Top 5 Reasons Why Your Company Should Start IP Screening

IP screening plays an important role in ensuring your organization is staying compliant with the latest government regulations.

After all, doing business with sanctioned countries can leave your organization exposed to excessive risk. However, for many companies, gaining access to a real-time database highlighting current sanctioned entities and their location is the real challenge.

Since you’re ultimately responsible for your own compliance, you should consider IP Address Geolocation Screening to prevent an illegal transaction.

Not convinced? These are the top 5 reasons why we believe that screening for IP addresses should be a high priority.

1. OFAC Has Been Sanctioning Organizations For Preventable Incidents

The United States Office of Foreign Assets Control (OFAC) has been issuing considerable fines this past year to companies doing business with other entities in embargoed countries, including:

Iran
Syria
Sudan
Cuba
North Korea

The targets of the fines came from a wide variety of markets, from software development to digital currency to an ERP provider and various others. All companies regardless of industry are in the crosshairs if they fail to address export compliance.

It’s important to note that many of these fines were significantly reduced because the organizations in question were willing to admit to the violations and implemented corrective actions against further incidents, including IP Address Screening.

2. You’ll Know Who You’re Working With

The takeaway here is that an IP address can tell you where a contact is coming from, and IP Blocking technology can assist in avoiding illicit transactions with sanctioned entities.

IP addresses work by giving each computer in a network a specific string of characters. Each address has geolocation data on it so that one can identify where in the world the machine is physically. IP analysis can also help you weed out unsafe connections.

For instance, if a contact claims to be based in Europe but has an IP geolocation in Serbia, then it’s a sign you have an untrustworthy contact.

3. You’re Strengthening Your Compliance Risk Management

To minimize compliance breaches and avoid costly OFAC fines like the ones we’ve discussed above, you need to start using IP addresses as an indicator for any business you work with. In other words, IP screening is just another component of an overall sanctions risk management system.

The government has made it clear that businesses themselves are responsible for following the sanctions guidelines. While there aren’t any explicit instructions laid out in law, it’s still in your best interest to protect yourself against illicit dealings.

Businesses should see IP screening as a logical extension of their general governance, risk, and compliance program.

4. You Will Be Seen as More Trustworthy

According to a White Paper from the Rutgers Center for Government Compliance and Ethics, “an organization that has made a robust effort to prevent and detect violations of the law by its employees and others acting for it will be treated less harshly than one that was indifferent to complying with the law.”

Even the mere initiative of implementing compliance measures like IP screening into your company puts you at an advantage should an incident arise. By showing that you thoroughly screen the IP addresses of all your contacts, you will be seen as more trustworthy in the eyes of not only the government but also your partners and clients.

On top of that, educating your staff about compliance measures like IP screening will help them recognize illegal or unethical activities throughout their professional careers, further boosting your compliance posture.

5. Getting Started Is Easy

What’s the most efficient way to go about risk management without cutting into the productivity of your workflow?

Descartes offers a range of comprehensive denied party screening and 3rd party risk management solutions that includes IP address geolocation screening for compliance-focused companies looking to eliminate the risk of working with entities in sanctioned areas.

Our integrated compliance management platform combines all the features you need to stay in line with industry standards and regulations. From upper management all the way to new staff, everyone in the company must work together to minimize the risk of violations.

By utilizing our robust solutions, organizations can strengthen their compliance processes, enhance their competitive edge and increase sales velocity.