The Dangers of Ignoring Restricted Party Screening

The Dangers of Ignoring Restricted Party Screening

A post-9/11 world has brought a host of new regulations and procedures touching virtually every area of business and commerce, not to mention our daily lives.  A couple of significant examples — the United States created the Transportation Security Administration (TSA) and the Department of Homeland Security (DHS), which has grown to be the U.S. government’s third-largest department, responsible for anti-terrorism, national security, and disaster prevention.  We don’t think twice about those organizations today, but neither existed before late 2001.

Worldwide, new government entities charged with creating stronger regulations to increase security and safety means new challenges for people working in global trade management.  One especially challenging area is Restricted Party Screening or RPS.  While not new, RPS has taken on even greater importance in recent years as the U.S. government, for example, restricts or prohibits companies from exporting products and services to any party on its export-denial and blocked-persons lists.  RPS involves a review of all these lists and many more. Running afoul of RPS regulations is not a minor incident.  Companies that fail to comply can lose their export privileges, be terminated from federal programs, and face criminal prosecution that includes jail time. 

Now take RPS to a global scale, not just the United States.  There are hundreds of restricted party lists that collectively create a massive headache and potential compliance nightmare for exporters. Being compliant with restricted party regulations globally is a significant challenge for global businesses. Exporters are responsible for ensuring that they are compliant with government regulations and that their goods are not being sold to individuals or entities on banned lists.

How difficult is this?  Let’s just name a few challenges an exporter needs to watch out for.  These include such diverse areas as storing and linking information for all business partners; screening for blocked persons when determining whether an entity is sanctioned in accordance with OFAC’s 50 Percent Rule; determining if a partner is on a denied persons or illegal trans-shipper list; determining if a destination country is subject to embargoes; keeping current with continually changing lists from around the world, and managing the hold-and-resolution process efficiently so shipments are not delayed.

Not easy.  That’s why any RPS solution needs to incorporate the following capabilities at a minimum:

  1. Expands your screening scope with additional sanctioned party lists
  2. Fully automates the screening process
  3. Supports multiple integration methods
  4. Uses advanced word matching technologies with extremely high accuracy rates
  5. Uses an on-demand solution
  6. Manages your resolution process with workflow and escalations

E2open’s export solutions provide a secure, comprehensive, and highly reliable method to automate the RPS process, with daily updates keeping you 100% current with changing global lists.  This enables exporters to quickly screen trade partners against more than 600 restricted party lists from government institutions worldwide.

Companies including Belkin, Monsanto, and Tyco Integrated Security are benefiting from E2open’s RPS solution.  Another company, PEI-Genesis — a distributor and engineering design firm — was able to meet its RPS requirements and streamline order processing while integrating a fully automated, repeatable, accurate and auditable RPS process. Intelsat, the global telecommunications satellite company, was able to fully automate what had been a manual, time-consuming task, eliminating potential fines or penalties that might have resulted from trading with denied parties. Diverse companies, diverse industries, all benefiting from the same RPS solution.

Contact us if you’re interested in hearing more about RPS and how it can help you manage the risks posed to your operations and your brand by evolving trade compliance across the globe.

More in Global Trade and Logistics

2019-12-26T14:54:07-06:00

About the Author:

Arne Mielken
Arne is a Senior Global Trade & Customs Manager at E2open. He is responsible for providing customer insights on the value of E2open’s Global Trade intelligent applications and helps promote E2open’s next-generation digital supply chain platform. Arne joined E2open with the 2019 acquisition of Amber Road. He has over 15 years of experience in customs & global trade, import, export, and duty management. In his previous role with Grant Thornton and Deloitte, he assisted clients with the management of import and export procedures, customs regimes, and duties to maximize cost-savings opportunities and enhance customs compliance. He holds an Executive Master of Business Administration from Smartly Business School (US) and a BA (Hons) in International Business and Modern Languages (French & Spanish) from London South Bank University (UK), a diploma in World Customs Compliance and Regulations from The Institute of Export and International Trade (IOE&IT), where he serves Young President of the IOE&IT. He is also a Certified Classification Specialist™.
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