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SAP ERP software provides us end-to-end processes such as order-to-cash or procure-to-pay, which are used not only for domestic business partners, but also to import and export goods from and to foreign countries.

To support global and country-specific legal and regulatory requirements, SAP ECC provides the foreign trade component (SD-FT). After realizing that more functions were required for international trade, SAP Global Trade Services (GTS) was launched as a separate product and system.

With the introduction of S/4HANA, SAP provides a new International Trade function within the Governance, Risk and Compliance component. International Trade is in a sense the successor of the foreign trade functions of the ECC. It has been newly implemented and contains more functions than SD-FT but is not as powerful as SAP Global Trade Services (GTS).

International Trade with S/4HANA provides the following functionalities [1]:

  • Classification for International Trade

    • Classification of products with commodity codes and Intrastat service codes.

    • Classification of products with control classes and control groups for legal control.

    • Retransfer of commodity codes from SAP GTS to SAP S/4HANA.

  • International Trade Compliance

    • Legal Control

      • Control of legal regulations for import and export.

      • Managing of licenses in accordance with legal control for import and export.

      • Managing and release of blocked legal control documents

    • Embargo

      • Manage countries under embargo

      • Manage documents

      • Release of blocked documents

    • Intrastat – Managing Intrastat declarations and their master data.

    • Integration with SAP Global Trade Services lets you use SAP GTS functionalities in your processes.

    • Integration with SAP Watch List Screening lets you check business partners in purchase orders, sales orders, and outbound deliveries.

The solution monitors the creation of purchase and sales orders. It checks all international trade-related documents and blocks them, if e.g. an invalid license is provided, or legal regulations are not fulfilled. Missing data can also be a reason to block a document. The user can monitor and unblock resp. re-check documents from international trade fiori apps.

Technically, the block of the sales order is a blocking reason in the sales document. Such a block does not exist on the purchasing side. Therefore, the purchase order is set on hold. From the fiori app, the block of the sales order can be removed and the purchase order can be set from status held to saved.

As it sometimes happens, things within S/4HANA are not as easy as they look at first glance. Purchasing and selling goods to and from stock is one way of doing business. Another way is to ship the goods directly from your vendor to the customer.

The so-called third-party order processing is a special business process for some industries. For others, such as wholesalers, this is their daily business.

The third-party order process is as follows [2]:

  1. A sales order is created and based on the sales order item type for third-party orders, a purchase requisition is created automatically.

  2. With reference to the purchase requisition, the purchase order is created.

Unfortunately, a purchase order created with reference to a purchase requisition cannot be set on hold. The purchase order cannot be saved and therefore not be maintained by the fiori apps of international trade.

Thus, the international trade compliance check for third-party orders is technically impossible.

SAP-Note 2946124 – Functional Extensions for Third-Party Order Checks provides an interim solution.

After implementing the note, a blocked purchase order will result in an extended message. It contains the following information:

  • Document number and item number of the purchase requisition

  • Document number and item number of the sales order

  • Sold-to party resp. Ship-to party of the sales order including the name of the business partner und its country

  • The legal control, which caused the block, and its reasons (e.g. missing classification)

With this information the user can maintain the missing data. With the next try, the user should be able to create the purchase order.

Furthermore, the country of the sold-to party resp. ship-to party is checked. If it is not within the country of the purchasing resp. the supplying company code, the legal control will be checked. With this function you can check if your vendor is allowed according to the importing country.

As an alternative solution, you might consider the drop shipment scenario from Global Trade Management (GTM), which supports International Trade. Instead of using a purchase requisition as a link between the sales and purchase order, a double-sided trading contract is utilized. Once the trading contract is created by the user, sales and purchase orders are created automatically as subsequent documents, which are both checked by International Trade.

[1] see SAP Help International Trade, called 2020-08-21

[2] see SAP Help Special Business processes in Sales, called 2020-08-21
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