By Anne Van De Heetkamp, VP, Product Management, Descartes Systems Group
Your research into denied party screening software solutions turns up so many vendors with similar messaging that you are probably having difficulty sorting through all of them to draw up the all-important shortlist of three to approach.
To the uninitiated, this can be, well, pretty darn annoying. It’s as though most of the compliance websites were developed from a single schema devised by some famous marketing guru.
Fortunately, that’s not true. More likely, businesses are copying ideas that work from each other – some more than others, which is something completely different to be annoyed about. That, however, is for another category of blogs, specifically on marketing dos and don’ts from the leading lights of the marketing world like Godin, Vaynerchuk, Ries, and Sheridan. Not for here and now.
But the point is that these compliance websites are all saying the same things. “Denied party screening is mission critical.” “You should be scanning multiple lists – OFAC, BIS, State, OIG, GSA, Interpol, FBI, UN, EU, and hundreds more.” And there is also something called sanctioned ownership screening such as OFAC 50, which blacklists organizations with 50% or more ownership by sanctioned entities. The punch line: there are no official lists to screen against, but all the vendors say that they can help you. Which in some cases might only be 50% accurate.
So how can you tell one vendor from the other? A lot of customers ask us how we are different from the competition. It’s a great question because it keeps us honest in terms of how we are performing in the denied party screening space, and it also ensures that our delivery of solutions and services is of a consistently high quality.
In this article, we attempt to answer that question by peeling back the industry layers so that you know what’s what, and how we stack up so that you can make that informed decision when it comes to picking a denied party screening solution.
In This Article:
The Denied Party Screening Software Vendors
A quick Google search for denied party screening solutions turns up lots of interesting and likely functional options for consideration. Most of the vendors have been around for some time and can probably address your needs at a basic level. Figure 1 is a list of the type of results you get when you search for vendors in the industry.
| Descartes Denied Party Screening | Publicly listed company based in the U.S. and Canada |
| Thomson Reuters | Publicly listed company based in the United Kingdom |
| E2Open | Privately held company based in the U.S. (Austin, TX) |
| OCR Inc | Privately held company based in the U.S. (Rockville, MD) |
Figure 1: Major Denied Party Screening Software Solutions Providers
In the interest of full disclosure to you, I represent Descartes Visual Compliance and Descartes MK Denial. But the point I am making is that the companies you see above are the major denied party screening vendors. What we all have in common is that we have been around for many, many years. We have grown in sync with the twists and turns of the ever-evolving export compliance industry, and we have seen many smaller players (and some big ones) come and go. As the old expression goes, we talk the talk and walk the walk. To that effect we can confidently state that as market leaders, we are the top denied party screening solution providers out there. And we have the breadth and depth of customers to prove it.
While on the surface compliance solutions may appear similar, where our differentiation shines is the foundation of how it is built to help businesses comply with dynamic regulations and sanctions while simultaneously supporting growth for the company. That might be a bold statement to make, but it is related to something we call third-party risk management and its high-value influence on enterprise growth. But before we dive into the different criteria to evaluate our capabilities and how we stand out, let’s explore some modern context into why our solution evolved to what it is today.
The Compliance Conundrum
Today’s world is so very different compared with even a few years ago. Increasing national security risks, rising geopolitical tensions, and global trade shifts and disruptions are major issues that have transformed the business landscape in ways companies in general are still struggling to adequately address. (See Figure 2). The spinoff to these issues is the promulgation of newer and tougher regulations across the world, especially from the United States, European Union, and United Kingdom, which in turn makes the business operating environment ever more complex.
Figure 2: The ever-changing global trade landscape
Why Denied Party Screening Across the Organization Is Best Practice
People often ask: “But isn’t trade compliance the domain of the import and export compliance people?” The straightforward answer is that it might have been more than a decade ago. But with all the myriad emerging threats and challenges we are facing today, restricted party screening is something that should be deployed across the organization and be part of the company culture if we are to minimize risk as far as possible.
