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Denied party screening 2016 webinar final
The 2016 webinar on denied and restricted party screening emphasized the necessity of thorough knowledge and compliance in global trade, particularly regarding the legal obligations to screen parties against numerous governmental lists that change frequently. Key challenges included the complexity of managing extensive master data, the varying legal implications of employee screening, and the arduous task of initial screenings across large databases. Participants were advised on effective screening practices and the importance of maintaining clean and accurate data to mitigate compliance risks.
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Denied party screening 2016 webinar final
- 1. Denied & Restricted PartyScreening The Keys To Success WEBINAR 2016 Presenters Ned Blinick Dave Moore Dana M. Smalley Vice President / Blinco President / Vigilant President / PITC
- 2. Contents Safe Harbor Statement KnowledgeIs The Key To Success Denied Party Screening: 101 Your Obligation Reality & Truth Help & Guidance Closing WEBINAR 2016
- 3. Safe Harbor Statement Thispresentation includes publically available data, opinions, estimates or other information that might be considered forward-looking. While the statements enclosed represent current judgment on what the legal obligations currently are as of the date of this presentation, you are encouraged to independently review all material provided herein. The content is subject to risks and uncertainties that could cause actual results to differ materially. WEBINAR 2016
- 4. Knowledge Is TheKey To Success WEBINAR 2016
- 5. Knowledge Is TheKey To Success WEBINAR 2016 Ignorance is not an option!
- 6. Knowledge Is TheKey To Success Ignorance is not an option - Examples US import law specifically dictates an importer take “reasonable care” (US Customs “Mod Act” of 1993 under 19CFR) US export law specifically dictates you cannot “self blind” (Supplement 3 to Part 732 of 19CFR) WEBINAR 2016
- 7. Denied Party Screening101 WEBINAR 2016
- 8. Denied Party Screening101 Governments around the world maintain lists of “denied” or “restricted” parties with whom they dictate it is prohibited to do business with. Challenge #1: There are over hundreds of lists with thousands of parties to check globally. These lists can, and do change daily WEBINAR 2016
- 9. Denied Party Screening101 Who should be screened? WEBINAR 2016 • Governments • Companies • Banks • Freight Forwarders • Customers • Suppliers / Vendors • Agents • Service Providers • Employees • Visitors • R&D Partners • Consultants Challenge #2: This is potentially a large list of master data to screen
- 10. Denied Party Screening101 Do governments actually dictate to screen employees? Do companies actually screen their employees? Challenge #3: Employee screening has different legal implications beyond global trade and differ by country. WEBINAR 2016
- 11. Denied Party Screening101 WEBINAR 2016 https://www.bis.doc.g ov/index.php/forms- documents/doc_view/ 413-part-736-general- prohibitions US Export Regulation Example
- 12. Denied Party Screening101 WEBINAR 2016 US Export Regulation Example
- 13. Denied Party Screening101 US Dept. of Commerce has the following embedded within their best practice outline (interpretation of the regulations) WEBINAR 2016 http://www.bis.doc.go v/index.php/forms- documents/doc_view/ 7-compliance- guidelines Current Guideline – US Dept. of Commerce
- 14. Denied Party Screening101 WEBINAR 2016 http://www.bakermckenzi e.com/files/Uploads/Docu ments/Amterdam/TradeC ompliance%20Conference /pn_amsterdam_tradecon trolssanctions_fuchs_nov1 2.pdf Employee DPL Screening 2012 Study – Baker McKenzie Firm
- 15. Denied Party Screening101 Employee Rescreening WEBINAR 2016 https://www.eandi.org/pdf/Hi reRight_EmployeeBenchmarki ngReport_2014_4.14.pdf 2014 Study – Hire Right Benchmark
- 16. Denied Party Screening101 Bottom Line - DPL screening is not optional DPL Screening (manual or automated) is a legal obligation and a required part of your business! Each government and government department can and will impose their own fines, based on the violations incurred. WEBINAR 2016
- 17. Denied Party Screening101 The enclosed is a collection of 253 various country’s denied party lists, and their regulatory references to comply with. WEBINAR 2016
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- 19. Your Obligation Steer Clearof Trouble If a party is a potential match on multiple lists, you have risk and liability to review each listing. You must review each list to confirm if the “Potential Match” is a true or false hit. If an denied party is on multiple lists, you risk being under violation of each lists when doing business with a denied party, pending your transaction circumstances. WEBINAR 2016
