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Understanding the Assignment of Licenses to Documents

<div id="content"><p tabindex="0">Most companies export only a few dual-use items. Nevertheless, compliance with the export control regimes based on international agreements has to be ensured throughout the sales process.</p><p tabindex="0">SAP GTS identifies dual-use items in an export document from their classification on the <i>Legal Control</i> tab of their product master data. Users can check the classification on the <i>Classification</i> tab at line item level.</p><img style="max-width:900px;max-height:none" class="image 1_1_landscape" title="Information on Product Classification in a Document" alt="Information on Product Classification in a Document" src="/service/media/GTS400_20_en-US_media/GTS400_20_en-US_images/Line_Item_Classification.png" tabindex="0"><div class="imageCaption"></div><p tabindex="0">If a product is classified as a dual-use item, the system tries to find a suitable license for the export of this product to the country of destination. If the search fails, the system preventively blocks the line item. This block can only be lifted by assigning a license.</p><p tabindex="0">As a rule, license determination is successful at the first attempt if a general export license, a license exception or a similar license type is available for the planned export. In contrast, individual licenses first have to be applied for, and it might take time for the authorities to issue them.</p><p tabindex="0">It therefore makes sense to schedule the <code>/SAPSLL/CUHD_MASS_REFRESH_EXIM</code> program for background execution at regular intervals. This program can also be started using the <i>Recheck Documents</i> app. The system repeats license determination for the selected documents and assigns new or changed licenses if possible.</p><p tabindex="0">Blocks can also be lifted by manual license assignment using the <i>Change Control Data for Documents</i> app. However, the manual assignment of licenses to blocked line items should remain the exception.</p><div class="note caution"><div class="noteTitle cautionTitle"><span class="noteIcon cautionIcon"><img title="Caution" src="/icons/caution.svg"></span><span class="noteTitleText">Caution</span></div><div class="noteBody">Using this app, factually inaccurate assignments are possible.</div></div></div>

Export of Dual-Use Items to Uncritical Countries

How to Export Dual-Use Items to Uncritical Countries

<div id="content"><p tabindex="0">As set out in the unit <cite>Explaining the Scope of Legal Control</cite>, legal control might be the appropriate application area to deal with sanctions if their legal bases provide for permissions to supply restricted goods to certain recipients.</p><p tabindex="0">Delivery Customizing for SAP GTS does not contain templates, however. The setup is therefore always customer-specific. In the learning system, legal regulations, numbering schemes and numbering scheme contents have been created to map some of the sanctions the EU has imposed on third countries.</p><p tabindex="0">The demonstration <cite>How to Export to Countries Under Embargo</cite> uses the example of the embargo against Iran. The legal regulation ZIREM combines Council Regulations (EU) 359/2011, 267/2012 and 2023/1529.</p><p tabindex="0">As Council Regulation (EU) 267/2012 establishes a ban on exports of goods listed in the Equipment, Software and Technology Annex to the Missile Technology Control Regime, configuration has to ensure that the system cannot determine a license for the export of such goods to Iran.</p><p tabindex="0">The approach chosen in the learning system is the definition of a license type without statuses with the description <cite>Export prohibited</cite>. Users will not be able to create a license for this license type but will know why their attempt failed.</p></div>

