Denied Party Screening FAQ

Denied Party Screening is the process of identifying whether or not any parties involved in a transaction can be found on watch lists maintained by multiple U.S. government and international agencies. It helps to ensure organizations are not conducting business with a debarred party—be it an individual or a business entity.

Depending on the methodology or screening solution used (e.g., Descartes Visual Compliance™), screening for denied parties can also help to ensure organizations are not unlawfully doing business with someone located in a sanctioned or embargoed country.

To get your sanctions compliance right, check out this resource with tips on how the best denied party screening software solutions are set up.

Yes, for all intents, when it comes to export, trade and financial compliance—with which businesses in both the U.S. and abroad have the obligation to comply—those commonly-used terms can be considered relatively interchangeable.

Other terms common in the export compliance industry include: debarred party screening, OFAC screening, watch list screening, sanctions screening, embargoed country screening, Sanctioned Party List Screening (SPL), and Specially Designated Nationals (SDN) and Blocked Persons screening.

However, while similar in nature, there are some differences, primarily in that some terms are associated with specific regulations:

Yes. There are a number of denied party lists of individuals, entities and countries that, for a variety of reasons, the U.S. Departments of State, Commerce and Treasury, and international governmental agencies, have placed restrictions upon conducting business. U.S. regulations generally apply to U.S. exporters, while international regulations may apply to U.S. and foreign exporters doing business in those respective jurisdictions. Screening watch lists against which organizations are expected to screen include:

If an organization conducts business with entities on these watch lists, they are risking an export violation that could result in fines and other penalties. By making sure that to avoid doing business with anyone on a government watch list, companies are helping to protect themselves against said fines, other criminal and civil penalties, denial of export privileges, and negative media coverage.

Yes. A number of companies have been fined for knowingly and unknowingly violating trade, export and financial compliance regulations. In 2018, 30 individuals and businesses were convicted; and $1,101,431,225 in fines, $9,642,496 in forfeitures, and 506 months of imprisonment were handed down by the Bureau of Industry and Security (BIS) alone. A list of recent OFAC actions can be found here.

Generally speaking, screening should be performed for every export or financial transaction, domestic and foreign. Ideally, screening should include every party involved in the transaction, including the final end user, and the chain of individuals and businesses in-between.

Screening should also be take place for any type of contact, including visitors, employees, business associates, re-sellers, etc.—though the lists screened may vary for each of these purposes. Countries where exports are destined should also be screened to ensure they are not currently facing sanctions or embargoes.

Yes. Every transaction facilitated in U.S. Dollars is processed through the U.S., and is therefore subject to OFAC regulations. Banks processing the transaction have an obligation to freeze funds from being transferred to sanctioned parties or face penalties themselves. To avoid this possibility, and a potential OFAC violation, screening is recommended.

International financial agencies also have their own lists, so screening can help avoid fines and other penalties from global regulatory and enforcement bodies.

This can vary from organization to organization. Some may choose to screen potential customers or vendors at first contact. Some screen again when orders or finances change hands, and repeat this process with each order up until the time an order is shipped. Other organizations have an automated rescreening system in place instead of rescreening manually. Visitors may be screened when they sign up for a tour, and again when they arrive.

What is really important about when screening takes place is that it should fit the regulatory goals or risk objectives, of the organization—ensuring that finances, technology, information, or goods are not transferred in violation of regulations.

Simply fill out our contact form or give us a call at 877-328-7866. We will spend a few minutes getting to know about more about your organization and the export compliance challenges you face. From there, we will recommend a solution to help meet those challenges head on—or even schedule a demo so you can see Visual Compliance in action.

Also check out these 6 key features to help you evaluate and select the best denied party screening solution for your business.

Descartes Visual Compliance screening solutions check for individuals and companies that are found on U.S. and international government watch lists, as well as countries facing sanctions or under embargo. Options include:

Descartes Visual Compliance solutions are affordable and modular, giving organizations the option to add solutions they need to get compliant right now, and the ability to add complementary solutions to bolster compliance should needs ever change.

Check out our Buyer’s Guide, which brings together everything you need to know about in order to start to transform your sanctions compliance program.

Contact us today to learn more about how one or more of our screening solutions can decrease reputational risk, increase productivity, and save any number of staff hours spent on screening for denied parties manually. Or request a quote, and get started today.

Yes. The United States is not the only country that maintains watch lists of denied and restricted parties, and sanctioned entities. Many countries maintain similar lists of their own—for instance, the Government of Canada’s Office of the Superintendent of Financial Institutions (OFSI)—as do international organizations like the United Nations and the World Bank.