Best Practices for Screening Export Transactions Against U.S. Government Denied Parties/Parties of Concern Lists…….

There are multitudes of software programs available for screening denied parties. And shippers such as FEDEX and UPS have online tools for screening as well, but here at TSI Global Consulting our recommendation is to use the U.S. Government Consolidated List screening tool. We suggest that you run multiple screens for each export transaction. Screen #1 should be done when you receive an export inquiry. Then, assuming screen #1 is clean and you negotiate a sale, you should run a second screen prior to any pre-shipment payments that are required under the contract. …….and then a third screen just prior to shipment (ideally same day goods are to leave your facility on route to the port of export–not when the goods have already been loaded onto the plane or ship as that it too late). Also, keep in mind that having a license is NOT a free pass to get you off the hook from screening your consignees. It is always possible that a consignee may have been added to the one of the denied parties lists AFTER the issuance date of your export license. Do not rely on the U.S. government to notify you of a change to your license status. Finally, keeping in mind the U.S. Treasury Office of Foreign Assets Control (OFAC) 50% Rule, you should screen all consignees by company name and key ownership. While obtaining complete details on ownership structure may not always be feasible, in cases of exports to sensitive countries (Russia, China, Iraq, Cuba etc.) our “word-to-the-wise” is to perform deep due diligence and run a “Comprehensive Screen” against corporate ownership to ensure a transaction does not violate the 50% rule. Finally, we suggest that you make it clear to your foreign consignees that transparency with regard to requests for information on ownership percentages is a required condition for processing their order.

For more information and guidance on screening your foreign consignees contact TSI Global Consulting.

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