Let me explain. Organizations are porous. We understand that denied parties can infiltrate at multiple points of a company structure. For example, prospects reaching out to the Sales department. True that the vast majority of times, it is legitimate. But just one breach can have devastating consequences. Hence, the Bureau of Industry and Security has Red Flag Indicators that companies need to follow. It’s the same for other departments (see Figure 3).
| Workplace Scenario | Department |
|---|---|
| Screening buyers of exports | Export Compliance |
| Screening suppliers of imports | Import Compliance |
| Vetting new prospects and customers | Sales and Marketing |
| Examining the background of an online buyer | ecommerce Sales/IT |
| Background checking new hires | Human Resources |
| Reviewing sales contracts | Legal |
| Evaluating supplier contracts | Procurement/Legal |
| Assessing visitors to your offices and plants | Facilities/Admin |
Figure 3: Departments that need to screen for denied parties
Here is a more visual perspective (see Figure 4). National security is the focal point of operations across the organization. That’s because one breach can result in disruptions to the business – fines, revocation of export privileges, and negative press that depresses brand equity.
Figure 4: Restricted party screening compliance is organization-wide
Denied Party Screening and Third-Party Risk Management
Now that we have the context out of the way, we can talk about third party risk management, which we referenced at the beginning of this article. Third party risk management is the process by which organizations continually monitor and assess the risk posed by third parties, and to identify and manage cases which exceed a predefined level.
Its importance to us is that organizations cannot take the old approach where restricted party screening is siloed in the export compliance department. As we have discussed, screening now crosses functional boundaries and corporate hierarchies with the goal of reducing risk to the minimum.
But this holistic approach applies to compliance solutions too. Denied party screening is but one piece of the international trade compliance puzzle. Organizations, therefore, also have to think about the following:
- Export Classification
- Export Documentation
- Export Documentation Submission
- Export License Determination
- Export License Submission
On the flip side, there is import compliance with its own set of requirements and challenges. A common myth is that all of this is taken care of by the customs broker or the corporate customs department. For what’s being shipped, that might be correct. But in terms of the supplier, has that party been screened against an appropriate denied parties list? Organizations might forget about this part. But don’t think that your customs broker or the freight forwarder will take care of this. Remember that compliance is the responsibility of the importer of record, just as it is the responsibility of the exporter of record on the other side of the equation.
All the compliance solutions mentioned above have to work in unison to meet real world scenarios by being able to satisfactorily address existing and emerging regulatory compliance. That includes at the day-to-day operational level – for example, keeping pace with Russia sanctions as restrictions tighten – all the way to new regulations still under discussion, such as upcoming rules governing GRC (Governance, Risk and Compliance) and ESG (Environmental, Social, and Governance) compliance. This is third party risk management. This is one key way the Descartes denied party screening solution differentiates itself from its denied party screening competitors. We will touch on key points of differentiation that can help you move closer to your decision.
How Descartes Stands Out Against Competitors in Denied Party Screening
With all this to think about, finding the denied party screening solution that fits your organization’s particular needs can be fraught with challenges. And there is the added pressure of finding the right one the first time. To help in your evaluation of Descartes as you search for a sanctions screening vendor, I believe the best way to demonstrate our distinction will be to compare our performance from two perspectives, i.e. industry best-in-class features, and customer satisfaction ratings from verified user reviews and unbiased third-party sources.
What stands out clear with Descartes denied party screening vs other players in the market is the ability to help a variety of customers at the typical start point of export compliance, and then empowering them to easily add solutions as their needs grow, as well as quickly integrating these solutions with existing Electronic Resource Planning (ERP), Customer Relationship Management (CRM) and other homegrown and legacy business systems. Mostly, these solutions are out of the box and configurable, making customer rollout to be extremely efficient.
Now, let’s go straight into detailed overview of key decision points and how Descartes approaches each one of them, starting with recommended features defined by the industry.
