Preferential Processing Preference Process in GTS supports exporters in fulfilling all legal requirements for customs preference and identify their goods as eligible for preferential treatment. Based on this documented eligibility for preferential treatment, the exporters customers can import these goods duty-free or at a reduced rate of import duty.Preference Processing has the following features. Manage vendor based long term declarations (LTVDs) and customer based LTVDs Preference calculation based on preference agreements and preference models for standardized products with static BOPs Make a statement on the preference eligibility of a product based on preference determination Print preference statements Requests and reminders for long terms vendor declarations NAFTA blanket certification of Origin Long term vendor declarations Revocation for long term declarations Cover letters for the various documents NAFTA certification of Origin Certification of Origin for EU A TR movement Certification EUR 1 movement certification INF4 information sheetProcess:

1. The feeder system transfers information on vendor-product relationships to the GTS system for preference processing. The GS system creates a worklist from this data for further processing.2. If we have to include goods receipts from vendors who do not originate in our preference zone in the aggregation of vendor declarations, we can flag them as not relevant for requests, but relevant for aggregation3. The system selects the products and the corresponding vendor master data from the worklist for cases where vendor declarations are not available4. The system creates requests for vendor declarations for the selected products, based on the corresponding Vendor data. It uses various media to do so, such as smarforms, We can now send the requests for vendor declarations to the vendors5. When we receive vendor declarations from our vendor we have to enter them in the GTS system.6. The system determines if a valid vendor declaration is available for a product. It aggregates valid, invalid or missing vendor declarations7. The system uses the threshold value from preference determination. In this process, it combines the statements for each material, based on the rules and procedures of the preference agreement, regardless of whether valid or invalid vendor declarations are available8. When we create or change an order or billing document in the feeder system, the system compares the threshold value with the ex works prices from the order or billing document9. If product is eligible for preferential treatment, the system sets the preference indicator10. We can issue the vendor declarations for customers purposeStarting Preference Processing:-Prerequisites to start preference Processing are1. Define Administrative Unit for vendor declarations

Save it 200546 is created as Administrative unit for vendor declaration2. Define Adminisrative Unit AttributesClick on Administrative unit and choose Assign organizational unit under dialog structure

Master Data for preference processing:1. Define Legal Regulation2. Assign Country/Country Group to Legal Regulation3. Define Administration Unit4. Define either Cross-Plant or Plant based configuration5. Define Administration Unit attributes6. Activate Preference agreement at country/Country Group Level7. Define Rule set8. Control settings for vendor declarations9. Define standard Texts and Logos10. Control settings for vendor based long term vendor declarations11. Control settings for customer based long term vendor declarations12. Assign preference Agreement to Rule set13. Define Preference Indicator14. Assign Preference Indicators to Schema15. Assign Preference Indicator schema to Rule setActivating the preference processing Service: Activate preference processing at Document types and Item categories and at preference agreementsAs a prerequisite, we have already define the document types under SAP GTS-General SettingsDocument structure and assign these documents to the documents types at the feeder system level.Define the item categories under SAP GTS-General SettingsDocument structure and assign these item categories to the Item categories of feeder system level.Define Preference agreement as Legal regulation under SAP GTS-General SettingsLegal regulationActivating Document types:- Choose SAP Risk managementGeneral settingsActivate document typesIn the customs document type column, use the document type we use for preference processing. Here we can add multiple document typesSave entriesActivating Item categories:-Choose SAP Risk ManagementGeneral settingsActivate item categoriesIn the Item category column ( customs document item category),, use the item category we wish to use for preference processing.Activate this for multiple item categories and save entries.Activating preference agreement:-Choose SAP Risk Managementpreference processing Service Activate preference Agreements.In the dialog structure, choose preference processing: Activate legal regulations and select a Preference agreement.Decide whether the preference agreement is valid for a country of country group and choose The relevant entries in the dialog structure.

In the preference Imp and Pref Exp columns, use the dropdown list for each preference Agreement to choose which processes in the feeder system trigger the preference processing in GTS. You have option to choose1. For dispatch only2. For export procedures only3. For dispatch and export , excluding domestic activities4. For dispatch and export, including domestic activities5. Check not activatedActivate preference for combination of country or country groups of departure and country or country groups of destinationSelect destination levelSave entriesDefining Determination procedure for Active Agreements: The determination procedure used to find an active preference agreements at country level. We thereby determine which agreements the system applies when we specify a legal unit in the application.Prerequisites for determining such is defining determination procedure for the legal regulation in the general settingsChoose the menu path SAP Risk ManagementPreference Processing serviceassign determination procedure for active preference agreementsIn the preference agreement determination procedure field, use the determination procedure LEPRE and save