- 20. Your Obligation Key ScreeningTriggers ◦ Screen before you make a shipment ◦ Screen before any financial transaction are made ◦ Screen before visitors enter your facility when you have trade controlled technology (deemed export risk) Helpful Insight Screening at the time orders are taken: ◦ Prevents you from delay on the back end – time of shipping ◦ Provides critical lead time if a potential match is a valid hit, to escalate internally ◦ Prevents possible waste of time, materials and money WEBINAR 2016
- 21. Your Obligation Screening Considerations Becauseyou cannot do business with parties on DPL lists, and the lists change daily, the effort to screen can become challenging. Key details to look at: ◦ How quickly do you ship when an order is placed? ◦ How quickly do you make payments? ◦ Do you have the ability to screen at the front desk of your facilities when necessary? WEBINAR 2016
- 22. Your Obligations Questions ToPonder If you have a automated solution, do you understand and manage it’s screening parameters & preferences? ◦ What is your company’s risk tolerance level? ◦ What types of word matching algorithm are used? ◦ Do you have an option to test the screening solution? ◦ Do you have an option to modify or use your preferred settings? ◦ What lists does the solution screen against? ◦ What lists do you wish to / need to screen against? ◦ Who is your company? ◦ Where do you have locations (inclusive of part ownership or voting shares)? WEBINAR 2016
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- 24. Reality & Truth Reality Complianceis perceived as a cost to business, however it’s also a cost avoidance Denied party screening is a core foundational element to any trade compliance program Denied party screening is a current focus of many government audits based on the publicized steep penalties Challenge #4: Initial working of the denied party screening is typically a monumental task because you are screening your full database of parties ◦ Do not under estimate this level of effort WEBINAR 2016
- 25. Reality & Truth Truth Manycompanies do not have the in-house bandwidth to tackle their initial screening Screening can be more efficient when you cleanse your data prior to screening ◦ Removing duplicates will reduce your overall volume to screen and work ◦ Reviewing data integrity will help improve your overall screening accuracy A form of automation is almost a necessity to meet your compliance responsibilities ◦ The number of lists to screen against matched with customer’s volume of data, makes it close to impossible to manually screen in a timely fashion. WEBINAR 2016
- 26. Reality & Truth Truth Justbecause you automate screening, doesn’t mean you are hands free driving… ◦ You will still have to work the “potential matches” or those screenings which require review or are escalations ◦ Have a business process documented and in place to work the potential matches Don’t screen what you don’t have or what is not accurate ◦ Back to knowing your business and your data… The good, the bad and the ugly. When you start to look, you will learn a lot about your business ◦ Everyone does! Take it in stride and move forward in a positive direction WEBINAR 2016
- 27. Reality & Truth Truth Understandthe confirmed hits / matches and the control list the party is on. ◦ Every list has different reasons for why they post party’s names on them. You need to consult with your legal or executive management to understand if your business is affected by that list or reason the party is on the list. ◦ Understanding the trade regulations and your responsibility to them is key to making the right business decision. WEBINAR 2016
- 28. HHS – Excludedby the Dept. of Human Services from participation in all Federal health care programs DOC – Theft, wire fraud, money laundering and misapplication of government funds. DOJ - fraud or felony convictions arising out of a contract with the Department of Defense (DOD), drug trafficking or possession convictions OPM – Lost professional licenses, convicted of a crime related to the delivery of or payment for services, violated provisions of a Federal program or barred by another Federal agency. FDA-FNS – Disqualified and Restricted Clinical Investigators, FDA Debarred Individuals, firms under the Application Integrity Policy and individuals who have been debarred or suspended from activities by any Executive Branch department. FDA-FS - convicted of civil judgment for commission of fraud or criminal offense in connection with obtaining, attempting to obtain, or performing a public or private agreement or transaction; violation of Federal or State antitrust statutes, commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, tax evasion; violation of the terms of public agreement or transaction so serious as to affect the integrity of an agency program. ARMY/NAVY/AIR FORCE – court martials, tax and regulatory as defined by Judge Advocate General EPA – convictions, civil judgments or fact based cases involving environmental crimes, contract fraud, embezzlement, theft, forgery, bribery, poor performance, non-performance or false statements. Reality & Truth WEBINAR 2016