- Denied Party Screening Software Capabilities
- Comprehensive, Up-to-date Global Sanctions List Library
- Expansive Sanctions Screening Coverage
- Ability to Manage False Positives in Sanctions Screening
- Flexible Denied Party Screening Integration Options
- Robust Denied Party Screening Adjudication & Audit Functionality
Denied Party Screening Software Capabilities
A denied party screening software solution is an integral part of your compliance program. It needs to provide the data, technology, and adjudication support that a sanctions screening process requires. Below, we examine how Descartes performs against the most decisive sanctions screening capabilities.
Figure 5: Key Drivers of Our Denied Party Screening Product Roadmap
Comprehensive, Up-to-date Global Sanctions List Library
Sanctions compliance risks evolve in real time, with the potential for change happening on a daily basis as seen in recent times driven by geopolitical tensions. An effective denied party screening solution starts with the completeness of global watchlist and sanctions screening data to ensure compliance is maintained according to stipulated regulatory guidelines.
How Descartes Ensures Screening Data is Accurate and Current
We have been sourcing and maintaining highly accurate restricted party lists for decades. We dedicate vast resources to obtain hundreds of watchlists and post updates to sanctions lists as quickly as a few hours from when they are officially published. Our global content team spans data collection, collection support, quality assurance, and distribution. Any list we do not source ourselves are provided by respected industry partners such as Dow Jones (for example ‘researched lists’ like the 10% and 50% ownership, Military End Use, Adverse Media, or Politically Exposed Person) and should there still be lists that are not currently available on our platform, we can add them at the customer’s request.
Figure 6: Descartes up-to-date denied party screening list data is made possible by a committed team of researchers
It is important to note that without the dedication of resources and commitment of an internal team, screening data from alternatives on the market can many times be inaccurate, slow to update, and contain irrelevant and discontinued sanctions lists which prevent the execution of timely due diligence with costly implications.
Expansive Sanctions Screening Coverage
As discussed in an earlier section, an organization has many points of exposure to third party risks across the many processes that support its operation. From the onboarding of new hires and new customers, to supply chain partners and even mergers, and acquisition activities.
Descartes Provides Efficient Denied Party Screening for a Variety of Scenarios
At Descartes, we offer several screening options to cover different use cases at every stage of an organization’s business life cycle. We provide a straightforward, simple to implement, and proactive approach to managing sanctions compliance.
- Ad Hoc Online Screening – This level of access is best suited for companies at the entry level stage of export compliance, or where their weekly or monthly screening volumes are low, which from an operations point of view translates into a couple of screenings per week
- Bulk Screening – also known as batch screening is useful for screening entire databases at a go. Common use cases for this feature include at the very start of a compliance journey, when mergers and acquisitions occur, or when periodically an entire database needs to be screened.
- Dynamic Screening – dynamic screening, or automated rescreening is a capability built into Descartes solution to enable organizations keep pace with rapidly changing sanctions lists. The feature scans previously screened and cleared entities against changes to denied party lists. Depending on your preference / business risk profile, dynamic screening on Descartes can be easily configured to run on a daily basis.
In distinguishing between two vendors for this capability, look out for which solution can easily and seamlessly cover various third-party risk scenarios of different types and at different times of introduction into the business network. Organizations using vendors whose denied party screening frequencies are unclear or misaligned with regulatory guidelines have been found to violate sanctions.
Ability to Manage False Positives in Sanctions Screening
Two key components of denied party screening are match rates and match accuracy. In other words: how many ‘hits’ occur and how many of those ‘hits’ are true or false positives. Practically every sanctions screening vendor will claim “fewer false positives” or even “zero false positives,” but focusing only on the number of false positives is really answering the wrong question.
For instance, having zero false positives is not recommended – you could get zero false positives simply because the search engine skipped anything that did not strictly fit the query which ignores subtle differences in the way entity information is captured thereby creating false negatives, as seen in this OFAC sanctions enforcement action. So, a better vendor evaluation question to consider is how well the solution supports fine tuning search filters for better queries, to identify real vulnerabilities, and deliver true positive results for your compliance team while reducing the burden of managing false positives.
