Friday, October 29, 2010

New Computerized Excise Movement and Control System (EMCS) Requirements In Europe

For companies doing business in Europe, there are some new electronic message (EDI/B2B) requirements that must be in place by January 1, 2011.  Don't you just love governments telling you where to spend your IT budgets?

Since April 1, 2010, companies which transport excisable goods under duty suspension have been 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 migration must be completed by January 1, 2011.  You didn't have anything planned for the holiday season did you?

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.

Each EU member state will be required to administer its own EMCS in addition to a set of real-time connections to all of the other EMCS locations throughout Europe.

Here is what e-Invoicing expert Scott Lewin had to say about these requirements, “The new EMCS regulations in the European Union will simplify administration procedures and make it easier for companies to manage the movement of goods among various countries.  However, the change from a paper-based system to an electronic real-time process poses many challenges for most companies. Companies have until the end of the year to make this transition." 

Of course, Scott Lewin's company, Crossgate (a company co-owned by SAP) now has a managed B2B services offering to help companies doing business in Europe support these requirements.  They have posted more information and a diagram depicting how the EMCS process will work here.

If you have questions about how the EMCS process works, please let me know.   If I don't have the answers, I will try to point you in the right direction.

Kevin R Benedict SAP Mentor, SAP Top Contributor, SAP Blogger
Independent e-Invoicing and EDI Analyst and Consultant
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*Full Disclosure: I am an independent consultant that has worked with and for many of the companies mentioned.

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