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- 30. Help & Guidance HelpYourself First – Ask Questions Is Your Data Clean? Duplicates Accuracy What Data Do You Capture? Company Name (i.e. party types such as - Customer, Supplier, Vendor, Logistic Providers, etc.) Location Address (Street, City, State, Zip Code, Country) Billing Address Actual ship to address (i.e. drop shipment, Intermediate Consignee, 3PL, etc.) Contact names Where Do You Capture Data In Systems Other Than ERP? Employee names & addresses Building visitors Financial institutions (i.e. accounting, letters of credit, wire transfers, etc.) WEBINAR 2016
- 31. Help & Guidance WhatData Does Your Legal Department Wish To Screen? Logistical / Business Operations (Tend to be Party Types in a ERP System) Customers & Bill To Party Vendors & Suppliers Logistic Providers (i.e. Freight Forwarder, Cross Dock Consolidations, Carriers, etc.) Financial Institutions (Companies Who Pay Your Company) Other Building Visitors Employees Individuals Granted Systems Access (i.e. Consultants, On Demand Support, etc.) Are You In Over Your Head? Making Decisions on Behalf of a Company is a Personal Liability. Know when to ask for help and seek guidance WEBINAR 2016
- 32. Help & Guidance FindingGovernment Guidance on Their Expectations of Working Potential Matches Can Be Challenging. Each government can offer their way of meeting their legal and regulatory responsibilities. Most of which are manual efforts. Unfortunately, there is not currently a free publically available screening solution to screen against all global Denied Party Lists. ◦ Maybe some day …. WEBINAR 2016
- 33. Help & Guidance Whatis Publically Available? The USA now provides a Consolidated Screening List (CSL) for some (not all) of the US DPL lists: http://apps.export.gov/csl-search#/csl-search Individual global government lists with links are provided in slide 15 WEBINAR 2016
- 34. Help & Guidance TheUS Department of Treasury / OFAC Provides Guidance On How To Work a Potential Match WEBINAR 2016 http://www.treasury.go v/resource- center/faqs/Sanctions/ Pages/directions.aspx
- 35. Help & Guidance Example: ImpressivelyOFAC walks you through the process of determination when performing a review of a potential match. WEBINAR 2016 NOTE: This is for the OFAC DPL list only, however it is helpful perspective in the evaluation process
- 36. Help & Guidance ExampleCont.: WEBINAR 2016 NOTE: This is for the OFAC DPL list only, however it is helpful perspective in the evaluation process
- 37. Help & Guidance Consistencyis Critical Ensure your staff is consistently following the same procedures to review potential matches Ensure your staff understands what they can or cannot do when reaching out to potential matches to ask questions. WEBINAR 2016
- 38. Help & Guidance AdditionalHelp & Guidance While the global trade community may be small, we tend to help our own. ◦ Reach out and call a community member (ICPA has a member directory for this very purpose) ◦ Leverage research tools (ICPA and other communities retain a database of commonly asked questions with answers). ◦ If you need additional help beyond the basics, it may be a good time to consider consultants who are experts in this area ◦ When necessary, engaging in legal assistance may be a healthy path to take based on your internal company findings WEBINAR 2016
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- 40. Closing Challenge Recap Challenge #1:There are over hundreds of lists with thousands of parties to check globally. These lists can, and do change daily Challenge #2: There is potentially a large list of party master data to screen Challenge #3: Employee screening has different legal implications beyond global trade and differ by country. Challenge #4: Initial working of the denied party screening is typically a monumental task because you are screening your full database of parties Do not under estimate this level of effort WEBINAR 2016
- 41. Closing Knowledge is thekey to success Be aware….be prepared! WEBINAR 2016
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- 43. Ned Blinick V.P. Salesand Marketing Blinco Systems Inc. (416) 510-8800 ext. 234 www.3rdwavegcm.com eblinick@blinco.com WEBINAR 2016 Dave Moore President Vigilant Global Trade Services LLC (260) 417-1825 www.vigilantgts.com dmoore@vigilantgts.com Dana M. Smalley President Partners In Trade Compliance (PITC) (941) 468-1384 www.pitc2011.com dana@pitc2011.com PRESENTERS