Descartes Customizable Search Filters Help Minimize False Positives
Our search engine is multifaceted and customizable to fit your specific risk appetite as well as the structure of the data you want to screen. We have a variety of tools (and experts) available to fine tune search settings, so the match rates and accuracy are optimized. With the right combination of our technology which leverages advances in artificial intelligence (AI) and machine learning (ML), with comprehensive screening data, and decades experience in the sanctions compliance industry, we work with you on a strategy to reduce false positives and maintain continuous compliance by performing regular search tuning exercises with you, reviewing key metrics to see how we can improve or make changes to fit your evolving business.
Figure 7: Our sanctions list search engine is constantly evolving to leverage new technologies and insights for better search results and compliance coverage
Faulty sanctions list screening technology with inadequate name matching algorithms, and search filter failures have been shown to generate high risk false positives and false negatives causing organizations to be found negligent and subsequently penalized. You can learn more about how to manage false positives in your denied party screening process in this linked article.
Flexible Denied Party Screening Integration Options
A denied party screening vendor should be a long-term partner, who understands your business and is able to support your compliance obligations as your business grows and changes through the years. When comparing compliance vendors, pay attention to providers with flexible deployment options that can collaborate smoothly with internal teams, proven integration capabilities (large customer base using a wide variety of systems), as well as their capacity to fit in with existing processes and evolve as needed.
Descartes Solution Is Configurable, Adaptable with Long-Term Scalability
Our restricted party screening and other export compliance solutions easily integrates with major ERPs and CRMs, including Salesforce, SAP, Oracle, NetSuite, Microsoft Dynamics, and more. Our screening software is also API enabled and has been integrated with a large variety of homegrown and legacy systems. How the integration is configured, depends on customer’s preferences, i.e., whether the customer prefers to show denied party screening results in the system Descartes integrates with, and/or within a Descartes application.
In addition to ease of integration and configurability, our solution fluently supports business models of any type. For example, more seasonal businesses (catering to peaks during the months) or exponentially growing ones. Our applications are fully scalable and can scale up and down as the days, weeks, months, or seasons demand.
Figure 8: How Descartes Integrated Denied Party Screening Works
Robust Denied Party Screening Adjudication & Audit Functionality
An audit trail is a vital part of any denied party screening process. The ability to track, capture, and report all tasks, activities, participants, times, dates, and actions taken related to a particular screening match.
Descartes Extensive Audit and Resolution Workflow
Our denied party screening solution provides dedicated functionality that streamlines decision making and recordkeeping which empowers users and decision makers to access and assess critical information related to sanction screening alerts. Additionally, collaboration tools help teams conduct thorough investigations, and auto-generated reports provide verifiable evidence that can be shared with stakeholders and regulators.
Every action and decision is automatically tracked and documented to ensure audit readiness with a detailed audit trail that demonstrates your due diligence activities. We save the data for no less than the legally required time period, depending on the user’s location, this typically ranges from 5, to 10 years. Our customer success team will lend their expertise to ensure that the workflows are automated and optimized in alignment with your policies and unique business risk profile. Our data security and privacy is maintained in compliance with GDPR standards, ongoing pentests and SOC2 Audits, to name a few.
What Are Users Saying About Descartes Denied Party Screening Software?
In this section, our customers will do the talking by providing verified, unbiased insight into how our solution measures up to our brand promise, their expectation, and other denied party screening vendors they may have tried in the past. Below we provide a summary of how our users rate our performance against top factors that affect customer satisfaction as captured on independent third-party review sites like G2 and Capterra.
Figure 9: Descartes Denied Party Screening User Satisfaction Ratings
Ease of Use and Adoption
At Descartes, we view the usability of our denied party screening software as its most significant feature. This is why our team of developers, customer resources, and product managers work constantly to optimize the user experience for simple and productive day-to-day compliance screening needs. Our modern and intuitive user interface combined with powerful sanctions screening tools makes Descartes low learning curve loved by both core compliance managers and ad hoc users. G2 and Capterra users give our denied party screening software a perfect score for ease of use, ranking it above other vendors in the same category.