Export to Countries Under Embargo

How to Export to Countries Under Embargo

Configuring and Using Legal Control

Exporting Dual-Use Items

The first example is an export from the European Union to Switzerland. The Swiss customer ordered one pump GTS-P02 and ten ball bearings GTS-M0302. The sales order has been replicated in SAP GTS in the form of an export document. It can be displayed using the "Display Documents - Compliance Management" app. All three application areas within Compliance Management are used. However, this demonstration only looks at the results of legal control. The check log for both line items can be opened from the display of the export document or directly from the list of documents. The pump GTS-P02 is not a dual-use item. It has therefore been flagged accordingly for the list of dual-use items. For the purpose of reexport control based on the Export Administration Regulations, it has additionally been classified under the basket code EAR99. The system determined the legal regulations USREX and ZDUDE for legal control. They are applied in alphabetical order. Since the pump is not a dual-use item, the system did not carry out further checks based on the Dual-Use Regulation and the national export control legislation. In reexport control, the system used the most recent result of the reexport calculation for the pump. The value share of the only dual-use item of US origin in the actual sales price of the pump is 3.71%. This share is far below the de minimis threshold for uncritical countries. The pump is therefore not subject to the Export Administration Regulations. The ball bearing GTS-M0302 however is a dual-use item and it is procured from suppliers in the United States, amongst others. Based on legal regulation ZDUDE, the system determined a license type suitable for the export of this dual-use item to Switzerland. The first access to the determination procedure ZGTS1 resulted in the determination of the license type for Union general export licenses. Applying the three check objects of this license type, the system opted for Union general export license EU001. For the purpose of export and reexport control based on the Export Administration Regulations, the option "Control Without Inheritance" has been selected in the entries on the "Re-Export" tab in the product master data of the ball bearing. The ball bearing is therefore subject to the Export Administration Regulations regardless of its value. As a consequence, the system continued the check based on the legal regulation ZEAR to determine a suitable license type and, if possible, a suitable license. Exports and reexports of ball bearings classified under the ECCN 2A001 to Switzerland do not require a license unless they are used for missile technology. The system therefore determined license type ZNLR and a corresponding license representing the designation "No license required". In the second example, the same products have been ordered by a customer in Morocco. The results of legal control for the first line item are similar to the results in the first example. As the sales price of the pump is higher, the value share of the dual-use item is even less. The pump is therefore again not subject to the Export Administration Regulations. Unlike in the first example, none of the Union general export licenses are applicable to the export of the ball bearing GTS-M0302. The first attempt to determine a license type therefore failed. In the second attempt, however, the system determined a suitable national general export license. In reexport control for the ball bearing based on the legal regulation ZEAR, the system determined the license exception LVS. Just as a reminder, both license types use the low-value check in value update.

In the third example of this lesson, a customer in Iran has ordered one pump GTS-P01 and ten ball bearings GTS-M1301 from the German subsidiary of the model company. The pump GTS-P01 is not a dual-use item, but it is listed in Annex II to Council Regulation 267/2012, imposing sanctions against Iran. The export of items listed in this annex always require an individual export license. The ball bearing GTS-M1301, however, is a dual-use item and it is procured from suppliers in the United States. It has therefore been classified under the list of dual-use items and under the CCL. As ball bearings of this specification are listed also in the Equipment, Software and Technology Annex to the Missile Technology Control Regime, their export to Iran from the European Union is prohibited. Both line items of the export document for the sales order are blocked because of legal control, as expected. The check log for the pump GTS-P01 shows that the block is due to the sanctions against Iran represented by legal regulation ZIREM. The system determined a license type for individual export licenses, but such a license does not yet exist. The pump contains dual-use items of US origin. However, as the value share in the sales price of the pump is only 4.29%, the pump is not subject to the Export Administration Regulations. The line item for the ball-bearing GTS-M1301 is blocked for all three legal regulations. Based on the Dual-Use Regulation in combination with German export control legislation, the system determined a license type for individual export licenses, which again do not yet exist. License type determination for legal regulation ZIREM was also successful, but the license type ZEXPR actually represents an export ban. As this license type is just an empty shell, it is impossible to create a license for this license type. The system determines a similar license type in reexport control. According to part 746 of the Export Administration Regulations, a license might, if at all, only be granted "for transactions for humanitarian reasons or for the safety of civil aviation and safe operation of U.S. origin aircraft". None of these reasons applies to the planned sales of the ball bearing to Iran. A license for the export of the pump might be obtained in the near future, but the line item for the ball bearing remains blocked indefinitely to prevent the further processing of the corresponding sales order item in the feeder system.