Product Demo Request A Product Demo Why Businesses Need Denied Party Screening
- Written by OCR
- February 10, 2022
Our world has constantly evolving security concerns and complex geopolitics. Governments and companies rely on denied-party lists to legally navigate through global trade. Denied-party lists are indexes of entities that should not be accepted as a party in certain or all business transitions.
These lists are extensively used by government agencies to enforce sanctions and embargoes, to protect their economy, to combat the empowerment of their enemies, and to ensure public health and safety. They can range from lists of disbarred individuals or organizations who can no longer participate in business transactions (purchasing, acquiring, or delivering a good or service) to lists of countries that cannot import goods. Moreover, restrictions can span multiple verticals and industries, including; pharmaceutical, manufacturing, government contracting, technology, commercial, government, and private sectors.
Any business participating in international transactions or exports is held responsible for adhering to the limitations imposed by these lists. It is, therefore, in every company’s interests to understand what they are and how to adhere to them.
In this article, we will explain:
Both terms refer to a collection of entities, either individuals or organizations, that are deemed unlawful to do business with to some extent or completely.
Denied Party Lists are compiled by international governments and International organizations, such as:
Entities are added to a denied party list because of:
There are more than 1,300 such lists an international business must take into account. Every individual and company, small and large, is responsible for adhering to these prohibitions.
Many individuals and businesses are prosecuted for breaches of denied-service lists every year.
Every list and associated law has different penalties that can be levied against violators. The following are two examples:
The U.S. Bureau of Industry and Security maintains several denied and restricted party lists. Not adhering to their restrictions will result in heavy penalties:
The Arms Export Controls Act (AECA) and the International Traffic in Arms Regulations (ITAR) are laws that limit what can be exported, rather than to whom. These two laws place restrictions on weapons, armaments, and defense systems. Refusing to abide by them will also result in heavy penalties:
Voluntary self-reporting done in the proper way can mitigate these penalties, but obviously, the ideal situation is to avoid breaches altogether by carefully screening any business transactions beforehand.
With so many different lists and such high penalties, it is vitally important for a business to make sure they adhere to these sanctions, but scanning through the lists manually for every transaction would be a fool’s errand.
The restricted-party screening process provides corporations with the ability to check all individuals, businesses, and countries against the most current restricted, denied, or prohibited party lists to ensure no business transactions occur with an entity that is prohibited by law.
Sanctioned party list screening provides an easy solution to otherwise daunting challenges.
The solution is restricted party screening software, such as what is offered by OCR Services Inc.. To learn more about OCR’s Watch list Screening Solution, trusted by hundreds of organizations globally, please reach out to us at [email protected].
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