Configuring Classification for Dual-Use Items

The effectiveness of legal control largely depends on the full and correct classification of the products subject to import or export control regimes. Any relevant list of controlled items like, for example, the CCL or the list of dual-use items in Annex I to the Dual-Use Regulation has to be mapped in SAP GTS in the form of a numbering scheme in combination with a numbering scheme content.

Delivery Customizing contains a numbering scheme and a numbering scheme content representing the CCL (USECC and USECC_CT respectively). The numbering scheme USECC is assigned to the legal regulation EAR.

There is no delivery Customizing for the Dual-Use Regulation. However, the numbering scheme DEALN and the numbering scheme content DEALN_CT Germany - Export List could be used as templates for a customer-specific numbering scheme and a customer-specific numbering scheme content representing the list of dual-use items.

The manual maintenance of the usually few relevant codes is often preferred to the upload of entire lists bought from a data provider. Moreover, not all control regimes actually define codes for the controlled items, but instead provide a narrative description. Other control regimes refer to chapters, headings, or subheadings of the Harmonized System (HS) to specify the items subject to their control.

These types of lists are often encountered in legislation establishing sanctions. Therefore, the lesson Configuring Classification for Goods Subject to Sanctions deals with the mapping of such lists in SAP GTS.

A numbering scheme intended for classification for legal control has to be assigned to at least one legal regulation activated for this application area. In the next step, a basic choice between two methods of classification has to be made at legal regulation level:

• Worst-case: All products are suspected to be subject to the control regime unless it is expressly found otherwise.
• Best-case: No product is suspected to be subject to the control regime unless it is expressly found otherwise.

In the control settings for legal regulations, an indicator is provided for each of the two methods (SAP Global Trade Services, edition for SAP HANA → Compliance Management → Legal Controls → Control Settings for Legal Control):

• A Every Product Is Relevant for Checks (worst-case)
• B Only Specifically Selected Products Are Relevant for Checks (best-case)

The choice made in the Product Master Maintenance field has an immediate effect on the Legal Control tab in the product master. In the worst-case scenario, the system considers master data maintenance incomplete if a product has not been classified under the list, or lists, of controlled items assigned to the active legal regulation or regulations. If the product is not subject to a control regime, it has to be flagged accordingly using the No Control indicator.

In the best-case scenario, the system does not expect any classification at all. If a product is subject to the control regime, a corresponding code has to be assigned and the Individual Maintenance indicator has to be set to complete classification.

Control groupings are additional data in classification for legal control. They can be used in license type determination in addition, or as an alternative, to the control classes of the products to be imported or exported. As the term suggests, control groupings are meant to group control classes based on freely definable criteria. Their purpose is to simplify license type determination, that is, to reduce the number of determination strategies to be created.

Control groupings can be defined using the Manage Control Group for Products app. However, these groupings can only be assigned to products on the Legal Control tab if their use is activated in the control settings of the relevant legal regulation or regulations by setting the License Type Grp. Act. indicator.

After the activation of the use of control groupings, the Grouping field on the Legal Control tab of the product master has to be filled in combination with the field for the control class to complete classification for legal control. The assignment can be made individually or during mass classification.

Peculiarity codes that can be assigned to products in addition to or instead of control groupings can play a role in license determination. There is no particular business case for the use of peculiarity codes. They can be freely defined using the Manage Peculiarity Codes app.