Understanding Product Classification: Simplifying Export Compliance for Engineers and Compliance Officers

Use case

The day begins.

You’re an engineer, and you’ve just opened an email asking you to produce a product classification for the latest technology you’re working on. As you sip your coffee, you’re thinking: “Why do I have to do this?” or “We have an export compliance officer for this!”

Here’s why.

In the dynamic world of international trade, selling advanced technology and components often comes with various regulatory complexities. To ensure that sensitive technologies do not fall into the wrong hands, governments worldwide have established stringent export control regulations. In Europe, companies must consider whether their products are military, torture goods, or dual-use technologies. In this article, we delve into a real-world use case highlighting the critical collaboration between engineers and export compliance officers in determining product classifications, an essential step in complying with these regulations.

Consider the scenario of the development of an aerospace component by a dedicated team of engineers. This component boasts advanced technology and exceptional capabilities, making it attractive to domestic and international customers. However, it also raises questions about export control classification, as its specifications hint at potential dual-use applications.

As an engineer on the team, you have in-depth knowledge of the product’s technical specifications, design schematics, and intended use; hence, you are asked to provide a thorough technical analysis of the component in terms of material composition, detailed functionality, specifications, tolerances, and capabilities, and an evaluation of any potential military or dual-use applications. This is a pivotal role in the initial assessment.

In this setting, the Compliance Officer is there to guide the process. Ideally, the engineer collaborates closely with the export compliance officer, who possesses a deep understanding of export control regulations, including the EU TARIC system, the distinction between CN and HS numbers, regulations restricting Military and Dual-Use goods, relevant sanctions and embargoes, and likely US export control regulations, including ITAR and EAR. With your help, the compliance officer gains an understanding of the technical aspects and intended use of the component and can conduct an initial assessment based on their knowledge of export control regulations. Through that collaboration, the pair consider every facet of the product’s design and functionality, including the materials used, the technical specifications, the component’s role within the broader system, and any unique features that may raise concerns.

Your next thought is likely: “This will take forever.”

Yes, it usually does.

Time pressure

That’s why RespectUs built its online export control compliance platform to make export compliance easy. The platform is a one-stop-shop for managing your export control compliance activity, and its Product Classification module allows you to manage your product classifications and reduce the time involved in assessing your product dramatically by providing all the necessary and up-to-date information in one place.

On the platform, you can enter the details of your product(s), upload relevant documentation, determine your CN/HS number(s) using our keyword/number search tool, and have our system provide applicable Dual-Use codes that correlate with your product. You can also use our Dual-Use search tool to find other codes that might apply to your product, and you are provided with relevant Defence-Related and Torture Goods lists that might apply. You can also include the persons involved in producing the assessment and make the file available to colleagues for easy collaboration. At the end of the product classification, the Summary page will display the relevant sections that have been answered, their completion stage, and, most importantly, if any military, torture goods, or dual-use restrictions are applicable. They can also be updated and modified later as the product develops.

This tool makes it easy for you to answer all of the relevant questions related to your product and for the compliance officer to be aware of the latest requirements about your product. And it helps both of you get it done much faster.

You can go back to enjoying that coffee now.

You’re welcome.

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