Export Party Screening Procedure- What You Need To Know
The U.S. government prohibits all U.S. persons, U.S. based companies, organizations, individuals and educational institutions from involving in any sort of business with the individuals and entities, which are designated as the restricted, denied and/or prohibited. Government agencies publish several lists to cover those entities and individuals, including but not limited to BIS DPL, Entity List, Unverified List, OFAC’s Specially Designated and Blocked Persons list as well as others. These denied party lists are enforced by various United States government agencies that include Department of Commerce, Department of State, Department of Homeland Security, and Department of the Treasury and Federal Bureau of Investigation.
In addition, foreign government agencies generally publish certain lists of entities and organizations that are restricted for doing export business. In the event of export-import, if any individual, business entity or organization falls under the denied/restricted party lists, they will be no longer perform trading globally without the proper license. Export screening plays a very important role in the process of importing and exporting and maintaining compliance with export rules and regulations. Depending upon the list where the match was found, it will denote certain situations-
1. The presence of “red flag” in the process of transaction with the sanctioned entity
2. Country specific sanction warning
3. Specific license requirements for the process of export or to make the business complaint with sanctioned business entity
4. Following strict export prohibition.
The Screening Process –
Ensuring the customer or recipient of the export products, technical data, and software not listed in the restricted and sanctioned party lists increase problems of performing business across the international borders or even during disclosure of technical data and software to the foreign individuals. Export companies can minimize the risk o certain violations of the export compliance regulations by running the name of the business entities against the lists of denied or sanctioned parties. The practice of screening each of the business entities, end-users, customers and individuals are called “restricted party screening process.
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Who Are Required To Be Screened?
Depending on the best type of practice, most of the export organizations should at least screen the following entities.
1. Nations where the buyer, ultimate and intermediate consignee, end-users and customers. The nation screening process helps in finding out the harmful warnings and restrictions.
2. Banks and other related financial institutions.
3. Customers and consultants.
4. End-users, if they are different from the customers
5. Representatives and various agents
6. Suppliers and vendors
7. Recipients of software applications and technical data
8. Freight forwarders and new hires
With the help of effective Denied party screening, one could maintain total compliance with export rules and regulations. Business partners coming under the denied party list are not able to continue export without the proper export license.
