As we all know, it is mandated that we screen our International transactions for entities or persons on the Specially Designated Nationals and Block Persons List (SDN List). Failure to accurately screen for these parties can lead to substantial fines and penalties. For any organization doing business in the international trade arena, screening for these bad guys should be number 1 on your global risk list. Remember, you cannot Import from the SDN entities as well as export.
Up to date, software programs allow you to screen your business partners at various stages of a transaction to determine if they are on a hit list. You could add a party after receiving an order until the time the goods ship. We have seen it happen! There are occasions when these programs will trigger a hit that proves to be false as most screening is done using fuzzy logic.
For example, an entry such as “China National Electronics Import & Export Corp” may return a hit on the word “export” or “import”. As this party is not on the SND list, but other sanctioned parties do contain “export” or “import” in their name, we do not want to get hits for “export” or “import” so we put “Export” and “Import” on our “False Hit List”.
Our False Hit List is subject to periododic review as this list is always being supplemented or amended by OFAC. Some software will automatically add entities or parties to your false hit list but do not let this happen. Only allow manual additions to the fake hit list under management supervision.
If you have any questions, please call Harvey Waite or Paul D’Eon at OCEANAIR at (781) 286-2700.
