What you need to know to stay compliant with restricted party screening.

Restricted party screening, denied party screening, watch list screening—no matter what you name it, screening is an essential part of any compliance program and security process. Not only will adding restricted screening prevent potential fines, loss of IP, and poor PR that can come as a result of a violation, your organization’s bottom line and reputation will thank you for having a solid screening program in place. Check out some of the best ways to help improve your restricted party screening compliance.

Who should be screened and who should do the screening?

The answer is simple and comes in two parts. Everyone with whom an organization does business should be screened, from visitors and vendors, to contractors and contingent workers. Even if you are not directly trading products or goods, a payment may be processed through a US bank or in USD. This then makes screening individuals especially important because these transactions fall under the jurisdiction of the US Department of the Treasury’s Office of Foreign Assets Control (OFAC). In 2020 alone, the OFAC has levied over $22,813,480 in penalties, compared to just over $71M total in 2018 and it’s clear that OFAC is casting a wider net than in years past.

As to who should be screening, that’s up to you and your organizational needs. To fully utilize restricted party screenings, everyone within your organization who interacts with a potential client, existing or repeat customer, contractor, vendor, and visitor, should be screening these contacts. Ideally there should also be a record that demonstrates this screening took place, whether or not they were allowed inside, and that they are safe to do business with for future visits.

What should you be screening for?

Denied party and restricted party watch lists are constantly in flux, and maintaining constant screening is the best way to ensure you have the most up-to-date and secure information. For any product or good destined for export, the individual should be screened. And, for optimized compliance, measures taken to ensure the purchaser is also the end user. As noted above, there are also OFAC considerations to take into account with regards to transacting in USD or processing through US financial institutions.

When should you screen for restricted parties?

Ideally, screening for restricted or denied parties should take place at multiple points in the sales cycle, or throughout an ongoing business relationship. Along with the typical department tasked with doing the screening for their respective areas, the below includes, but is not limited to:

• Upon first meeting a contact (Sales meeting)
• When point of contact or sale is first made (eCommerce, Sales)
• When payment is processed (Accounts Payable)
• When the order is about to be shipped (Logistics, Warehouse)
• When an order is placed with a vendor/supplier (Procurement)
• When a contract is about to be signed (Legal)
• During a planned or impromptu arrival of a visitor (Security, Reception Admin)
• When a repeat customer places an order (Sales, Customer Service)
• Or anytime finances are about to change hands (potentially all the above)

Where do you screen?

To cast the widest compliance net as possible, screening should take place at the onset of a transaction (or even before pursuing the sale), and then again at various points throughout the business relationship. This is mainly due to the frequency in which watch lists change—often daily. For example, someone may purchase from you today, and by the time the item is ready to be shipped, they may have been placed on a denied party watch list. Likewise, sanctions and embargoes are constantly in flux, so there are also potential export license considerations to account for.

How do you perform a restricted party screening?

As to how denied party screening is performed, that is up to you. Smaller organizations may only screen a few times a week, whereas larger companies may see hundreds of scans. Because multiple mandatory lists must be used, they all need a robust denied party screening tool like FedCheck.

Any company size would greatly benefit from a more robust, restricted party screening tool that instantly scans for required information. FedCheck’s algorithms instantly translates complicated raw data returns into clean, concise, and easy-to-read sirens. With the ability to toggle on/off any sirens you can easily and instantly see if someone is a restricted party, has a violent past, is a wanted person, or is on a terrorist watchlist.

This helps free up staff hours by eliminating an additional manual step in the sales process and redirects them to other core areas of the business. Another time-saving option is utilizing every record previously entered on a daily, weekly, or monthly basis. This helps remove the risk that existing records haven’t fallen through the cracks as you’ll be notified if one of FedCheck’s sirens occurs. Additionally, pre-screening records helps to maintain up-to-date information to ensure no individuals or entities were not screened in the interim.

There is no “one size fits all” when it comes to screening for denied and restricted parties. Whether pre-screening or integrated into your current operation, restricted party screening solutions can help keep you compliant and secure—it’s as simple as that.

FedCheck is designed to easily fit into your current security process and searches for restricted parties.