Organizations can diminish the risk of violation of the export control regulations by running the name of persons and entities against the government issued denied and sanctioned party lists and identifying the possible name matches prior to an export or a business activity with foreign entities. This practice is commonly called as the Denied or restricted party screening process.
What Lists to be Used for Screening?
It is generally assumed that U.S. Department of Commerce issued lists are the only lists that need to be used to screen a trade partner. The truth is that those are only some of the lists that require attention. It is recommended that a risk analysis should be done to determine which lists are needed to be used. Type of the business transactions and geographical factors would impose consideration of several other lists. For instance, an organization exporting to or doing business in another country should likely include the denied party lists that are issued by that country’s respective agencies. Companies that are involved in specific business activities, such as government contracts, healthcare or financial activities, should also use the lists that are issued by the agency regulating those transactions.
Who Needs to be Screened?
Based on the best practices, organizations should at minimum screen the following entities. It is also recommended to periodically revise this list to add other business partners;
- Countries where buyer, intermediate consignee, ultimate consignee and end-user are located. Country screening helps to identify potential warnings, restrictions and/or embargoes.
- Intermediate and Ultimate Consignees, if different than customers
- End-users, if different than customers
- Pay-to and Pay-from parties in transactions
- Suppliers and vendors
- Service providers
- New hires & Employees
- Contractors & Subcontractors
- Representatives & agents
- Visitors and their employers
- Recipients of software & technical data
- Freight forwarders
- Customs Brokers
- Banks and other financial institutions
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