The first step in most organizations’ export compliance program is typically Denied Party Screening, also known as Restricted Party Screening, among other names. Screening is the process of helping to ensure that organizations do not do business with any party on a government or international watch list.

People and entities on these watch lists face trade restrictions due to reasons ranging from terrorism, criminal activity, and money laundering, among others. Doing business with these entities can lead to criminal and civil penalties, large monetary fines, imprisonment, negative press coverage, a hit to an organization’s reputation, and a revocation of export privileges.

Our Denied Party Screening FAQ page goes into greater depth about denied party screening, and related obligations.

Governments around the world control exports for many reasons, including preventing controlled technology or dual-use goods from falling into the wrong hands. Exports are also regulated to advance foreign policy objectives, and to further economic and trade goals.

This varies from organization to organization. It depends on the location, or locations, in which a business operates, where they export, the nature of the products, technologies, and services, and the various parties involved with the transaction.

Some of the more common lists organizations screen against are:

As mentioned already, organizations should pick the lists it screens against based on the specific needs of the business. This is an area in which Descartes Visual Compliance™ can assist.

The simple answer is that there is no best way to maintain export compliance. For an organization to be truly export compliant, there should be a program in place that includes the following export compliance best practices:

Government agencies and bodies regulate and control exports by assigning unique export codes or numbers to individual items and components. These classification codes typically denote which restrictions apply to each item, and organizations that import or export are expected to correctly classify their products, as well as adhere to the restrictions that come with them.

EAR99 is a designation on the BIS’ CCL. It acknowledges that an item is not on the CCL, but still subject to the EAR. EAR99 items can usually be exported without license, unless they are being exported to a sanctioned/embargoed country (such as Iran or North Korea), or a restricted/denied party.

Exports do not necessarily have to involve the physical transfer of goods or information out of the country. If, for example, controlled information is transmitted or exposed to a foreign national via electronic means, it counts as a “deemed export”, even if said foreign national resides in the United States. Any organization can fall foul of deemed export violations, with educational institutions and research facilities known to be at high risk for such violations—inadvertent or otherwise.

Any organization doing business in the United States, or with American citizens or organizations, has a legal obligation to meet American export compliance requirements, regardless of whether or not they are based in the U.S. Any transactions conducted in the U.S. dollar, or routed and processed through American financial institutions, come under the purview of OFAC. Additionally, organizations may also be bound by the export compliance regulations of the countries they are based out of and do business in.

Should your organization determine that your exports are covered by either the EAR or ITAR, you must either apply for the appropriate license, determine whether they come under the purview of an exemption (ITAR) or determine if it is possible to get an exception (EAR).