What is Restricted Party Screening?

It’s vital for organizations to be compliant in global trade or transactions and manage their restricted party entities with efficiency and speed through the correct restricted party screening solutions. The screening of sanctioned or authorized parties serves as an incredible foundation for many security and compliance programs.

Examining trading partners is a significant component of the various compliance initiatives and export management programs. The lack of conducting restricted party screening can result in fines or sanctions for various small, medium, or large organizational entities across the various industries.


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What is Restricted Party Screening?

Restricted party screening is a control service program that verifies whether an individual, institution, or country has had its export or trade privileges revoked or restricted per the U.S. departments of states, treasury, or commerce.

An organization has the mandate to verify whether an individual, business entity, organization or country is listed on any federal restricted party lists. The restricted party screening is a significant component in trade compliance and enhances efforts to prevent or restrain U.S. export control laws violations.

It’s important to note that everyone who does business with an entity or organization should be screened. Screening should be performed when exporting a good or product and processing payment or transactions through a U.S. financial institution or bank.

Everyone in the organization that interacts with a potential client, repeat supplier, customer, visitor, or vendor should take the initiative of screening their respective contacts. After screening, parties should keep a record to show that they are safe to do business with, and screening takes place.


Denied Party Screening


When is Restricted Party Screening Required?

A restricted party screening is required when there is an interaction between foreign entities or persons. Screening should ideally occur throughout the ongoing business relationship and at the different points in the sales cycle. Some of the areas and occasions when the restricted party screening is required include:

  • When a point of sale or contact is first made in sales or e-commerce
  • When the order is about to be shipped or dispatched
  • When the payment is being processed
  • When a legal contract is about to be signed
  • When an order is placed with a supplier or vendor


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Restricted Party Screening vs Denied Party Screening?

Denied party screening, which is sometimes referred to as restricted part screening, involves examining a potential customer or business against sanctioned or denied party lists to ensure that they are not infringing any export control regulations. The denied party screening process involves screening an organization’s index or customers, employees, transactions, suppliers, and vendors against a sanctioned or denied party screening list. This is most commonly conducted using an automated denied party screening service.


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Your Next Steps: Execute Restricted Party Screening with ShipDPS

Organizations should demonstrate reasonable care and compliance when it comes to conducting restricted party screening. This will enable organizations to reduce exposure and various risks. However, a company or organization might face some challenges during the restricted party screening process, including a lack of current or accurate lists to refer to and the absence of proper screening methods.

Companies should implement technology-based solutions and practices that will help them manage to screen efficiently and effectively. Some technology-based practices and solutions include automating the entire screening process, implementing cost-efficient solutions that your company can utilize quickly, and supporting the multiple integration methods.

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