Table of Contents

Changing Legislation EMCS Moves Electronic ..................................................... 3 EMCS - Basic Process Diagram ............................................................................... 4 Message Matrix with EMCS ................................................................................... 5 The Invoiceware International Solution ................................................................. 6 Summary ............................................................................................................... 8

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Changing Legislation EMCS Moves Electronic

Since the creation of the European Union Internal Market in 1993, the movements of excise goods among EU countries have been accompanied by a paper-based document, the Accompanying Administrative Document (ADD). The system was designed to ensure appropriate payment of taxes while respecting the principle of free trade among EU countries without requiring customs controls at the borders between Member States. But today, as many paper-based business processes are being automated and converted to electronic data exchange, government regulations are changing to keep pace with technology. As of April 1, 2010, companies which transport excisable goods under duty suspension are now required to migrate from traditional paper-based ADD systems to a computerized Excise Movement and Control System (EMCS) that uses electronic messages to monitor movements of excise goods. The new regulations will have the most profound effect on companies trading in alcohol, tobacco, and energy products, which have the most commonly applied excise duties. Under EMCS, a movement of excise goods between two traders is monitored through every stage of the shipment using an electronic Administrative Document (e-AD) issued by the consignor. The e-AD must be validated by the EMCS of the Member State where it is originated. The e-AD is then transmitted electronically to the EMCS of the destination Member State, and it is forwarded to the consignee. When the goods are received, the consignee submits a report to all involved Member States and the consignor, acknowledging receipt and noting any anomalies in the shipment.

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EMCS - Basic Process Diagram

1. The consignor submits the e-AD 2. The Member State of dispatch validates the e-AD and sends it back to the consignor (including the AAD Registration Code ARC) 3. The consignor dispatches the excise goods 4. The Member State of dispatch transmits the e-AD to the Member State of destination 5. The Member States of destination forwards the e-AD to the consignee 6. The excise goods arrive at destination 7. The consignee submits a report of receipt 8. The Member Stat of destination validates the report of receipt and sends it back to the consignee 9. The Member State of destination transmits the report of receipt to the Member State of dispatch 10. The Member State of dispatch forwards the report of receipt to the consignor.

The above flow is the basic business process; however, technical solutions also need to be able to handle the following message flows. Intra-European Union Movements: Triggered by an Outgoing e-AD Intra-European Union Cancellations Intra-European Union Reminders, Refusals, Partial Refusals EMCS Imports EMCS Exports

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Message Matrix with EMCS

Party Message Direction Source of Information SAP System EMCS Consignee SAP System SAP System EMCS EMCS External Party Description

815 801 818 Consignor 813 810 829 839 801

Outbound Inbound Inbound Outbound Inbound Inbound Inbound Inbound

Shipment Request EMCS Approve/Reject Report of Receipt Change of Destination Cancellation Accepted Export Rejected Export EMCS Approval/Rejection (815 Response) Report of Receipt Cancellation Diverted Refusal Reminder Explanation of Delay Syntax Error

Consignee

818 810 803 704

Outbound Inbound Inbound Inbound Inbound Both Inbound

SAP External Party External Party EMCS EMCS SAP EMCS

Either

802 837 917

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The Invoiceware International Solution

Invoiceware Internationals turnkey e-AD service is fully integrated with SAP and offers real-time integration with EMCS systems throughout Europe. Messages are transmitted directly out of SAP across the Global Compliance Network to the required government regulatory agencies. A customized EMCS transaction monitor enables viewing and management of both inbound and outbound events, along with mapping and communication of each message type between the Member States EMCS and the companys SAP environment. Outbound message requests are tracked and highlighted directly within the SAP Compliance Dashboard, both at a process level (to track the overarching status per ARC number) and at a message level (to clearly indicate current status for each step throughout the entire process). The solution manages the full EMCS message set, including provisions for managing messages associated with process variations such as cancellations, redirections, partial refusals, reminders, imports, and exports. The key difference to other solutions is the SAP Rapid Deployment Template & Compliance Dashboards. Your end users can handle all EMCS processes from directly within their SAP system and standard user screens without having to log into a second bolt-on application. Functional Components: SAP Rapid Deployment Template & Compliance Dashboard ABAP code that provides fields & functionality for EMCS execute directly from SAP Handles both Sending and Reception of EMCS Documents Create 815 from standard SAP shipment transaction Monitor EMCS approval lifecycle interactively with real-time update messages Print/Email EMCS movement documentation Cancel 815 from monitor, including integration with SAP shipment transaction Reprocess rejected EMCS from Monitor Create & Transmit Explanation of Delay messages from within monitor Includes Intra-Country Movements, Change of Destination, Cancellations, Reminders, EMCS Exports & Imports Deep Integration & Managed Service Create & Transmit Explanation of Delay messages from within monitor Includes Intra-Country Movements, Change of Destination, Cancellations, Reminders, EMCS Exports & Imports Receives/sends IDOCs to/from SAP Converts IDOCs to XML format required by EMCS Converts approved EMCS_XML into IDOC update Submits XML to local EMCS systems for validation Receives approved XML back with ARC number Provides long term archive and web-based front-end for status info, historical research

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Outbound SAP Dashboard & Monitor Process Flow

Inbound SAP Dashboard & Monitor Process Flow

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Summary
As of April 1, 2010, companies which transport excisable goods under duty suspension are now required to migrate from traditional paper-based ADD systems to a computerized Excise Movement and Control System (EMCS) that uses electronic messages to monitor movements of excise goods. Invoicewares turnkey EMCS Managed Service: Fully integrated with your ERP system Offers real-time integration with EMCS systems throughout Europe; messages are transmitted directly out of the ERP system across the Global Compliance Network to the required government regulatory agencies. A customized EMCS transaction monitor enables viewing and management of both inbound and outbound events, along with mapping and communication of each message type between the Member States EMCS and the companys SAP environment. Outbound message requests are tracked and highlighted directly within the Compliance Dashboard, both at a process level (to track the overarching status per ARC number) and at a message level (to clearly indicate current status for each step throughout the entire process). Manages the full EMCS message set, including provisions for managing messages associated with process variations such as cancellations, redirections, partial refusals, reminders, imports, and exports. About Invoiceware International Invoiceware International operates the Global Compliance Network, a cloud-based platform that delivers financial and supply chain managers the processes that they need while eliminating ERP configurations and customizations for the IT staff. A single connection to the network, simplifies the mandates, the implementation, and the ongoing change management associated with regulations the Americas, Europe and Asia, including Brazil Nota Fiscal, Mexico SAT, Argentina AFIP and Europes Excise Movement & Control System. Invoiceware International is headquartered in Miami, Florida with operations worldwide. For more information, please visit: www.invoicewareint.com

Contact Us Please visit www.invoicewareint.com for more information or contact us at North America Headquarters: 80 SW 8th Street Suite 2000 Miami, FL 33130 (786) 373-8540

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