Working in an international environment can be challenging. It is therefore important that your ERP system provides you with tools to tackle these challenges and provide transparency. SAP has changed the tools it provides over time, starting with foreign trade (SD-FT) in ECC and moving to SAP S/4HANA for international trade and GTS (Global trade services) in S/4HANA.
In this blog, we want to highlight the options that SAP S/4HANA for international trade offers, with a main focus on embargo and legal control.
SAP S/4HANA for International Trade
SAP S/4HANA for international trade, like the other features for internation trade, helps you to ensure compliance to legal requirements. It is embedded in the S/4HANA package and no additional license is required.
What is included in SAP S/4HANA for international trade:
- Product classifications like commodity codes and tariff codes
- Intrastat
- Embargo check
- Legal control check
- Integration with SAP Watch List Screening
Although most functionalities in SAP S/4HANA for international trade are not new compared to Foreign trade in ECC (SD-FT), a lot of the daily business has moved from GUI to FIORI. You can also notice that features like preference calculation are not available in SAP S/4HANA for international trade. This was moved to GTS (Global trade services), which requires an additional license.
Embargo and legal control were available in Foreign trade in ECC, and although their concepts stayed the same, they look quite different in SAP S/4HANA for international trade.
What is Embargo in SAP S/4HANA?
Embargo in SAP means that you cannot trade with a specific country and all trade to this country explicitly needs to be approved.
Embargo will check the country that they are located through your plant. Then, it checks the countries of all business partners that you define as important (sold-to, ship-to, …) in your sales documents and the country is in the list of embargoed countries, the transaction gets blocked.
After performing the necessary customizing for defining the legal regulation and business partner, you have the maintain the list of embargoed countries in FIORI. This can be done by anybody with the right authorization and is not supposed to be maintained by the IT department.
When you create an order to a country in that list, it will be blocked and show this pop-up.
In Fiori, you can find you blocked documents and release them
What does Legal Control mean in SAP S/4HANA?
While Embargo means that it is forbidden to trade any product with a specific country unless explicitly approved, legal control is product dependent. Legal control does not stop all transactions to a specific country, but it helps you to control transactions for specific (dangerous) products to specific countries. These products could be chemicals or products that can be used for military purposes.
The concept in customizing, through legal regulations, is somewhat similar to Embargo, but here you additionally have to make settings to enable control classes etc. Additionally, you can introduce a set of rules for blocking or allowing transactions in BRF+.
After finishing the customizing, you have to continue with the master data in FIORI. This means, creating the control classes, classifying products and create licenses to indicate that your company is allowed to sell these (dangerous) products to specific customers or countries.
Depending on whether you use BRF+ and how advanced the rules are that you set up in BRF+, SAP will block or automatically release international sales documents.
If documents get blocked, you will get a very similar pop-up as you did for embargo and they can be released with the same app in FIORI.
As you can see in the example above, a document can also be blocked for embargo and legal control at the same time.
Conclusion
Working in an international environment brings complexity and that’s exactly why your ERP system needs to provide clear tools and transparency. SAP’s approach has evolved over time: from foreign trade (SD-FT) in ECC to SAP S/4HANA for international trade and GTS (Global Trade Services) in S/4HANA. In this blog, we highlighted the key options available in SAP S/4HANA for international trade, with a main focus on embargo and legal control. Embargo checks help ensure transactions do not violate restrictions on countries, regions, parties, or goods, while legal control supports compliance with regulatory requirements for controlled products and export/import rules. With the right setup and responsibilities in place, these capabilities help reduce compliance risk, improve transparency, and strengthen audit readiness in day-to-day operations.
At PIKON, we support companies in assessing the right SAP setup for their international trade processes covering process design, system configuration, and user enablement to ensure compliance is not only implemented, but also runs smoothly in daily business. If you’d like to explore how SAP S/4HANA for international trade and GTS fit into your landscape, feel free to reach out for a quick alignment session.
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