Restricted Party Screening Gains Importance in New Era of Enforcement

Manually managing restricted party lists is no longer a viable option, with too much room for error and too small a cushion for shipment delays.

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Eager to fulfill his campaign-trail promises, President Donald Trump continues to tackle the tough issues of global trade, immigration and terrorism. He is aggressively going after new, bilateral trade agreements that better benefit American workers and crack down on criminal activity. For months, the administration has kept the industry guessing whether any of these ideas were mostly campaign rhetoric or an ambitious repositioning of U.S. trade policies.  

The administration has removed the U.S. from the Trans-Pacific Partnership (TPP). The North American Free Trade Agreement (NAFTA) is being renegotiated, much to the relief of many trade watchers. Later this summer, Britain and the United States will kick off informal talks on a trade deal. The United States did falls short of securing ambitious gains in trade with China, while Japan sidestepped a failing U.S. trade agreement to forge a historic, new pact with the European Union (EU). 

While any new trade deal will eventually open up new markets and opportunities for exporters, increased enforcement means companies must take extra care in all business dealings. With the Administration’s clear hardline stance towards greater enforcement, exporters must ensure they have a solid restricted party screening policy in place to avoid being on the wrong side of the law.

Compliance with U.S. export controls and regulations is vital to national security, protecting U.S. interests both at home and abroad. Exporters must restrict the shipment of goods to certain countries, companies, organizations and individuals. Violations can bring enormous fines and up to 10 years in prison, along with suspension of export privileges. It is no stretch to imagine the Trump Administration continuing the previous administration’s increased customs and trade enforcement.

For companies engaged in global trade, this means paying close attention to the latest regulatory changes when seeking new markets. The vast majority—95 percent—of the world’s consumers live outside the United States, but pitfalls in global trade compliance can bring down companies that don’t proceed with caution. What makes restricted party screening difficult to manage is the lack of a single, global database. Each government maintains their own lists, so exporters must be aware of the latest changes in every country they export to.

With the new U.S. Administration signaling increased enforcement actions and restrictions on immigrants from certain countries, there is potential for the restricted parties lists to grow quickly. Tighter screening and audits may translate into a higher number of cargo delays and false positive matches. Companies will need a system in place to ensure that they have done due diligence with restricted party screening, are able to quickly clear up any name confusion, and get cargo released to its ultimate destination.

Manually managing restricted party lists is no longer a viable option, with too much room for error and too small a cushion for shipment delays. Exporters must turn to the latest technology to stay on top of ever-changing lists from hundreds of agencies and countries. A managed, hosted software solution offering restricted party screening with a high level of accuracy and low false positives will bring the best results. Ideally, such a solution would integrate with the company’s existing global trade management software, allowing for a smooth and compliant supply chain.

Exporters should be poised to take advantage of new markets and trade deals, but with the correct tools on hand to prevent illegal transactions and their associated fines and penalties that may come from a government whose focus has turned towards enforcement. More about restricted party screening programs is available here.

Gary Barraco is the director of Global Product Marketing at Amber Road. He is responsible for developing strategic product marketing direction and presenting the Amber Road brand and solutions worldwide. As the platform evangelist, Barraco develops and launches customer insights, go-to-market plans, product messaging and content, and field marketing tactics which establish Amber Road’s solutions as a standard in the Global Trade Management space.

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