Why Ignoring Denied Party Screening Can Be Dangerous?

By Author: Linqs Inc
Total Articles: 59
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Compliance and restricted party screening have been forced into the limelight as the exponential development of eCommerce and cross-border commerce shows no signs of decline. With continuously shifting international sanctions rules hitting unwary firms in unwanted ways, the age of the mega fine has here. Non-compliance can result in large fines – multimillions of dollars in extreme cases. The termination of export permits, and criminal prosecutions, including jail sentences.

Do you truly know with whom you're doing business? Customers, partners, and suppliers should all be screened. Screening for Prohibited and Restricted Parties should be an important aspect of any business's governance, risk, and compliance strategy to guarantee that items are not headed for an individual, corporation, or entity that appears on any of the hundreds of distinct denied parties lists. Compliance is your duty, and due diligence is essential.

Denied Party Screening Lists & Validation Process -

A Denied Party is an individual, corporation, or institution whose right to trade has been restricted or prohibited by government ...
... authorities. This is frequently related to some form of criminal behaviour. Terrorism, organised crime, weapons or drug trafficking, people trafficking, and other obvious prohibited organisations exist. Restricted Party, Denial Lists, Specially Designated Nationals, Trade Party Screening, and other names have been used to describe denied party lists.

Across the world, government agencies as well as international organisations like the United Nations, publish names of people, businesses, and entities that are prohibited from doing business with them. These entities are called the denied party lists.

Denied Party screening is a validation procedure that involves comparing persons, businesses, or entities on a sanctioned list or watch list to any of the hundreds of distinct Denied Parties lists to verify that you are not involved in transactions with any possible Denied Party.

Validation Process -

Watch list screening indicates due precautions and is part of your diligence to meet with government and agency regulations across the world. If an individual, corporation, or organisation on one of these lists looks to be a prospective buyer or seller of products, more due diligence is necessary before progressing.

A match would often imply one of the following circumstances, depending on which list the match was discovered on:

Export restrictions are in place.
A need for a certain licence
In respect to the transaction, this might be a red flag.

Screening is a must for all firms. There is a duty to verify that items are not headed for an individual, corporation, or organisation on a government watch list every moment money changes hands. Many businesses believe that the shipping or freight forwarding firm has the responsibility for compliance, but this is not the case. Customers, vendors, and even third-party service providers must all be known to you.

Exporting To Countries That Are Subject To Penalties -

Individuals, organisations, and corporations have been prohibited from entering virtually every nation on every continent. Companies are at danger of interacting with a denied or restricted person, firm, or organisation regardless of where they export to, given the ever-changing nature of international sanction rules and policies, especially in the present political context.

Conclusion -

Denied Party screening isn't a precise science, and it's influenced by a variety of circumstances. Names, like addresses to persons or businesses, are not unique.

Author Info:-

Linqsdata can assist you in streamlining your screening process. LInqsgroup’s Denied Party screening software is accessed through our API service and offers real-time, up-to-date information for comparison against Denied Parties lists, ensuring that your company is aware and comply with worldwide regulations.

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