How Positive Is Denied Party Screening For Exporters

By Author: Linqs Inc
Total Articles: 59
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Some would even faint after hearing about the loss of reputation.

The compliance measures for export, trade, and finance obligate businesses in the USA and abroad to comply. Not doing so wouldn’t leave any ideal situation at disposal. If at all exporters, businesses, and financial institutions knew the outcomes of not complying with the ever-changing rules and regulations, some adversities could have been avoided.

Screening of the partners has become an evident process in organizations. The export compliance industry uses several interchangeable phrases – denied party screening, barred party screening, sanctions screening, OFAC screening, and more. But before that, we should give a small account of denied party screening and similar processes.

Denied party screening is the process of identifying parties are involved in transactions that are under watch list of the US and various countries. The core application – it prevents any business from trade with a denied/barred party, i.e. an individual or group of people or business.

Some exporters think of it as an obstruction in regular trade practices. ...
... However, not all of them share the same idea, but are definitely irked by the restrictions. In certain circumstances, businesses can participate in trade with barred parties. These barred parties shouldn’t be able to re-export the items, which is an export violation. Thus, first party businesses should provide an End User statement.

Meanwhile, the restricted party screening evaluates those who are partially or fully restricted for export transactions. Some examples have highlighted a few items are not allowed to trade. Similarly, a few items would require the EAR license for conducting business. Sometimes, the moniker “blocked party” is also used for these entities. Items are subject to EAR or Export Administration Regulations.

Is it helpful for exporters? Is the answer is “yes,” then how?

The queries come through various social forums, online websites, commentary sections, social media platforms. The exporter community had voluntarily welcomed the implementation of restrictions for export due to the evident threat of terrorism, money laundering, and similar criminal activities.

It has been helpful, yes, in several ways. If exporters can retrace their steps from committing a violation from the regulatory compliance’s perspective, then it is willfully a positive step. Also, the watch list screening prevents a variety of “consequences” due to export violations.

Potential fines. Exporters or organizations may incur civil and criminal administrative penalties that may vary between $50000 to $5mn. Some of the punishments also include rigorous imprisonment for violators.

Negative media coverage. The media goes frenzy when any negative news comes out regarding a company/organization. There’s least to say that media trial has led several organizations to lose their highly decked reputation.

Loss of export privileges. This could instantly hurt the business and cause financial implications for an exporter. Loss of export privileges is one of the potential pitfalls that an exporter can experience if found violating the regulations.

Fortunately, trade compliance consultants are being hired these days to prevent such mishaps. Small businesses can prevent trouble with the installation of screening software via cloud arrangement.

Author Resource Box:-

Linqs Inc writes about the importance of watch list screening and emphasizes it being a part of the export compliance program. He highlights how the denied party screening method has helped organizations prevent export violations. Moreover, exporters can prevent loss of reputation by using a Restricted party screening process.

Linqs software helps you with Anti Money Laundering (AML) and KYC screening of customers or trading partners before entering a deal with them.