The Race Against Time Towards NCTS 5 - How to Prepare

[Trond]

Introduction

Transit is a customs procedure that allows goods to be moved across international borders under customs control. Without a transit procedure in place, your international logistics could come to a halt.

The New Computerised Transit System (NCTS) is an electronic system for the exchange of transit information between traders and the customs authorities in the Common Transit Area and for the prenotification of goods transported to or from a third country. The Common Transit Area includes all EU member states and 8 common transit countries (Iceland, North Macedonia, Norway, Serbia, Switzerland, Turkey, Ukraine, and the United Kingdom).

SAP GTS supports NCTS communication in Belgium, Denmark, France, Germany, the Netherlands, Spain, Sweden, Switzerland, and the United Kingdom. Through project work, SAP GTS can be used in all NCTS participating countries.

Since its introduction in the late 1980s, the system has undergone various updates and improvements, including the most recent upgrade from NCTS 4 to NCTS 5.

NCTS 5 aligns the electronic transit declaration system with the legal requirements in the Union Customs Code (UCC).

All member countries of the Common Transit Convention (CTC) are required to transfer to New Computerised Transit System Phase 5 (NCTS5) by 30 November 2023. As participating customs authorities are struggling to meet the deadlines, postponements have been common and are still to be expected, leaving both software vendors, and, more importantly, traders with unprecedentedly tight schedules and extremely short implementation windows. Customs authorities are still moving their deadlines, making it difficult to plan and it will be a tight race against time.

This blog focuses on how SAP GTS customers can prepare themselves while waiting for the release of their country-specific legal change. There are plenty of activities that can and should be done in advance.

What are the Major Changes?

The message flow and nature of the transit procedure have been kept; however, the message structure has changed significantly. The new declaration structure consists of three hierarchy levels.

A transit declaration consisting of 2 House Consignments and 3 House Consignment Items may have a structure like this:

SAP GTS itself remains stable regarding header and item structure. However, to prepare for the generic changes in NCTS, apply note 3328059'Foundation for NCTS phase 5 in countries of the Common Transit Convention (CTC) and the EU’. This can be done before the country-specific notes are released.

Communication

Starting with NCTS Phase 5, new messaging interfaces for the exchange of messages with customs authorities are introduced in SAP GTS. These are Enterprise Services based and called Customs Message Exchange (CME).

In comparison to the established IDoc interface, the Customs Message Exchange has two key advantages:

• It is based on the Enterprise Services technique, which is a worldwide standard with a low infrastructure footprint


• The payload is already structured as required by customs authorities

The Customs Message Exchange consists of three Enterprise Services:

1. Sending a message to customs authorities (CustomsMessageExchangeRequest)

2. Receiving the final state of an outbound process (CustomsMessageStatusNotification)

3. Receiving a message from customs authorities (CustomsMessageExchangeConfirmation)

To prepare for the changes in message exchange, apply note 3318211, 'Customs Message Exchange: Introduction of a Web Service for communication between SAP GTS and the converter for customs communication’. This can be done before the country-specific notes are released.

Seeburger BIS 6.7 v13 and v14 are the minimum required versions for NCTS 5. If you have not already upgraded, please apply note 3083392 Cross-country conversions for SEEBURGER BIS 6.7.

SAP recommends being on the latest available service pack before implementing the NCTS changes. For SAP GTS 11.0 and SAP GTS, edition for SAP HANA 2020, that is, the service packs 21 and 4, respectively. Both service packs were released in March 2023.

How do you win the race against time?

1. Align internally between Business and IT and work together towards NCTS 5. This is, like all projects, much more than just a technical upgrade.


2. Establish communication with your local customs authority - understand their timeline and expectations towards your organization.


3. Keep yourself up to date with the Legal Change Notifications from SAP specific to your countries.  Belgium, Denmark, France, Germany, the Netherlands, Spain, Sweden, Switzerland, and the United Kingdom.


4. If possible, be on the latest service pack for your version of SAP GTS. This will make the implementation easier. It is still possible with earlier service packs, but the complexity goes up, as more interdependent notes must be installed in the right sequence.


5. If not already on Seeburger BIS 6.7 v13 and v14, do the upgrade. See note: 3083392.


6. Implement the foundation for NCTS phase 5. Apply note: 3328059


7. Prepare for the change in message exchange methodology. Apply note: 3318211


8. Most customs authorities provide a possibility for onboarding and testing of communication even before you are ready to transmit declarations. It would be a great time saver to get that sorted out in advance. Contact your customs authority for details.