What is Denied Party Screening?

All exporters—regardless of size—must comply with the export regulations that are stated for where they carry out export activities.

Export compliance entails that you are following the rules and regulations established by the related government authorities. Among those rules is a restriction on doing business with entities, individuals, or groups that the government you are exporting from deems a danger to their interests.

Failure to comply is a violation of law and may result in civil or criminal prosecution, as well as denial of exporting privileges.

Restricted Party Screening

Restricted party lists (also called denied party lists) are lists of organizations, companies or individuals that the UK government—and other foreign governments—have identified as parties that a business cannot do business with.

There are several reasons why a person or company may be added to a restricted party list. For example, they may be a terrorist organization or affiliated with such an organization, they may have a history of corrupt business practices, or they may otherwise pose a threat to national security.

Sanctions lists are official lists of names that are published by various authorities on national and international level. For example, by OFAC or the EU. Sanctions lists include persons, organizations, vessels, banks, and companies subject to official economic or legal sanctions. It is prohibited to provide financial or economic resources to any party listed on a sanctions list.

Restricted party screening (or denied party screening) refers to the process in which a company checks a potential customer or business partner against one or more of the restricted party lists to ensure they are not doing business with a restricted party.

Consequences of Non-Compliance

It is important for all exporters to perform restricted party screening of all parties in each transaction. The exporter is ultimately responsible for ensuring that goods do not end up in the hands of any individual or company on any of the restricted party lists.

Any breaches can incur civil or business fines and criminal violators may be sentenced to prison for up to 20 years, and administrative penalties may include denial of export privileges.

If an exporter comes across a party on one of the restricted party lists, they are encouraged to report this to the agency that published the list.

It is imperative if you are an exporter or importer to ensure you understand your responsibilities and put controls in place manage / mitigate this compliance risk.