Given the volume of restricted party entities, coupled with the fast-paced logistics processes found in most organizations, screening a customer base manually is inefficient, and may be impossible.
Restricted party screening (RPS) is the process that an organization goes through to ensure it is not engaging with a government sanctioned party.
Many organizations have embraced technology and acquired a solution for managing creening. Given the volume of restricted party entities, coupled with the fast-paced logistics processes found in most organizations, screening a customer base manually is inefficient, and may be impossible.
The most important feature of a restricted party screening (RPS) solution is the ability to effectively compare trade parties with current denied party lists. It is imperative that these lists (also called trade content) are complete, accurate, and updated regularly. There are numerous global lists which must be referenced by exporters when conducting international business. With the proliferation of government agencies and the frequency with which these lists are updated, organizations can experience a significant productivity drain if their compliance team is attempting to manage this process manually. Taking several days to complete restricted party screening is not acceptable when an order must be shipped the same day. While performing screening against multiple lists ensures a higher level of compliance, adding more lists can slow the screening process. An automated RPS solution that allows variable list selection gives an organization flexibility when more in-depth screening is required. There are many third party providers that aggregate and maintain restricted party lists to allow organizations to focus on more strategic compliance activities. Look for an information service that provides accurate and complete content with frequent updates, preferably on a subscription basis. Your vendor should employ multi-lingual trade specialists to ensure the quality of the lists. The vendor should also provide tools, such as automated list loaders, so the electronic data can be integrated with your RPS solution without the need for IT assistance. There are numerous and continuously changing global lists which must be referenced regularly by exporters when conducting international business.
Ask these key questions to effectively design your new screening process:
- How many trading partners do you need to screen?
- How often will you need to screen them?
- Are your processes consistent?
Volume, timing and control are important factors to consider when developing requirements for an RPS solution. Most RPS solutions provide the option to manually enter trade party details through a web-based form. The user enters trade partner details, clicks the screening button and then views the results. This process is manageable for exporters who have a relatively low volume of screenings to perform. However, for exporters with anticipated volumes over 4,000 screenings a year, this can become quite tedious. Best-of-breed solutions provide a manual screening method as well as the option to batch screen hundreds, or even thousands, of partners at one time. This ability is critical, especially if you subscribe to multiple sanctioned party lists, or have an extensive and changing partner or customer base.
Another key factor is the flexibility of the system to set the screening frequency. Look for solutions that support screening at four different points:
- When the party to the transaction is known
- Anytime there is a material change in a party to the transaction (i.e., a new freight forwarder or intermediate consignee)
- Prior to each shipment of goods or provision of services
- When the restricted party content is updated by the government
The rules for when to perform a screening should be automated and not require any user interaction unless a match occurs. Any additions or changes to trade parties should initiate a rescreening of that customer, while any change to the restricted party lists should automatically induce a rescreening of all partners against the net change of the list. This level of screening automation takes the burden off your team and also keeps the customer database current and compliant for efficient order processing.
Look for an RPS solution that provides multiple ways to integrate and return status to any enterprise resource planning (ERP) systems and key users. Many RPS solutions today provide the capability to electronically interface data from an ERP system via XML. This real-time integration eliminates the re-keying of data and associated errors. A key element of electronic integration is that it should be bidirectional. Many RPS solutions do not send status messages back to an ERP system. For example, a flagged trade party must be communicated back to an order management system so that the order is put on hold. If you have low screening volumes, or limited technical resources for integration with your ERP, look for a solution that supports a batch data transfer using a spreadsheet.
Finally, users should be able to log-in and screen directly from any web browser. Look for solutions that provide simple, ad hoc screening capabilities that allow you to distribute this capability to your Human Resources, Shipping and Receiving, Reception and Sales organizations.
With shrinking IT budgets, total cost of ownership (TCO) is a critical consideration. Look for a screening solution that is delivered on-demand via a subscription model and that employs a rapid implementation methodology for the best value. Software as a Service (SaaS) on-demand applications can virtually eliminate new investments in hardware, software and data centers. They also reduce the burden on IT and allow more strategic investments in technology infrastructure and resources. Gartner concurs, saying “In the current economic climate, SaaS technologies will allow budget-conscious exporters to access all of the tools they need to establish a strong compliance program.” A solution with a rapid implementation methodology will lead to faster time to value and productivity for users. A focus on configurations rather than customizations make it possible to quickly roll out, and eventually upgrade the system. Integration points that rely on XML and open standards will also make it easier to connect with your critical systems.
You have a potential match — now you must manage the resolution process. Look for screening solutions with workflow tools that provide event-driven notifications, task visibility and hierarchical exception management. Workflow helps users efficiently manage processes, assign tasks and escalate screening issues as required. Event driven notifications are triggered when certain events occur or could potentially occur. These proactive alerts help organizations and compliance officers with improved planning and response time for significant events, such as when many lists are updated on the same day. Task visibility gives insight into work volumes with features such as task monitors, dashboards, and team based work queues. The most flexible solutions automate the resolution process as much as possible and then rely on exception handling workflows for outlying cases. Global companies will often have more than one compliance expert for different business units or product lines. By properly allocating and escalating tasks, these experts are able to manage on an exception basis, improve overall accuracy,and enhance compliance.
Scott Byrnes is vice president of marketing at global trade management solutions provider Amber Road, formerly Management Dynamics. Amber Road’s cloud based, on-demand platform helps organizations comply with country-specific trade regulations as well as plan, execute and track global shipments efficiently and profitably. For more information visit www.AmberRoad.com or call (201) 935-8588.