T1 and T2 transit procedure

Excerpt from Practical Guide to SAP GTS Part 3: Bonded Warehouse, Foreign Trade Zone, and Duty Drawback by Rajen Iyer, Ashish Galchhaniya.

If we create a transit procedure along with a customs export declaration, for example, to transport duty-unpaid products in customs procedures with economic impact for export, we can transport these goods to the customs border with this increased security.

Non-community goods are transported in the T1 transit procedure, while community goods are transported in the T2 transit procedure:

T1 transit procedure: Transport of non-community goods between two locations in the community or among the community, EFTA countries, and Romania.

T2 transit procedure: Transport of community goods between two locations in the community via an EFTA country; transport of community goods among the community, EFTA countries, and Romania.

The transit procedure simplifies export processing, as the goods need not be presented at the border customs office (export customs office). The goods only have to be presented at the office of departure, which is usually an inland customs office. At the office of departure, the transit declaration is submitted. The office of departure checks the authenticity of the goods and releases them for export.

Transit procedure simplifies imports
The transit procedure also simplifies imports. The goods being transported are presented to the office of destination, also an inland customs office, within a time period prescribed by law, to discharge the transit procedure. Only customs offices that are authorized under the Transit Procedure Agreement can act as offices of destination. The office of destination initiates the procedure for releasing goods for free circulation, or another customs procedure, thus relieving the burden on the border customs office (office of entry). Therefore, the goods are transported to the office of destination in bond. However, they are under customs control during this process.

The New Computerized Transit System (NCTS) allows the transit procedure to be processed using Electronic Data Interchange (EDI). It is based on a UN standard for EDI communication and is used in all European Commission (EC) member states and in Iceland, Norway, and Switzerland.

Every participating country has developed its own data processing system under detailed specifications from the EC. All the data is combined in a network in Brussels. In Germany, the NCTS is part of the ATLAS system, the IT procedure of the Federal Customs Administration (FCA) (special procedure ATLAS transit).

Necessary software
To work with the NCTS, GTS needs an EDI converter, which is software that translates messages in EDI format into the format required by the recipient and that sends and receives messages. You also need participant software that has been certified by the national customs administration.

GTS, with converters from the Seeburger, has been certified for NCTS access by the customs administrations in Germany, France, the Netherlands, and Switzerland. Participants also need a customs number for their company-specific data and a business identification number (BIN), which serves as an electronic signature.

Keep reading in Practical Guide to SAP GTS Part 3: Bonded Warehouse, Foreign Trade Zone, and Duty Drawback by Rajen Iyer, Ashish Galchhaniya.

SAP Global Trade Services (GTS) helps companies maximize supply chain performance and reduces the overall cost and risk of global trade by ensuring regulatory compliance, accelerating trade activity, and enabling trade compliance automation.

The Practical Guide to SAP GTS Part III explores how companies can increase their competitive advantage with automation, effective supply chain management, and trade preference programs, agreements, and zones to increase their profit margin. Delve in detail into foreign trade zones, bonded warehouse, and duty drawback. Walk through GTS bonded warehouse processes, including transit processes and procedures. Explore how duty costs can be reduced or eliminated using a duty drawback program. By using practical examples, tips, and screenshots, the author brings readers quickly up to speed on getting the most out of SAP GTS.

– Leveraging and configuring bonded warehouse
– Fundamentals of foreign trade zones
– How business users can get the most out of GTS functionality
– Detailed configuration and user guides for bonded warehouse and foreign trade zones

Author Rajen Iyer is the co-founder and CTO at Krypt, Inc. of the fastest growing Global Trade and Supply Chain solution providers with innovative products and services. Rajen is a thought leader with several best-selling books, in-depth articles, and trademarks on Trade, Logistics, and Supply Chain products. He is frequently invited to speak at industry conferences.

Author Ashish Galchhaniya is an SAP SD & CS certified consultant with more than 12 years’ experience. He has worked extensively on GTS bonded warehouse (CBW), inward processing (IPR), processing under customs control (PCC), free circulation (FC), foreign trade zone functionality (FTZ), and preference processing (NAFTA, EU_MX) projects.