FTO in US and LU in foreign country - Compliance Management for export

[former_member698128]

Hi Friends,

I am seeking a solution to the following business scenario.

The company is in US FTO-US with a domestic plant LU-NC. We have warehouses in overseas countries like Singapore (LU-SG) and Germany (LU-DE) which are managed by 3rd party logistics as Bonded Warehouse.

We transfer goods to LU-SG and LU-DE using STO.

LU-NC,LU-DE,LU-SG are assigned to same company code FTO-US.

For selling to customers in SG and DE we are creating sales orders from plants(warehouse) LU-SG and LU-DE.

How can we configure the Compliance management in GTS (SPL, Legal control, Embargo) so that when the goods are released from the Bonded warehouse as part of the Sales Order/Delivery process, the country of departure, country of legal regulation is adopted as US.

[dean_hinson2]

Hello Saumendu,

Please check with your ECO (Export Control Officer). When product moves from the Bonded Warehouses, there are US Re-Export and Local Country Export regulations that must be followed.

Regards, Dean.

[former_member698128]

Hi Dean,

Thanks for responding.

When we export to the Bonded Warehouse in DE and SG, we do not have visibility to the end customer. But when goods are released to the end customer in DE and SG, we have to ensure that the end customer has met the License requirements as mandated by US Exports control and passes the SPL check. The embargo check to DE, SG was achieved in the STO PO.

I have assigned the DE and SG Plants to US Plant LU. This is mimicking the domestic sales orders from DE and SG plants as export orders from US and helping me to fulfill the export requirements from US (SPL,Legal Control). I still have to figure out the import/reporting requirements for DE/SG.

Regards, Saumendu

[dean_hinson2]

If the Bonded Warehouse resides in DE and SG, it has to comply to the regulations put forth by those countries. It's like saying that the US FTZ can be attached to a Non-US FTO and run under the Non-US Legal Regulations. It doesn't work that way.

In your scenario, you actually export from the US to these Bonded Warehouses. I, personally. would not use STO. The company code assigned to the DE and SG plants must (should) be different due to align with each countries tax, labor, etc. rules. So, it my mind, it is a sell/buy. US selling, DE/SG buying. When the product leaves the Bonded Warehouse to another country, you are right it was never imported in to the commerce of DE/SG but I can tell you that there are reporting requirements that must be made. When the product is shipped domestically in DE/SG, then it becomes an import topic.

Sometimes, business requirements conflict with foreign trade compliance. Foreign Trade Compliance must be upheld or when your caught, you can be fined and/or lose export (or Bonded Warehouse) priviledges.

[former_member698128]

Hi Dean,

Thanks for responding. Since the goods in the Bonded Warehouse is technically not imported into SG or DE, would a sales order to release goods from the Bonded Warehouse be equivalent to goods being exported from US to SG/DE and follow the same Compliance rules for Embargo, SPL and Legal Control abiding by US License requirements. What solution would you suggest ?

Regards, Saumendu

[dean_hinson2]

Hello,

WHY? The legal regulations for SG and DE are quite different from US. Just because you linked the foreign LUs to a 'US' FTO doesn't mean that the legal regulations controlling the foreign LUs must be the same as US.

Regards, Dean.