Automated Export Control at Roth Industries

Between numerous new customs agreements, more exports going through third countries, and increasingly complex regulations, the processing workload is constantly increasing, especially at larger mid-sized companies. To stay on top of the game, family-run company Roth Industries has reorganized its export controls.

A mid-sized company based in Dautphetal, Germany, Roth Industries maintains a worldwide presence with some 1,300 employees and 28 production and sales firms. In the past, export controls at Roth had been conducted almost as an afterthought – something that is no longer possible today. “The number of global exports is continuously rising, our commercial and direct customers in third-party countries are becoming increasingly important, and export control requirements are ever more complex. Depending on the export nation and item, export controls and careful reviews have to be something we’re thinking about,” says Roth Werke Customs & Exports Representative Ulrich Meyer regarding the challenges.

Looking for better export control solutions

According to Meyer, Roth’s expert on export regulations, “Every customs agreement is different. Managing preference clauses, supplier and origin declarations, and sanction list checks is more time consuming than ever, and violations are punished severely.” Employees were concerned about making mistakes, and the administrative work could only be accomplished with large numbers of personnel. In response, the company went looking for more effective export control solutions. 

The SAP ERP system has been a boon to many large companies. 

But Meyer found this solution too all-encompassing. He notes, “We were looking for an alternative for processing our foreign trade business that would reliably support us in electronic customs declarations (ATLAS) and the many export controls.”
Export control: Even mid-sized companies like Roth Industries have to precisely check whether products correspond with export regulations and customs provisions. This can no longer be done as a mere afterthought. (Photo: Roth Industries)

As Roth’s customs and export representative, Meyer was particularly impressed by the support provided by Mercoline’s solutions in checking national and international export provisions. Without automation, it’s difficult and expensive to check sanction and export control lists. Similar difficulties also apply for preference management, since supplier declarations must be obtained for all of the items that make up a product. And that’s to say nothing of preference calculations with countries that have customs agreements with the EU.

In describing his company’s experience with the foreign trade solution from Mercoline, Meyer says, “The new IT solution integrated into SAP is such a help. Export control and sanction list checks are combined from the offer all the way through to the invoice. And the ATLAS-based software also supports our employees with electronic customs declaration and clearance. The individual modules for SAP work well together. They’re directly integrated into SAP as add-ons. Mercoline also reacts quickly to recommendations for improvement.”

Significant time savings

The new solution got its start at subsidiary Roth Werke, located in Dautphetal-Buchenau. Some of the company’s products require export control; some are even dual-use items. Germany’s Federal Office for Economic Affairs and Export Control (BAFA) has established a wide range of laws and directives, both at the domestic and EU level. Foreign trade expert Meyer explains how the new process works in such cases: “Previously, items had to be checked and allocated corresponding codes in highly complex internal processes. Doing this correctly was extremely time consuming, because the rules are complicated and, in some cases, even interwoven. We had to conduct checks to determine whether items required permission or not. We sometimes had to do this even for a simple inquiry from a third-party country.”

In the past, some customer inquiries required employees to check whether restrictions applied based on the customs tariff number. The employee would have to observe several restrictions, study footnotes, compare articles, and, when necessary, submit an application to the BAFA ELAN-K2 application portal.

Order processing: The export of goods requires a wide range of export controls, sanction lists checks, and preference processing. Roth Industries has now automated this process.

The new M.SecureTrade Export Control IT support solution allows employees to enter the customs tariff number and immediately see whether or not the product is subject to export controls. The program automatically checks the articles against country embargo and export control goods lists when processing a customer inquiry. The comparison and check includes lists from Germany’s Federal Gazette (TarifeExport), national regulations like the Foreign Trade and Payments Act (AWG), the Foreign Trade and Payments Ordinance (AWV), and KWKG (War Weapons Control Act), along with European regulations such as dual-use directives and country embargos.

If the program registers an export control “hit”, processing automatically stops. An authorization regulation stipulates that only the export control representative can conduct any further processing. “I can immediately see if a message is required or if I can prepare a Whitelist entry for that country or group of countries. Future processing is then automatically classified as safe. I can also do customs coding now for shipping later. Compared to doing this manually, we’re lightening our workload significantly,” says Meyer in emphasizing the time savings. 

The program creates greater legal security

Roth’s sales items are allocated a customs tariff number, so the software can seamlessly document the export controls. Says Meyer, “Automated export control not only saves employees time, it also gives them greater security. And an additional module allows us to automate the management of supplier declarations as well. After conducting a customs inspection, we can present all of the verifications on a digital interface at the push of a button.” This only works, however, when the master data is organized in a highly systematic fashion – and this requires a high level of discipline.

Meyer also notes the benefits of having interlinked SAP add-ons for foreign trade solutions. “The export control transfers the data to ATLAS, and the orders are electronically transmitted to the customs authorities where they’re inspected and returned within minutes.”

Roth Industries is now introducing this foreign trade solution at other company locations in Germany. 

Roth Industries headquarters in Dautphetal. Following Roth Werke’s positive experience with Mercoline’s foreign trade solution, Roth Industries is now introducing it at more of the company’s locations. (Photo: Roth Industries)

About Roth Industries

Roth Industries is a mid-sized, family-run company from Dautphetal, Germany specializing in building and industrial solutions. The building solutions branch includes the company divisions responsible for energy systems, sanitary systems, and environmental systems. Roth’s industrial solutions branch is made up of the composites, plastics, and hydraulics divisions.

Roth Industries maintains a worldwide presence with some 1,300 employees and 28 production and sales firms. The Roth family owns 100% of the company’s holdings.