A strict risk management policy is a must for global trade. Implementing and administering risk reductions internally will ultimately lead to risk reductions abroad. However, this only works if you have sharpened your restricted party screening policies. This common area of risk must be thoroughly examined and managed by a software solution for precisely-targeted automations that increase accuracy and precision within your screening process.
The first question is, “Who do I screen?” The answer may seem reductive, but it is effective: “Anyone and everyone your company does business with, employs, has relations, partners, banks, or even has as guests or visitors. In SAP, essentially all your business partners and ad hocs.
SAP GTS is a powerful tool that can reduce restricted list screening risks. It includes an innovative Sanctioned Party List screening functionality (SPL), where your business partners are screened against sanctioned and denied entities, as well as restricted persons, while minimizing false positives and maximizing true positive hits. Although there are many other screening tools available, such as OFAC’s Sanction List Search, many come with a false hit rate of almost 50%. That cancels productivity gains and increases the risk of doing business. Let’s take a look at how a properly-configured SAP GTS solution does the job.
Mastering the Restricted Party Screening Process
Grabbing the reins of your restricted party screening is critical to reducing risk and achieving long-term success. That means building a solid foundation of knowledge about the screening process and SAP GTS implementations. Make sure your implementation partner allocates a GTS specialist for your project, to ensure your team has that knowledge and experience.
SAP GTS uses sanctioned party list functionality (SPL) for conducting screening actions. SPL uses government, trade agencies, or consolidated lists provided by a third-party data provider..These are subscription-based lists are updated periodically and can be automatically uploaded. This gives you an automated SPL and embargo screening process for any/all business partners , while largely reducing false hits and increasing true hit accuracy A GTS specialist will then leverage SPL’s robust functionality parameters to increase accuracy and precision to provide a screening process that surpasses traditionally screening results. This removes unneeded screening actions from your system and reduces overhead. This allows legal and compliance to pursue other non-mundane activities to focus on more critical issues.
This is all dependent on the validity and accuracy of your organization’s master data. GTS specialists know just what your master data should look like. They will examine it and provide a systematic approach for your master data team to institute procedures. This will promote optimal levels of functionality not just for SPL but system wide. They understand that incorrect or partial data points hold up the screening process and lead to increased trade risk. They will work to ensure that your master data is clean and complete, while adjusting parameters and limitations to give more definite results.
How SAP GTS Automates Vital Screening Processes
The screening functionalities in SAP GTS help automate your list updates and screening actions. Then you can look at clients, financial institutions, individuals, subcontractors, and vendors while generating alerts for any positive “hits” so that immediate action can be taken. The goal of any screening processes is to catch 100% of any of the true identities on the lists. It is vital to get this right. The risks of an incorrect screening come in many forms, including fines, penalties, potential loss of licenses, and being added to an SPL or denied persons list yourself.
Any automated screening process will compare sanction lists from your impacting government agencies, as well as international agencies. Your master data is comprised of all your business partners, and you want to be able to accurately detect any vendor, person, or even employee that appears on these lists. The success of any screening list automations depends on getting your master data in a clean and accurate state. When inconsistent data has been purged, and subscription-based data introduced, screening becomes a highly evolved business process that sets you on a course to achieving full regulatory compliance.
Savvy Compliance Through More Accurate and Precise Screening
The millions of business interactions that occur as part of international trade make automation a requirement. It’s the best way to handle heavy volumes of transactional data while monitoring for strict compliance. This is accomplished by using multiple algorithms to identify misspellings of names, businesses, and other transactional data points.
Customizations within SAP GTS reduce false hits and missed true hits. This cuts lost time, revenues, and resources to investigate false hits.
The documentation generated by these automated screening processes produces an audit-friendly environment. When aligned with screening processes and industry trade compliance standards, your record keeping will be top-notch, able to meet the requirements of even the most demanding audit. This takes special skills and the help of an experienced partner.
How to Achieve Restricted Party Screening Perfection
Your SAP GTS implementation must address SPL screening precisely. A good implementation partner will know the limitations of SAP GTS algorithms, and give realistic implementation goals and business practices. They’ll help reduce false hits. They’ll bring an SAP GTS specialist to the table, sharpening the entire screening process and getting you to as close to 100% true hit accuracy as possible.