What causes this issue?

The material does not exist in the material master. While you are
creating the material, you try to execute the basic material assignment.
You can only start this compliance activity after saving the new
material.

System Response

The system canceled the basic material assignment.

How to fix this error?

Finalize the creation process for the material master and restart the
basic material assignment.

Procedure for System Administrators

The system issues an error message and will not allow you to continue with this transaction until the error is resolved.

Error message extract from SAP system. Copyright SAP SE.