SPL for Geniuses - DSAG · Real Experience. Real Advantage. [3 Learning Points 1. Get answers to...

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SHERRYANNE MEYER[ASUG INSTALLATION MEMBER MEMBER SINCE: 1999

STEVE RUGGIERO[ASUG INSTALLATION MEMBER MEMBER SINCE: 2000

ED HUDAK[ASUG INSTALLATION MEMBER MEMBER SINCE: 1998

SPL for Geniuses

Robert WaldropGlobal Trade Practice Leader

EntryPoint Consulting

Real Experience. Real Advantage.

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EntryPoint Global Trade Practice

Longest-standing SAP GTS Partner Practice in the US and leader in market share and client references, including the following 35 US, European and Asian GTS clients . . .

Goodrich, Avaya, Microsoft, Cooper Industries, Entegris, AkzoNobel Littelfuse, Nike, Perkin Elmer, Dow Corning, Fonterra, IFF, Grundfos McCormick, Bose, Danisco, Computer Associates, CommScope, Heat and Controls, Citrix, Henkel, WR Grace, Tellabs, Conoco Phillips Texas Instruments, Dow Chemical, Sun, Life Technologies, LSI, Medrad, NVIDIA, Rhodia, Tyson, Intel, Hughes Network Systems

Practice employs industry-trained GTS consultants, each with a minimum of five full GTS deployments, along with trade compliance specialists supporting clients’ trade operations.

Produce weekly GTS Tips ‘n Tricks newsletter. Ask me about subscribing.


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Learning Points

1. Get answers to the seven most important questions about how Sanctioned Party List (SPL) screening is used at your company.

2. Gain insight into understanding your company’s true level of reasonable care, information that could prove crucial if your company ever receives a customs audit.

3. Learn how some simple changes to your SPL design can truly turn your instance of GTS into a best-in-breed application for sanctioned party list screening.

Note: This is an expert-level presentation. Prior knowledge of this topic will be helpful in fully understanding the concepts.


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What is SPL?

There are lists of individuals, firms and other entities that are restricted by national and international law from engaging in certain types of commerce.

Sanctioned Party List (SPL) Screening is the service SAP GTS provides to ensure that a company is not conducting inappropriate business with a person or company on any of these Sanctioned Party Lists.

This can include customers (and their contact people), end-users, vendors, employees, visitors, and financial institutions.

Screening will be conducted against the above entities at both a master-data and transactional level.


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The most important questions about SPL

1. Which fields should I use for screening?

2. Which comparison direction is correct?

3. Do I have to screen against all Name and Street fields?

4. Do I need TREX?

5. Which words should I exclude from screening?

6. How can I reduce blocks caused by one-word SPL names?

7. What partners should I put on the positive list?


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1. Which fields should I use for screening? SPL does allow you to:

Select 1 or more fields to compare (e.g. name, street, city, country) Indicate whether each field will trigger a hit on its own (OR), or in

combination with other fields (AND).

SPL does not allow independent address matching to occur when combined with the name field in a single SPL process: SPL cannot represent the logic:

Name OR (Street AND City AND Region AND Country) True address matching cannot take place (i.e. Name match = NO,

Address match = YES)


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Combining name and address fields within a single match algorithm: Could produce unreasonable hits or misses Could produce hits and misses that are not fully understood by your

compliance team (who are more comfortable with thinking in terms of distinct Name and Address matching).


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1. Which fields should I use for screening? SPL will attempt to match address fields against the least-detailed address

record in the SPL entry About half of all SPL entries have one blank address record (either as

the only address record or one of many). For these records, having the Name field in your matching logic, will

cause all address fields to be ignored.


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If you don’t fully understand, you’ll not know . . .

That true address matching is not being performed You do not block business partners based on their address

matching that of a denied party.

Address fields may prevent blocks from occurring when you don’t want them to: Some exact name matches may not result in a block, due to

address field mismatches.

Address fields may not prevent blocks occurring in the way that is obvious Most SPL entries will ignore address fields Your hit rate is not being reduced as much as you believe


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If you do fully understand, you’ll be able to . . .

Defend your SPL design and processes in the case of a customs audit.

Simplify your SPL design to improve your level of compliance Remove the mixing of name & address fields Use of name-only (or name/country) matching recommended

by EntryPoint and MK Data.

Decide to introduce separate address-only SPL regulation. Attain true address screening Have system reflect the “reasonable care” levels of your

company’s trade compliance team.


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2. Which Comparison Direction is Correct?

Is the minimum word or phrase match percentage* calculated against the denied party or business partner.

Until recent versions of GTS, comparison direction could only be against the denied party. Words and phrases are both (typically) shorter on denied party. Matches are more likely and of lower quality. Iran Iranian (100%); David David Johnson Electronics (100%)

In current versions of GTS, direction can be changed GTS 7.1: partner comparison direction for word match. GTS7.2 (SP10): partner comparison direction for phrase match.

