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Configuring License Type Determination Procedures

<div id="content"><p tabindex="0">The strategies for the determination of license types required in import or export processes are predefined in the program code. They are combined in determination procedures that can be assigned to legal regulations (<i>SAP Global Trade Services, edition for SAP HANA</i> → <i>Compliance Management</i> → <i>Legal Controls</i> → <i>Define Determination Procedure to Automatically Determine License Types</i>).</p><p tabindex="0">Delivery Customizing contains ten determination procedures comprised of one or several determination strategies. Customer-specific determination procedures adapted to various legal requirements will have to be added.</p><img style="max-width:900px;max-height:none" class="image 1_1_landscape" title="Determination Procedures in Legal Control (Examples)" alt="Determination Procedures in Legal Control (Examples)" src="/service/media/GTS400_20_en-US_media/GTS400_20_en-US_images/Determination_Procedures.png" tabindex="0"><div class="imageCaption"></div><p tabindex="0">License type determination uses a condition technique specific to SAP GTS. Determination procedures are essentially access sequences. The determination strategies combined in a determination procedure act as condition tables. Contrary to condition tables in SAP ERP systems, however, they cannot be changed or enhanced by Customizing.</p><p tabindex="0">Each legal regulation activated for legal control requires the assignment of a determination procedure in the <i>License Type Det. Procedure</i> field (<i>SAP Global Trade Services, edition for SAP HANA</i> → <i>Compliance Management</i> → <i>Legal Controls</i> → <i>Control Settings for Legal Control</i>).</p></div>

Determination Procedures

<div id="content"><p tabindex="0">SAP GTS provides more than 20 predefined strategies for license type determination. These strategies use a set of search criteria that are applied separately and in different combinations. Determination strategy CD13, for example, combines country, control class and control grouping whereas strategy CD09 uses only the legal regulation for license type determination.</p><img style="max-width:900px;max-height:none" class="image 1_1_landscape" title="Strategies for License Type Determination" alt="Strategies for License Type Determination" src="/service/media/GTS400_20_en-US_media/GTS400_20_en-US_images/Determination_Strategies.png" tabindex="0"><div class="imageCaption"></div><p tabindex="0">In legal control, the term "determination strategy" is used twice. On the one hand, it refers to the predefined condition tables combined in the determination procedures introduced in this lesson. On the other hand, it is used for the condition records that specify the search criteria assembled in these condition tables.</p><div class="note"><div class="noteTitle"><span class="noteIcon"><img title="Note" src="/icons/note.svg"></span><span class="noteTitleText">Note</span></div><div class="noteBody">The examples in the video <cite>Strategies for the Determination of License Types</cite> should be understood as proposals for a possible solution to the question of compliance with the EAR. You might consider other combinations or other sequences of determination strategies more appropriate.</div></div><div class="kalturaVideoLessonWrapper"><div aria-label="Strategies for License Type Determination" class="kalturaVideoLessonContainer" data-testid="video" id="1_l9gbakur"></div></div></div>

Determination Strategies

How to Define a Determination Procedure

Configuring and Using Legal Control

License Type Determination

In the example, certain dual-use items are exported from the United States to various other countries. These items are classified under different ECCNs on the CCL. All other items are classified under the "basket" code EAR99. The first extract from the CCL shows the entry for ECCN 2A001. The reasons for control are National Security, Missile Technology and Anti-Terrorism. The reason Missile Technology only applies to ball bearings of certain characteristics. Two list-based license exceptions are available if the reason for control is not Missile Technology. According to the country chart, the reason for control National Security Column 2 does not affect exports to signatories to the Wassenaar Arrangement. The reason Missile Technology, however, is relevant for all destination countries except Canada. There is currently no entry in the country chart for the reason Anti-Terrorism. The second extract gives similar information on ECCN 2A101. All ball bearings classified under this ECCN can be used for missile technology purposes. As a consequence, there are no license exceptions for exports of these ball bearings. The third extract shows the relevant details for ECCN 2A225. The main reason for control is Nuclear Nonproliferation. Again, there are no list-based license exceptions. According to the country chart, the reason for control Nuclear Nonproliferation Column 1 is not relevant for members of the Nuclear Suppliers Group. Based on these findings, three country groups have been created for license type determination in the learning system. They map country groups defined in Supplement No. 1  to Part 740 of the Export Administration Regulations. Country group ZWPS represents country group A:1, Wassenaar Participating States. Country Group ZNSG maps country group A:4, Nuclear Suppliers Group, and country group ZGBS, largely corresponds to country group B that comprises all states except countries under embargo, most of the republics of the former Soviet Union, China, and of course the United States. Setting up license type determination is certainly not an easy task. It might help to first prepare a spreadsheet listing the relevant combinations of destination countries or country groups, ECCNs, and if applicable control groupings to get an overview of the requirements. In the next step, suitable license types can be assigned in the appropriate sequence. In the lesson "Maintaining License Type Determinations Strategies", we will use this example, among other things, to set up license determination for exports and reexports of items subject to the Export Administration Regulations. The example should be understood as a solution proposal only. Depending on the destination and the ECCNs of the items to be exported, other combinations or other sequences of determination strategies might be better suited.

Definition of Determination Procedures

In the learning system, two customer-specific determination procedures have been added to the ten procedures provided in delivery Customizing. The first of the two determination procedures is intended for license type determination in the European Union. We will use this procedure in the lesson "Maintain License Type Determination Strategies". The second determination procedure has been created mainly for license type determination based on the Export Administration Regulations. This procedure consists of three determination strategies: CD14, CD02 and CD05. A determination procedure is essentially an access sequence. In our example, the system will therefore first try to find a license type using the country group of the destination country, the control class, that is, the ECCN of the product, and the control grouping assigned to the product in addition to the ECCN during classification for legal control. If this attempt fails, the system will use the second strategy to determine a license type now based on the combination of destination country and ECCN. If necessary, a final attempt is made using only the country of destination. Unless explicitly configured otherwise, the access to determination procedures is exclusive. If the system is able to determine a license type and subsequently a license of this type, it ends the search. The determination procedure ZGTS2 has been assigned to the legal regulation representing the Export Administration Regulations. As the system should be able to find several license types when applying a determination strategy, the "Cascade Active Within Approval Type Determination" indicator is set. The term "cascade" here means the consecutive numbering of the condition records created for a determination strategy. The system could, for example, first search for a suitable license exception. Only if there is no license exception for a particular export, the system should determine a license type for licenses. As the first strategy of the determination procedure, ZGTS2, uses country groups for license type determination, the "Check Multiple Country Groups when Determining License Types" indicator has been set. If this check was not activated and the destination country was member of several country groups, the system would only consider the country group assigned to the legal regulation ZEAR that comes first in alphabetical order. In countries where several licensing authorities are involved in import or export control, an exclusive access to determination procedures would not yield the required results. This is for example the case in Switzerland. In delivery Customizing, the check of multiple license types is therefore activated in the settings of the legal regulation ECCH, Export Control - Switzerland. The only determination strategy assigned to determination procedure CTYG3 is CD04 that uses country group and control class as search criteria in license type determination. Based on the settings of the legal regulation ECCH, the system can find several license types for the same combination of country and control class and use them all in a particular export process. However, the issuing authorities have to be indicated in the license types created for legal regulations that allow the assignment of licenses of different license types to the same line item. The license types provided in delivery Customizing for legal regulation ECCH are therefore set up accordingly.