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Case Studies

E-Customs Solution Smoothens Continental’s Journey in China

German Technology Company digitizes cross-border payments 


About

Based in Hanover, Germany, Continental AG (Continental) is a global leading manufacturer of automotive equipment, specializing in brake systems, interior electronics, automotive safety, tires and other parts for the automotive and transportation industries. The firm employs over 240,000 people and serves customers in 544 locations across 60 markets, generating EUR 44 billion in sales revenue in 2018.

Continental has been in China since 1994, and today boasts 27 production facilities and 17 research and development centres in the market. With the growing popularity of electric and self-driving cars, the firm continues to invest heavily in hopes of providing more innovative solutions to Chinese customers.

The Challenge

Prior to 2019, managing foreign currency payments was a major challenge for Continental in China. Each month, the company makes more than 1,800 cross-border payments to over 500 global suppliers and intra-group companies from 40 legal entities in China – converting approximately 2.4 billion Chinese yuan (CNY) into euros on a monthly basis.

 

The challenge was exacerbated by China’s complex regulatory environment where companies had to provide supporting documents to their banks – in the form of an invoice, contract, purchase order or customs declaration form – to make cross-border payments to overseas suppliers. As a major importer of automotive supplies, a single bulk payment by Continental often comprised of 30 to 40 customs declaration forms that had to be manually collated, matched and delivered to its bank for verification. The process was incredibly time and resource consuming, and the high level of manual intervention meant the process was prone to errors which exposed the firm to significant operational and fraud risks.

Continental needed a solution that would allow its team to automate the documentation process and efficiently manage its large volume of foreign currency payments.

The J.P. Morgan Solution

Continental partnered with J.P. Morgan to implement E-Customs – an innovative payment solution that fully digitizes and automates the cross-border payment process for trade of goods. The solution enables Continental to go fully digital – cross-border payments can be initiated simply by sending the 18-digit customs declaration form numbers associated with each payment to J.P. Morgan through host-to-host or online interactive portal J.P. Morgan Access® within seconds.

Using application programming interface (API) technology and with Continental’s authorization, J.P. Morgan will be able to retrieve the status of all customs declaration forms from the local custom authority via the Shanghai International Trade Single Window in real-time and process the payments automatically. 

The Result

The E-Customs solution has improved Continental’s overall operational efficiency through:

  • Reduced documentation requirement as the firm can now initiate payments by simply providing the associated customs declaration form numbers.
  • Enhanced workflows as data can now be transmitted to the bank within seconds.
  • Enhanced controls by eliminating manual intervention and risk of fraud while keeping the business fully compliant with local regulations.
  • Time and resource savings as the treasury team can now focus on more value-added activities.

“The E-Customs solution has helped us improve efficiencies and lower risks of human error and fraud, by fully digitizing a process that was previously extremely tedious and inefficient, while still complying with local regulations.”

 

Jason Tan
Head of Treasury & Credit Management
Asia / Finance, Controlling, Law & IT
Continental China & Automotive Asia

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