Transcript Control - EntryPoint Consulting

Export Licensing 2.0 – Beyond the Obvious
Robert Waldrop
Global Trade Practice Leader
EntryPoint Consulting
[ CHAVONE JACOBS
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[ ALLAN FISHER
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[ COREY PEARSON
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]
[ Learning Points

Unlike its competitor applications, GTS gives an
implementation team a great deal of flexibility on how license
determination is performed.

To help you manage this flexibility properly, in the next hour,
you’ll have the opportunity to learn:
1. Proposed best practices for deploying aspects of license
determination
2. Real-world experiences in deploying complex legal regulations
3. Review of license determination features and configuration
options in version 7.x.

We’ll accomplish this in a Q&A format.
Real Experience. Real Advantage.
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[ EntryPoint Global Trade Practice
1. Our consultants have deployed GTS at two dozen clients,
from version 1.0 to being a ramp-up partner for 8.0.
2. Beyond our GTS consultants, our practice has a team of trade
compliance specialists and provide multiple offerings around
GTS (managed services, test drives, performance/compliance
audits and subscription-based GTS hosting).
3. We use a unique deployment methodology built around GTS
best practices and our experience with past clients.
 Many of these best practices are sent out in our monthly
Tips n’ Tricks Newsletter. Give me your card to subscribe.
Real Experience. Real Advantage.
3
[ Should I set up the licensing legal regulations for all
countries in the same way?
Under the US EAR, all products are controlled. Under the
regulations of most other countries, only listed products are
controlled for export.
1. Every product relevant
a. Control on product, Control on License Determination
b. Control on product, No Control on License Determination
c. No Control on product
2. Specific products relevant
Decision should be based on maintenance effort, regulatory
compliance, business process impact and downstream reporting.
Real Experience. Real Advantage.
4
[ What are my options for controlling US re-export?
1. Implement GTS 8.0 and define US content for each product
(and product BOM).
2. Activate the EAR legal regulation for all countries you ship
from (use of no control on products).
3. Create re-export legal regulation and activate for all countries
besides the US.
a. Product-specific control
b. All products classified for US export get classified for US reexport (products originating at US operation)
c. Identify and classify products purchased independently by nonUS subsidiary.
Real Experience. Real Advantage.
5
[ Can I block a transaction with a missing harmonized
code (just like I do for a missing ECN?
Yes, there are three options for doing this:
1. Can catch in Customs Module on creation of Customs
Declaration.
2. Can select “import code” attribute and catch as part of
existing export license determination controls.
3. Can create a new license determination legal regulation.
Note: Can do options 2 & 3 also on import.
Real Experience. Real Advantage.
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[ Should I attempt to fully define export regulations
within GTS?
1. Maybe, but first be clear on the cost vs. benefit of doing this.
a. Value of thoroughness and strict adherence.
b. Value of simplicity
2. Keep in mind that anything left undefined will block, so no
compliance gaps.
3. The more you define, the more you must maintain. Just-incase design creates double effort
a. Initial deployment
b. Complete review when (and if) it’s first used
Real Experience. Real Advantage.
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[ What’s the best way to use country groups?
 Used to build license determination strategy, to activate legal
regulations and for defining destination on license
 For example, under the EAR, you have 11 country groups and
12 country chart groups (along with potential exclusion groups).
 Have option of using just one or two groups to satisfy most
licensing requirements. Make sure there’s a tangible value in
any additional complexity.
Real Experience. Real Advantage.
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[ When should I use Grouping and Peculiarity codes?
 Grouping allows many export control classes to be treated in
the same way, while peculiarity code allows a single export
control class to be treated in different ways.
 Grouping can greatly simplify the License Determination
Strategy.
 Peculiarity code can be use to control US and EU encryption
product exports.
 Controls review status for the US
 Controls encryption level for US and EU
Real Experience. Real Advantage.
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[
Is there a preferred way to use License Determination
Strategies?
 There are redundant controls between license master and
license determination strategy.
 Can apply two simple rules to help guide usage
 Rule #1: Strictly model each GTS license on the license
authority, as described in the regulations
 Rule #2: Avoid redundancy

Real Experience. Real Advantage.
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[
How do I control shipments that appear to be
domestic, but result in an export?
 Place end-user (or other partner besides ship-to) as first
partner.
 Can use for:




Ensure product is properly exported/transferred to end-user
APO/FPO addresses
Deemed exports
In-country transfers to foreign person
Real Experience. Real Advantage.
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[ My shipments rarely go directly from source to enduser. How do I ensure that I control the entire
movement?
 Select Multiple Country Group option on license master
 Will ensure product can move to and through every country
represented, not just the country of the ship-to (or whichever
partner is first on your Partner Function Group).
 Can’t use country group on license, you must list out the
countries.
 GTS 8.0 does expand on this with integration to TMS and control of
routing.
Real Experience. Real Advantage.
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[ How exactly does GTS deal with the export of US
military products?
 Product Classification
 USML category to indicate product subject to ITAR
 Coexists with ECCN classifications
 Setup up individual licenses and exemptions
 Control by document & product
 For exports and subsequent re-transfers
 Setup agreements
 At product, program or agreement level
 Can assign directly to transactions or as indirectly through
individual license
 Project and BOM-level control for ITAR part of GTS 8.0
Real Experience. Real Advantage.
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[ Should I be using the military/civilian use option on the
license type?
 Some license authorities require knowledge of entity type.
 Set on GTS business partner master (3 options) or pass through
from ERP customer master (2 options).
 Activate attribute on license type.
 Alternative would be to list permitted partners directly on
license.
 Less reliance on customer master maintenance process
 Simpler, more easily auditable process
 More data entry
Real Experience. Real Advantage.
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[ Key Learnings
 SAP applications provide incredible freedom and flexibility to
make good or bad choices in your design.
 GTS can represent the export regulations for every country in
the world.
 It may not be possible, feasible or valuable to exhaustively
transcribe export regulations into a GTS design.
 When no option appears clearly superior, lean towards the
simpler one.
Real Experience. Real Advantage.
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[ Any other questions?
Robert Waldrop
Practice Leader
Global Trade
4700 Rockside Road, Suite 625
Independence, OH, USA
44131-2152
+1.646.509.1199
[email protected]
www.entrypointconsulting.com
Real Experience. Real Advantage.
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[
]
 Thank you for participating.
Please remember to complete and return your
evaluation form following this session.
For ongoing education on this area of focus, visit the Year-Round
Community page at www.asug.com/yrc
[
Real Experience. Real Advantage.
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