Quality of Support
Our commitment does not end with a sale or a go-live implementation. Our Customer Success team is always available to help customers get the most out of their denied party screening subscription. That includes support on any ongoing matters as well as provide onboarding and refresher training.
We are always thrilled to receive feedback and invite customers to join development of our product roadmap by adding ideas which we turn into reality. We have various channels for this. The Customer Success team and the account manager are the primary contacts. But we also collect feedback in other ways, including via our Net Promoter Score surveys and through the product management system Aha!
Ease of Set Up and Reliability
Designed to be easily deployed, the typical Descartes denied party screening user is up-and-running within a day—addressing restricted party screening results with minimal training while business carries on as usual. We are ranked above average by G2 crowd users, outperforming other competitors in the category for our solutions ease of set up.
Our customers require a reliable solution. That means our application needs to be continuously available. Uptime over the past 12 months has been 99.99%. You can’t get better than that! Meanwhile, with billions of screenings per year, our throughput is below a second.
Training and Insights
Once you become a Descartes customer, you get access to our vast education resources and knowledge centers with all the relevant training on the application as well as industry insights, expert analysis, and updates on regulatory activities. Our experienced customer success team will provide capacity-building support, and with an understanding of your business, they will collaborate with you to ensure optimal use of the denied party screening software as it aligns with your compliance needs.
We also frequently provide information on new product releases, conduct customer webinars, refresher courses, and host an annual Innovation Forum to provide users with ample opportunity to learn what is happening with their applications, at Descartes, and in the sanctions compliance industry.
Value for Money
Descartes denied party screening solutions may not be the cheaper option out there, especially with free screening solutions also available. However, to truly compare evaluate our solution on a price perspective, it is also necessary to look at what the total cost of an effective solution can be – with other vendors charging piece meal for basic screening tools, resource draining deployments, and costly upgrades. Again, for the key decision point, our users on both software review sites, rate us above average for value for money when compared to other vendors.
Depending on make-up of your solution, denied party screening can run from a couple thousands to over $100,000 a year for large enterprises. When compared with other vendors on the market, our basic solution provide more features, functions, capabilities, and unlimited training / support – without extra costs. More detailed information on how pricing for a denied party screening solution works, can be found here.
In Summary
Assessing a sanctions screening provider based on the product features and technological capabilities, and the organization’s post-sales performance / reputation is a difficult albeit necessary exercise in order to make confident buying decisions. When making the decision for which vendor to pick, the most important consideration is not simply which is the best software on the market, but which vendor solution is best suited to your specific operational and compliance needs.
We hope that this article has given you a good idea about how Descartes sets itself apart from other vendors in the market, as well as an understanding of our capabilities. We have been delivering sanction compliance solutions as part of our core business for decades. Our global footprint and customer base is expansive with many long-term customer relationships, some spanning over 20 years. With our technology-enabled approach, we bring innovative solutions that meet the evolving risk and compliance landscape. No matter the industry, data volumes, or business processes / system, we are uniquely positioned to support at scale, a wide variety of customers’ requirements.
But don’t take our word for it, see what users are saying about our denied party screening solutions. For more information including a demo and a trial, please Contact Us.
We Answer Your Questions About Denied Party Screening
- How Much Does A Denied Party Screening Solution Cost?
- Top Red Flags to Look Out for When Selecting a Denied Party Screening Software Vendor
- How to Identify a Best-In-Class Denied Party Screening Software
- How to Manage False Positives in Denied Party Screening
- How to Effectively Compare Denied Party Screening Software Vendors
- What do Organizations in my Industry Need to be Mindful of When it Comes to Denied Party Screening and Export Compliance?
- Unforced Errors in the World of Export and International Trade Compliance Violations That You Need to Know About
- 12 Steps to Optimize Your Denied Party Screening Program
- ROI of Compliance: How Denied Party Screening Drives Value Creation for the Organization
- Top Five Best Practices to Integrated Denied Party Screening
