Trade Compliance 101

Five Tips For Organizations Looking To Get Started With Export Compliance And Denied Party Screening

The task of setting up an export compliance and denied party screening process from scratch can seem daunting—but it doesn’t have to be.

Compliance with U.S. and international trade laws and regulations is non-negotiable. If you frequent the Export Compliance Journal, you don’t need to be told just how important compliance can be. And the first step in that compliance, for most organizations, is  usually restricted and denied party screening.

For many, even those that have a screening process in place, compliance can often seem like a monolithic and complex process. How does an organization know where to begin? Who to screen? What lists to screen against? The task of screening against them all, plus managing the screening results in a timely and accurate manner in order to stay on the right side of the law can be daunting, and can significantly dent an organization’s bottom-line, if not undertaken properly.

Every organization is, of course, different, and will want to approach the task of setting up and managing a compliance program in their own way. However, there are some general tips and suggestions that can apply across the board to everyone, which can help make the task of establishing a screening and compliance process for your business significantly easier. In this article, we take a look at some of these universally applicable suggestions:

Designate a corporate export compliance champion. Organizations often designate a “compliance champion” (it can be a person, or a whole team) to champion the need for compliance across an organization. Given how many moving parts there are to an effective compliance process, not to mention all the moving parts in a business as a whole, having that champion can often be critical in keeping compliance among the forefront of a multitude of competing priorities. It also significantly increases the probability of success of management’s drive or support for an export compliance program.

 Screen everyone. Screening is paramount to an effective compliance program. Most organizations already understand this, and screen new clients and customers, but an effective screening program must go above and beyond—including screening new vendors, suppliers, new hires, business partners, contractors, visitors to your facilities, and any mergers and acquisitions. Casting a wide net is directly correlated with reducing compliance violations – the more people you screen, the fewer your chances of inadvertent compliance violations.

Rescreen frequently. We’ve said it time and time again, but compliance is an ongoing process. Screening someone once isn’t the end of it—as long as you are continuing to do business with them, you should be rescreening them. This, of course, is because government and international agency watch lists change frequently, often daily. Someone who was not on a list yesterday could very well be on one today, and vice versa. Your organization may have screened someone last week, and cleared a transaction with them, but if there’s a follow up transaction with them again later, you should screen them again. If you don’t, your newer transaction could very well end up being a compliance violation, because that entity might have been added to a denied party list between transactions one and two—something you would never know unless you rescreened them.

Set up a screening workflow. Having a defined process for screening and resolving matches can greatly enhance the quality of an organization’s compliance program. A defined process for screening, escalating, vetting, and resolving matches can formalize and systemize compliance, making it more efficient, but and also reducing the likelihood of errors or lapses along the way.

Automate the process as much as possible. An automated screening process, integrated with an organization’s ERP, CRM, or other business systems, such as Salesforce, SAP, MS Dynamics, Oracle, NetSuite, or any number of others available, helps greatly improve the quality of any screening and compliance program. Not only is the potential for human error—such as names slipping through the cracks because of an oversight including that they were simply forgotten—reduced, but organizations also end up freeing up precious time and resources that would otherwise have been allotted to laborious and time-consuming manual processes.

Improving Compliance

Compliance is a complex process, and requires ongoing effort and buy-in from the entire organization. It requires a certain mindset in terms of how it, and business in general, is approached by your organization. Taking on board the above suggestions should give most the basics from which to start. But as mentioned at the beginning of the article, the export compliance and denied party screening process can be a monolithic and complex undertaking. Using solutions such as those offered by Descartes Visual Compliance can help.

If your organization is looking for help with export compliance and screening, please feel free to contact us. We would be happy to help you meet your compliance needs.