Compliance Rule Setup

As in other GTM features, you have to configure the following to calculate landed cost:

• Compliance Rule
• Compliance Rule Set
• Compliance Rule Set Group

Compliance Rule

Compliance rules need to be configured for landed costs.

GTM has the following additional types of rules:

1. VALUE SET RULE. This compliance rule allows you to assign a value set. The following are the characteristics of this type of rule:
   • Control Category: The control category for this type of rule is VALUE_SET.
   • Parameters: Additional parameters are added to the existing parameters - Incoterm, Incoterm Profile, Transport Mode, and Transport Mode Profile.
   • Controls: The Value Set information should be provided on the Compliance Rule: Controls tab.

By default, GTM provides compliance rules that will assign a value set to a sourcing option:

1. • BASE VALUE SET - RULE: This rule does not come with any specific parameter. It assigns the BASE VALUE SET (i.e. the charges and any other value required to calculate customs duty and tax base amounts) to a sourcing option.
   • ELC VALUE SET - RULE: This rule does not come with any specific parameter. It assigns the ELC VALUE SET (i.e. the charges and any other value required to calculate the landed cost) to a sourcing option.

2. VALUE QUALIFIER FORMULA RULE. This compliance rule allows you to apply formula expressions to one or more value qualifiers. The following are the characteristics of this type of rule:
   • Control Category: The control category for this type of rule is VALUE_QUALIFIER_FORMULA.
   • Parameters: Additional parameters are added to the already existing parameters - Incoterm, Incoterm Profile, Transport Mode, and Transport Mode Profile.
   • Controls: The information to be provided on the Compliance Rule: Controls tab is Value Qualifier, Formula Expression, and Formula Rank.

The VALUE QUALIFIER FORMULA RULE, assigns the formula and also calculates the corresponding amount. By default, GTM provides the following compliance rules:

1. • FOB VALUE FROM INCOTERM FORMULAS - Rule: GTM provides rules that calculate the FOB value from a commercial invoice value considering different Incoterms. Let's take one of them as an example, the FOB VALUE FROM CIF FORMULA – RULE. This rule will be applied to any sourcing option of landed cost simulator or any trade transaction line whose Incoterm is CIF. The FOB VALUE FROM CIF formula expression will be assigned as a result to the FOB VALUE qualifier, where FOB VALUE FROM CIF = INVOICE_VALUE – INTERNATIONAL_FREIGHT – INSURANCE.
   • ELC FORMULA – Rule: GTM provides a pre-seeded rule that calculates the landed cost. GTM will apply the ELC - Formula expression to the ESTIMATED LANDED COST value qualifier, where ESTIMATED LANDED COST = FOB_VALUE+INTL_FREIGHT + INSURANCE+DMSTC_INLAND_FREIGHT + BROKERAGE_FEE+BANK_FEE+DUTY + EXCISE_TAX + OTHER_TAX + HMF + MPF + VAT.

Note: The best practice would be to add compliance rules according to your own business needs.

Compliance Rule Set

Compliance rule sets allow you to group the compliance rules to assign value sets or formula expressions based on similar characteristics.

You can use compliance rule sets to group rules for the following purposes:

• Assign Value Sets to sourcing options to calculate the duty and tax base amounts.
• Assign Formulas to sourcing options in order to apply the formulas to value qualifiers for calculating the duty and tax base amounts.
• Assign Value Sets to sourcing options to calculate landed cost.
• Assign Formulas to sourcing options in order to apply the formulas to value qualifiers for calculating landed cost.

GTM provides the following rule sets by default:

• BASE VALUE SET – RULE SET: This rule set contains the rules that assign the default BASE VALUE SET to a sourcing option. In this case only one rule, the BASE VALUE SET RULE, is included in the rule set.
• BASE FORMULA – RULE SET: This rule set contains the rules needed to calculate the FOB value from an invoice value considering different Incoterms. It includes the eleven default rules pre-seeded in GTM.
• ELC VALUE SET – RULE SET: This rule set contains the one ELC VALUE SET - RULE compliance rule that assigns the default ELC VALUE SET to a sourcing option.
• ELC FORMULA – RULE SET: This rule set contains the rules that assign the default ELC FORMULA - RULE to a sourcing option.

Note: The best practice would be to add compliance rule sets according to your own business needs.

Compliance Rule Set Group

Compliance rule set groups allow you to group the rule sets necessary to perform landed cost calculation.

By default, GTM provides the following compliance rule set groups:

• BASE VALUE SET – RULE SET GROUP: This rule set group contains BASE VALUE SET - RULE SET that assigns a value set to a sourcing option.
• BASE FORMULA – RULE SET GROUP: This rule set group contains one BASE FORMULA - RULE SET required to calculate the FOB value.
• ELC VALUE SET – RULE SET GROUP: This rule set group contains ELC VALUE SET - RULE SET that assigns landed cost value sets to a sourcing option.
• ELC FORMULA – RULE SET GROUP: This rule set group contains the rule sets required to calculate landed cost. In this case, the group includes only one rule set, the ELC FORMULA - RULE SET.

Note: The best practice would be to add compliance rule set groups according to your own business needs.