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Trade Compliance Failure – Prepare For These Serious Outcomes

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By Author: Fred Danny
Total Articles: 39
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Failing to comply with the existing US trade regulations could cost heavily.

Want to know what it’s like?

Let us give a brief idea.

Criminal & Administrative Penalties. The website of the Bureau of Industry and Security (BIS) highlights the Export Administration Act of 1979 that states about penalization for export violations. It notifies that a violator can be penalized up to $1 Million and 20 years of rigorous imprisonment per violation. For example, a CEO of metallurgy company was penalized with 57 months of imprisonment for exporting specialized US technology to an Iranian company.

Denial of export privileges.
An administrative action may be taken against a company or organization for violating the EAA, EAR (Export Administrative Regulation), or any order/license/authorization as well as flouting any regulation under International Emergency Economic Powers Act (IEEPA) and Internal Security Act 1950, and so on.

Damage to business reputation. A business develops or establishes itself eventually, after inception in the industry. Meanwhile, it also builds a face value and goodwill among consumers, trade partners, and the rest. However, failing to comply with the trade regulations severely damages their reputation. The incurring losses due to an unprecedented damage to reputation don’t augur well for its future.

Frankly, it’s no fear-mongering, if you think so. The statistics of trade compliance have been pleasing due to the voluntary steps that were taken by the industry leaders and exporters community. It is exercised with a clear purview of national security and the country’s interests.

The government recommends a denied party screening for identifying the trade partners, parties, companies, proprietors, etc. who are dealing with dubious activities. Those organizations could also be indulging in illegal transactions, terrorism, and several acts of treachery against the state.

How has watch list screening software benefited organizations?

Some people misconstrue the meaning of “screening” for ulterior reasons. However, falsifying or presenting an inaccurate account of a corrective step/action doesn’t change the truth.

As we have highlighted it before, violators have a rare chance to redeem their pristine status of an honest and compliant exporter. To prevent your brand name from any damages, you may be well-equipped with the effective tools and technologies.

Indeed, the technology we are talking about is a restricted party screening software that evaluates a trade partner’s record against denied party lists, OFAC, BIS, and several national and international lists of banned entities.

The features you should be looking into:

Quick search options. Having a software tool helps you find across the lists in a quick fashion. If the tool doesn’t enable such feature, then you will have to wait for a long period, which would further cause a delay in sealing a transaction or deal.

Bulk search facility. Generally, the algorithm scourges all the denied party lists for a particular name/record and it would take considerable time. Nevertheless, some software vendors offer a tool with bulk search facility for such searches.

Seamless integration. First and foremost thing, a tool is not worth it if it isn’t compatible with your existing business software for full end-use. We have delayed it, but you should check for this at first.

Author Information:-

Fred Danny has written several articles about the denied party screening software and trade compliance solutions. He highlights about Watch List Screening controls and cloud-based solutions for small and mid-sized businesses. He also explains why restricted party screening software is an evident requirement.

More About the Author

linqs software helps you with an accurate KYC screening of customers or trading partners before entering a deal with them.

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