Restricted Party Screening: Using Software to Manage Trade Compliance

Posted by Expeditors on Sep 28, 2018 11:55:02 AM

Restricted Party Screening Using Software to Manage Trade Compliance

Today’s complex supply chains place strong demands on companies and require the simultaneous management of many distinct and important areas, including keeping production in sync with customer orders, managing inventory and overseeing the movement of goods to their destination. It perhaps goes without saying that compliance is not the least of the supply chain issues requiring attention.

MANAGING RISK

Compliance generally needs to be incorporated into the business process at all relevant points. One specific area of compliance relates to laws and regulations that prohibit interaction with “restricted” or “denied” parties. Failure to comply with these laws and regulations, on even a single shipment or transaction, can carry significant consequences.

In order to manage the risk of interacting with or shipping to restricted parties, many companies screen both their customers and other parties to a transaction. Screening is the process of cross referencing the parties involved in the transaction against the many (and ever-changing) lists of restricted parties published by different governments and governmental agencies.

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ESTABLISH FRAMEWORK

Screening software can help companies apply the oversight required to prevent transactions with restricted parties. Most screening software has a cost to implement and administer. Those companies that outlay resources relating to a screening solution, of both a financial and an employee-time nature, make a strategic cost-benefit decision. Along with the benefit of preventing government penalties, there is the benefit of preventing potential loss of sales - a company caught transacting business with a restricted party weakens its brand and may suffer a loss of goodwill with customers. Decision makers frequently determine these benefits far outweigh the cost of implementing a restricted party screening solution.

Before a company embarks on implementing a particular screening solution, it is a good idea to spend time asking some preliminary questions. 

SCREENING SOFTWARE

Once you arrive at the point where you know what you want to achieve, you can start evaluating your options. Any screening software provider should be able to give you a system demonstration and perhaps even a limited-time trial usage of its system. If you take advantage of a trial usage period, make sure you have time available to actually evaluate the product. Involve anyone who would use the system if you bought it.

If you are looking to learn more about about how to efficiently manage trade compliance with software, download the below white paper. 

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