Denied Party Detection: 7 Things to Know About Regulations
Don’t go frank. Don’t invite laziness. Just follow the rules!
Over time, much has been made of the denied parties list and such. Even so, the awareness campaign is still short in some areas. When companies run out of information on rules and regulations, there is no stopping in the face of disaster. Furthermore, catastrophic damages are sustainable in nature, especially with regards to reputation.
As an exporter, you should be aware of how the US government prohibits dealing with unscrupulous or undesirable entities on federal denied party lists. Although OFAC has the central repository for these lists managed by various government agencies, it is difficult to accumulate general information at the same time. Furthermore, the selection of denied parties is not limited to just the BIS and OFAC lists.
Below, you’ll learn about certain facts that you can’t afford to be impervious to. Read to know more.
1. Guidance from government departments. Being punctual is a must. Since technology is always on the edge, there is no way to go back to the slower methods. You can register online to browse the BIS website and extract vital information. The US Department of Commerce and Treasury provides guidance on the selection of restricted parties and related details.
2. Steps to deal with business partners. You could be doing business with anyone, either an individual or a company. However, you simply cannot show suspicion to everyone. It’s much easier to follow a standard procedure with a “Know Your Consumer” assessment. Prevents you from transacting with the denied entities.
3. Red flag indications. Are you aware that your partner might be doing illegal business? In fact, several exporters have paid hefty fines for failing to comply with US export regulations for this. If there are red flags on a party, follow the procedures for a proposed transaction. If you are in doubt, refrain from dealing with them.
4. International list of denied parties. Not just the US government, there are party deny lists from various countries. You will be able to refresh your knowledge about international treaties and conventions in this regard. Put your first priority on updating the information.
5. Confidential communication with the BIS. The Bureau of Industry and Security allows you to communicate any information about a possible illegal transaction in a highly confidential manner. Please contact the BIS Export Control Office for the same.
6. Denied Party Detection Software. Several software companies have developed screening software for companies to test their trading partners. You can pull references from these and search for a solution yourself.
7. Cloud-based detection system. Small exporters have faced financial problems to install a high-end software system for watch list verification of trading parties. This is the main reason why cloud based solutions were innovated and provided to empower exporters. It is reasonable and fast.
While browsing the internet, you may also come across real life cases related to US export regulations and sanctions confusion.