Maintaining Nomenclatures for Trade Compliance

Objective

After completing this lesson, you will be able to Maintain nomenclatures for trade compliance.

Dual-Use Items

The term dual-use item applies to goods with a primarily civil function that can also be used for military purposes. With Regulation (EU) No. 2021/821 ("Dual-Use Regulation"), the EU instituted an export control system for these types of goods. The main goal was to ensure that the Member States adhered to international arms non-proliferation treaties (Wassenaar Arrangement, Chemical Weapons Convention). This has heavily restricted the export of armaments and dual-use items. The United States established similar measures in EAR on the basis of the same conventions.

Annex I of the Dual-Use Regulation forms the EU's list of dual-use items. As a rule, a license is required to export any item on this list. If none of the EU’s general licenses ("general authorizations" in the wording of the regulation) applies, national export control authorities are responsible for issuing export licenses.

In the United States, the Commerce Control List (CCL) performs a comparable function. If required, export licenses are issued upon application by the Bureau of Industry and Security (BIS) of the U.S. Department of Commerce. This authority also provides binding information about classifying specific goods.

Lists of Goods

If you want to use the legal control for exports, you need to classify all products affected by the control measures in accordance with the corresponding list of goods. On the one hand, this classification is a prerequisite for a product-related document check. On the other hand, it is required for managing export licenses in the SAP GTS system.

The list of dual-use items in Annex I of the Dual-Use Regulation consists of subgroups that are classified with alphanumerical character combinations. Thus, codes 3A to 3E stand for "general electronics", and 4A to 4E for "computers". The first digit indicates the category and the second digit indicates the class of the listed items. This coding is specified in the Wassenaar Arrangement. The first two digits of the items are therefore identical in all states signatory to the Wassenaar Arrangement. The actual items are assigned five-digit keys and are defined in more detail in the national lists of goods. There may therefore be national differences for the last three digits.

Goods list items must be defined in the SAP GTS system before they can be assigned at product master level. You can create goods list items manually using the Manage Control Classes app. Some data providers sell entire lists of goods for upload into your SAP GTS system. To upload a list, use the Upload Control Classes app. You can find both apps in the Product & Classification space on the Master Data - Classification page.

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