the freedom to select a global trade data partner covering their specific requirements or even combine content from various providers.

As a result, the global trade data partner acts as a central source for up-to-date information helping companies navigate evolving trade regulations. Information provided includes, but is not limited to, customs tariff measures and duty rates, export control lists, rules for preferential origin determination for free trade agreements, and more.

Companies such as Mendel Verlag started decades ago with production and publication of customs tariffs and other publications and have expanded to electronic formats that can be directly consumed by global trade management platforms such as SAP Global Trade Services.

To produce this foreign trade content, Mendel Verlag follows a 5-step approach—all done internally by a team of specialists:

1. Research for the identification and review of relevant sources
2. Compile information from step 1
3. Evaluate for relevance and validity
4. Consolidate different information and sources for integrated data
5. Quality control including classic editing but also manual checks of electronically processed data

This last step is crucial, as only with expert review can the content provider ensure the credibility and reliability of the trade compliance master data information. As highlighted by Mendel Verlag: “Quality is a key requirement of our work. Only valid data can be used effectively in foreign trade and customs processes.”

Once subscribed to a data content service, customers will receive continuous updates.

To ensure that the trade compliance information in SAP Global Trade Services is in sync and therefore also continuously up to date, the procedure is quite simple. The updated file from the content provider—usually in an XML format, is placed in a secure file transfer protocol (SFTP) folder where it is picked up by SAP Global Trade Services,  and values are uploaded into the platform.  This process includes control parameter checks, and errors can be manually reviewed.

If a company decides to change data providers and therefore needs to replace the previous data provider's content with the new data provider's content, SAP Global Trade Services can of course enable the configuration of time-dependency of this content. This flexibility enables customers to enter two competing sets of content in the system, and when they activate the new data provider's content, the old data provider's content—and all dependent items, is deactivated automatically.

Typical misconceptions

We, at SAP, strongly believe that working hand-in-hand with a global trade data partner provider is in the best interest of our customers to be able to freely choose, change or combine content from various content providers, addressing specific countries or regions, content types and process areas.

This can raise a few questions and misconceptions:

As eloquently stated by Christian Stadler, Chief Product Owner for SAP International Trade Management portfolio: “Working with content partners such as Mendel Verlag makes our SAP solutions even more relevant, and constantly adapted to rapidly changing situations”.

If you are interested in discovering more about SAP Global Trade Services, see our dedicated website and associated resources: videos, customer stories, and more.

I would like to thank Mendel Verlag for their collaboration on this article.