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Process documentation Scenario - Exporting from a Customs Union Locate the document in its SAP Library structure

Purpose

This scenario describes the process and considerations involved in exports and imports when a member state of a customs union trades with a third country. (See The Situation Within Your Own Country). In this scenario, we use the European Union (EU) as an example.

Trade between member nations of a customs union involves the arrival and dispatch of goods. Transfers to a location outside a customs union are referred to as exports and transfers into a customs union are referred to as imports.

This graphic is explained in the accompanying text

Considerations

Exporting from member nations of a customs union to non-member countries generally carries with it the same rules and regulations for exporting from a third country to another country (see Scenario - Exporting to a Third Country), however, there are some additional considerations when trading with countries outside of a customs union. These are discussed briefly below.

EXTRASTAT declarations

The extra-European Union trade statistics (EXTRASTAT) declaration for imports and exports is a monthly declaration that provides EU authorities with statistics on trade between EU member states and non-EU countries (for example, trade between Italy and Brazil).

This declaration helps keep track of commodities that are transferred out of the European Union. (See Structure link Periodic Declarations and Structure link Creation of Periodic Declarations).

CAP Restitution, Imports and Exports Outside the EU

The Common Agricultural Policy (CAP) in the EU controls both the import and export of most agricultural goods into and out of the community. These regulations protect farming within the EU from cheap imports from third countries. This guarantees the permanent supply of basic food products for the European population and prevents dependence on other countries for the supply of food. To some extent, CAP guarantees the supply of an appropriate quantity of community products to the European market, free of customs duties. Quotas and customs duties also help to restrict the import of goods from third countries. Furthermore, importers must be granted licenses by the national authorities of the relevant EU state.

Fixed prices have been set for certain goods, which are normally higher than the natural trading price on the world market. Price fixing causes problems for those who want to export agricultural goods from the EU to third countries at a price that will cover their costs. To compensate exporters for the difference in the fixed price in the member states and the lower world market price, the EU guarantees export restitution under certain conditions. Under the CAP in the EU, exporters are refunded the difference between the EU fixed price and the world market price when they export market-regulated goods.

There is a similar regulation in the USA regarding agricultural exports.

Printing Export Documents

Exporters are required to provide all necessary documentation to accompany exported merchandise to its destination. Using the SAP Foreign Trade (FT) application, you can print the following paper documents for the EU:

See also:

Structure link Communication / Printing

Structure link Printing Export Documents in Foreign Trade

Structure link Output in Foreign Trade

Process

Scenario I – Export from an EU Member State to an Independent Third Country

For this scenario, Italy – a member of the European Union – intends to export merchandise to Brazil, a country with which Italy has no trade agreement. In this scenario, company I in Italy exports goods to Company B in Brazil.

  1. All procedures and regulations apply that concern exporting to a third country.
  2. Company B pays customs duties due on the inbound materials.
  3. Company I completes an EXTRASTAT declaration for exported goods within the time required by law (usually within 10 to 15 working days in the following month) and send it the appropriate EU authorities.

Scenario II – Dispatch from an EU Member State to another EU Member for Subsequent Sale and Export to a Third Country

In this scenario, Company I, in Italy, purchases merchandise from Company A, in Austria, and then exports it to Company B, in Brazil.

  1. In this case, Company A ships the merchandise to Company I and completes an INTRASTAT declaration for dispatch.
  2. Company I must comply with procedures and regulations, such as licensing requirements, that apply to exporting to a third country.
  3. Company I must file an INTRASTAT declaration for a receipt within the EU.
  4. Company I must also file an EXTRASTAT declaration for the export of merchandise to Brazil.

Scenario III – In-Bond (Duty Unpaid) Dispatch from an EU Member State to another EU Member State for Export to a Third Country

In this scenario, goods originating in Austria are shipped in-bond, duty unpaid, to a freight forwarder in Italy and from there to Brazil. Export processing for these goods takes place in Austria and not in the country where the shipping port is located.

  1. In this case, Company A, in Austria, first ships the merchandise to the freight forwarder (Company I) in Italy and completes an EXTRASTAT declaration for dispatch to Italy.
  2. Company A must also complete a T1 document for transporting foreign merchandise in bond in the EU.

    3. Note

    The T1 document is used as a declaration for transporting duty unpaid goods between two locations (in-bond) within the EU customs territory. This applies not only to two countries within the EU, but also between a port and an inland city where the customs procedures will be completed (for example, to transport goods from the port in Hamburg, Germany, to Frankfurt). Since customs inspections may take place anywhere along the route, the T1 document must always accompany the goods.

  3. Additionally, Company A must file an EXTRASTAT declaration for the export of merchandise to Brazil and comply with procedures and regulations, such as licensing requirements, that apply to exporting to a third country.
  4. Company I in Italy receives the goods from Austria into a foreign trade zone or a bonded warehouse. The time limit for storage of foreign goods in a bonded warehouse varies from country to country.

Exception

When goods are transported through Switzerland a T2 document is required.

See also:

Scenario - Importing to a Member Country of a Customs Union

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