Global trade introduces tremendous growth opportunities that, if not managed properly, can also introduce significant risk. Global trade is governed by an endless stream of rules, regulations, and policies. At any time, for political or security reasons, these requirements can limit or prohibit trade with certain companies, countries, organizations, and even individuals.
Thankfully, prohibitions are detailed in denied party (DPL) or sanctioned party lists (SPL), which are regularly updated by government agencies. Keeping track of these lists can be tough, since trade regulations change so often, as can the number of parties in each transaction, the sheer volumes of transactions, and the number of lists that need to be checked. The massive amounts of data involved make it easier to fall into non-compliance, hitting current and future trade.
Non-compliance can have a dangerous effect on businesses, countries, and foreign relations. In 2014, an inert Hellfire missile shipped to a party in Cuba by mistake. The shipping firm accidentally shipped the missile to Cuba after it had departed Spain. Despite being unarmed, this was considered to be a serious security breach, as all of the technical aspects of the missile were still intact.
The importance of preventing mishaps such as this is quite known, but the solution to this problem seems elusive. It is important to know what these lists contain, how to interpret them, and how to devise an automated solution to manage them.
Understanding Sanctioned Party Lists
The information contained within SPLs are critical to successful global business operations. It is important for international businesses to fully understand which parties these lists contain and how they will apply to their global operations. Some examples of the parties you will find on these lists include:
- individuals, including C-Level and Board members;
- Financial Institutions;
- Manufacturers; and
- Suppliers and vendors.
Any of the above items will need to be reviewed at the company and institutional level down to the minute details of, C-level, and board-member list reviews are critical. As people move from position to position, they bring their personal lives with them as well. Company names can be another frequently-changing item to review. In some countries, such as North Korea, the changing of a corporate name can be accomplished in a day. These variables work together to scream for an automated SPL screening solution.
Using SPL, domestic, import, and export transactions can be screened to determine if any trade participant or partner is on the list. Then businesses can avoid interacting with the denied parties in business activities or trade transactions. This helps to avoid the steep costs of violations in the form of fines, heavier duty levies, or being placed on the sanctioned list yourself. Developing and automating a sleek and effective SPL screening process is your protection against these threats.
Sanctioned Party List (SPL) Screening Process
Your screening process must account for a variety of factors in constant flux. The development of an internal SPL screening process lets importers and exporters see if any of their supply chain partners are on the SPL. This is accomplished in three fundamental ways.
- Accessing government-supplied lists online to search for and potentially locate a match. This is very labor-intensive and error-prone, as a successful screening depends on accurate information, so that all parties are investigated.
- Downloading the lists and maintaining them in Excel or Access for searches on an as-needed basis. The lists have to be downloaded and updated at a high rate of frequency to stay accurate, and the process contains the same errors and potential missteps as querying online lists.
- Utilizing a third party to provide consolidated lists or to conduct SPL screenings. For this to be successful, you need a live feed with the third party. Otherwise, costly delays of information can result. Also, many third parties have SLA timeframes that could take longer than you can wait.
Modernizing SPL screening to reduce human interaction while increasing automation is vital to long-term success. Introducing a software solution to remove mistakes from SPL screening is a required piece of the global trade puzzle for your business. SAP GTS is a system that addresses the shortcomings of each SPL screening method. It brings an automated approach to improve SPL screening while removing errors from the process. SAP GTS monitors every step of each transaction, regardless of volume, ensuring that SPL screening is achieved accurately, consistently, and quickly.
SAP GTS SPL Provides Automated Screening
The automations the SAP GTS provides with SPL screening are a game changer for global business. SAP GTS automatically accesses, and uploads, the sanctioned lists provided by the third party data providerThis ensures your data is accurate and complete, greatly reducing your risk of violating sanctions.
One key advantage to SAP GTS is that it uses automated searching and matching to identify restricted parties, if you have the master data in place. That way, your screening happens in the background and can generate alerts when a trading partner is found in an SPL. That automation gives you significant savings in time, process costs, and reduced fines and penalties from to illegal trade transactions.
SPL screening with an SAP GTS solution gives you an edge in all your global trading.
SPL Screening Experts Help Create Innovative Solutions
When you engage in global trade, you need an automated SPL screening tool. It should include the master data you need to reduce errors. That gives you tighter levels of compliance through ongoing monitoring and screening. SAP GTS is a great way for importers and exporters to conduct SPL screening. The flexibility offered by an SAP GTS SPL solution gives you an edge when looking to enter new or emerging markets within your industry, or branching into other industries.
This complex challenge requires SPL project expertise. Pinary brings its knowledge of SPL screening to global business challenges. We build solutions for your exact business and industry requirements, helping your business reach its strategic goals by reducing the false hits and increasing accuracy to match the true hits.