* Note that we use word % for what GTS calls search term (% of common letters for a word to match) and phrase % for what is called originating feature (% of common words for a phrase to match).


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2. Which Comparison Direction is Correct?

Recommendation to use business partner direction for word comparison: For all companies using GTS. Will remove occurrence of very short SPL word causing block against

much longer partner word (e.g. MAN blocking MANAGEMENT)

Recommendation to use business partner direction for phrase comparison: For companies that use Name (and Street, if used) fields ONLY for

capturing business partner name (or formal street address). Any superfluous information (e.g. Attn:, contact info) will cause true

matches to be missed (due to excessive number of words in the name or street fields).

For example, “Osama bin Laden, c/o Mailboxes Etc Waziristan” will not block against SPL entry “Osama bin Laden”.


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3. Do I have to screen against all Name and Street fields?GTS supports the screening of the five name fields and five street fields. By

default, it will include everything captured in these fields in SPL. It is recommended that you only screen those fields which hold the formal

name or street address of a partner.

For master data screening, you can exclude all name fields except Name1 and Name2 via configuration. Can suppress transfer/screening of other fields. Exclusion of Name2 would require custom coding

For transactional screening, you cannot exclude any of the Name or Street fields without custom coding (not an issue if manual name/address overrides are not permitted by company).

Based on company standards on how partner data is captured and the above configuration/customization, it could become feasible to use the business partner direction for phrase comparison (see question #2).


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4. Do I need TREX?

TREX is a free SAP search utility that improves the quality of SPL matching in GTS 7.2 & 8.0. It is the most significant improvement of SPL….ever.

Eliminates the “word within word” constraint. In order for two words to match, one must be found within the other

(default denied party found within partner) Iranian and Iraniam will never match Even though it’s a 96% word match, Forsvarsindustriorganisationex will

not match the SPL Forsvarsindustriorganisationen (true SPL entry).

TREX allows for a specific level of misspelling Missing letter (SORD vs. SWORD) Inverted letters (Society vs. Soceity) Additional letters (Laboratories vs. Laboratory)


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4. Do I need TREX?

Will reduce instances of short word matching long word beyond what is already done using comparison direction and minimum word match %.

Replaces need for vice-versa search strategy setting to eliminate constraint on compared word lengths (target longer than source).

Has appearance of increasing hit rate, but in reality is more likely to reduce the hit rate, due to: Ability for company to increase both word match % and phrase match

% due to higher assurance that truly similar words will match. Setting TREX sensitivity at a sufficiently high level will prevent truly

dissimilar words from matching.

TREX increases quality w/o increasing hit rate, permitting SPL screening to achieve a performance that is best in class.


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4. Do I need TREX?


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The only words that should be excluded from SPL screening are those that have no descriptive value.

Adding descriptive words will both increase compliance gaps & workload. Will cause misses of probable denied parties Will cause hits of obviously good business partners The fewer excluded words you have, the more compliant you will be

Never make a word excluded because it is the cause of frequent false-positive matches. It is a superficial, yet satisfying, way to eliminate a symptom of a poor SPL design.

The word Company is a good choice for an excluded word, as it adds no useful information to a partner name. The words Airline, Computers or David are dangerous choices for exclusion.


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5. Which words should I exclude from screening?List of most common words in the SPL . . .


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Effective, but safe, excluded words . . .


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6. How can I reduce blocks caused by one-word SPL names? Change your phrase comparison direction from denied party to

business partner (but only if you can satisfy the issues on questions # 3 and #4).

- OR -

Overwrite problematic one-word SPL words so they no longer block (could be as few as 5 or as many as 50). The blocks caused by any SPL name that will ALWAYS be immediately

released w/o research or escalation, provide no compliance value. Can manually change those causing the greatest number of blocks (e.g.

changing DAVID to XXXDAVID).

Overwrite will be removed if particular SPL entry is ever updated as part of delta screening process. As this would be infrequent, could simply re-update when noticed. Otherwise, could create simple exception report to send alert.


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7. What partners should be put on the Positive List

You should only use for US/NATO government entities, your company’s own global locations or internal partners.

Overuse of positive list will both increase compliance gaps & workload. Will require frequent manual screening of positive list Will be difficult to enforce consistent policy on when used.

Like the over-use of excluded words, the over-use of the positive list is a superficial, yet satisfying, way to eliminate a symptom of a poor SPL design.

Can eliminate repeated blocks against single business partner by: Ensuring your nightly “delta screening” only looks at most recent

updates. Setting GTS to not re-block a released partner


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] Thank you for participating.

Session 1310Robert Waldrop

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

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