Denied parties screening, also known as watch list screening, is an essential process for organizations involved in export compliance. This screening is an important consideration when implementing and evaluating an export compliance program.
The United States Government maintains restrictions on certain exports, reexports, or transfers of items implemented through sanctions, embargoes, and denial orders on a multitude of lists that include companies and individuals. U.S. Companies can be fined and in certain cases face criminal charges for violating the regulations by conducting business with these companies and individuals. Denied Parties Screening prevents these parties from accessing items, articles, or technology regulated by U.S. export regulations.
Denied Parties Lists
Denied parties lists are maintained by the Bureau of Industry and Security (BIS), the Directorate of Defense Controls (DDTC), the Department of State, and the Department of Treasury. These lists are comprised of individuals and entities that the U.S. forbids business transactions through embargoes or sanctions. These lists can be searched in the Consolidated Screening List (CSL). If a party is found on this list it is the responsibility of the organization to exercise due diligence before proceeding.
The CSL has a fuzzy name search that perform searches when the exact spelling of an entity’s name is not known. This function can be especially useful when searches are performed for names that come from non-Latin alphabet languages.
Who Should Be Screened
Screening should be performed on visitors, employees, vendors, and customers. Any employee or prospective employee should be screened before being hired. Screening should be performed for all employees at least annually.
Visitors should be screened before they are allowed entry into the facility. When performing this screening it is important to screen both the visitors and the company or companies they are affiliated with.
Potential customers should be screened prior to issuing a quote for products or services. Should any screening, or subsequent review of screening results, indicate that a party in question is matched on one or more of the denied parties’ lists, this company must cease all involvement with the party. This finding must be immediately reported to the E.C.O. so that a determination for a false positive can be made.
Records should be kept of all screened parties. These records should include rationales for acceptance when false positive matches have been determined.
Screening Options
Private vendors supply restricted party screening solutions that are affordable and modular. These solutions provide more thorough searches and are interfaceable to company databases of persons and entities. They can therefore provide automatic alerts to users on changes in status of already screened entities.
Conclusions
Denied parties screening is an essential part of an effective export compliance program in the prevention of violations. Failure to comply with regulations can result in criminal prosecution including imprisonment and fines. It can also result in civil penalties and disbarment from export activities.
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