Skip to Content
avatar image
Former Member

Legal Responsibility Regarding Drop Shipments

Hello All,

I simplified the topic line but it is a bit more that that... let me explain..

Note: In our implementation, the FTOs are country/division specific.

Normally in GTS Export, SD Sales Order is replicated for SPL, Legal Control and Embargo checking. Simple. Currently, our configuration maps the company number assign to the sales organization which then is mapped to a Foreign Trade Organization. And the plant code is mapped to a legal unit and drives the legal regulations. Are we all on the same page?

Now, if I am selling to, for the sake of argument, a local customer, but the material will be sourced from another country. (We will call this inter-company, at the moment, but it doesn't have to be). So, when the sales order is sent to GTS, I am thinking that OK, the local company is assigned and therefore the corresponding FTO, but when it comes to the plant... hmmm. If I use the sourcing plant (like I said we are thinking inter-company here), then the legal regulations do not align with the FTO. (in customs management, the FTO would indentify yourself to Customs. Since we are not exporting, we shouldn't use our FTO.)  But if I assign local plant then the legal regulations will align with the FTO. But shouldn't the FTO and Legal Regulations come form the supplying plant/company be assigned instead? If so, is there any local responsibility in GTS for this document?

In theory, this sales order type is NOT delivery relevant since the material is sourced externally.  So, who has responsibility for this sales order in GTS? I would think that the sales company should have some in regards to SPL, Legal Control (?) and Embargo (for local, probably not).  However, let's twist this at bit further.. the customer is foreign. Would local legal regulation apply for the sale but not the supply of the material? Would then the local FTO be responsible?  I am discounting customs management because the material is source externally.

I have looked at the OSS notes from SAP regarding Inter-company but they do not seem to address my concern. Also, if the material was source 3rd-party, how should this SD document be handles in GTS?

What do you think?

Regards, Dean.

PS. Sorry, I now have a headache and I hope I didn't pass it on to any of you.

Add comment
10|10000 characters needed characters exceeded

  • Get RSS Feed

2 Answers

  • Aug 25, 2015 at 09:39 PM

    Hi Dean,

    I can imagine that the rules and regulations vary per country, but in general I would think that responsibility for Export and compliance lies with the supplier of the goods.  In the case you describe, you are acting (only) as a sales agent, brokering a supply from the delivering plant to the customer.

    If the customer is local, then according to the Incoterms, you might have responsibility for the Import.  And you might also want to carry out SPL checks on your customer.  But the export declaration, and the provision of any export licences, should be the responsibilty of the supplying plant.  Hopefully you can also persuade them to use GTS!



    Add comment
    10|10000 characters needed characters exceeded

    • Hi Dean,

      Your suggestion sounds reasonable to me, and probably the best you could do in those situations.

      In the second case, your Sales Order could either be a Debit Memo Request using the local Plant (for pricing, etc.), or a Third-Party order (with a back-to-back Purchase Order), so there should be full alignment with the FTO.

      Good thinking!



  • avatar image
    Former Member
    Oct 02, 2015 at 03:33 PM

    Hello Dave,

    I asked SAP regarding this as well.  SAP does not want to change the existing interface due to the 'customer' impact. So, I am going to tackle this internally.

    Thank you for your input.

    Add comment
    10|10000 characters needed characters exceeded