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Can You Automate “Lists of Concerns and Denied Persons” For Your Global Channel?

September 30, 2019

By Jim Holland, Sr. Product Marketing Manager

In 2018, the U. S. exported over $2.5 trillion in products to 53 countries according to Balance.com and the U.S. Foreign Trade. These exported products make up a wide range of capital, consumer, and industrial goods we consume and use every day.  Many of these exports are manufactured and distributed by High Tech and Semiconductor companies.

With 75% of the world’s trade flowing indirectly, it is clear that companies prefer to use channel partners to move a majority of their products. With a vast array of channels offering your products, how does complying with the export laws regulating Parties of Concern or Denied Parties impact your business? What is it, and what can be done?

What is a Denied Party?

A Denied Party is a list created and maintained by government authorities/agencies that warns companies of those individuals or entities that they shouldn’t sell to. With denied parties, there is typically a strict denial of shipping privileges. U.S. individuals and companies are prohibited from transporting goods and providing services to the individuals and entities on these lists. These persons/entities present a higher risk to U.S. national security or foreign policy interests. Failure to comply and conducting business with denied persons can result in criminal or civil prosecution as well as denial of export privileges.

Who Are Parties of Concern?

Parties of Concern focuses on end-users that a government entity has not been able to verify in prior transactions. For companies, these issues have to be identified and resolved before the shipper, such as a channel partner or manufacturer ships products. The consequences of failing to address these could result in substantial fines.

What Should I Be Doing?

If your company sells through multi-tier channelsstart here. This free government site lets you search for parties of concern. Using information like this, you need to make sure your company is compliant and reduces any unknown impact on your channel.

Businesses conducting international transactions should perform periodic screenings to demonstrate that they are managing Denied Parties/Parties of Concern carefully.  Failure to comply and transacting business with denied persons can result in criminal or civil prosecution as well as denial of export privileges

How Model N Can Help?

To ensure compliance with those on the Lists of Parties of Concern or Denied Persons, Model N Channel Data Management (CDM) automates the review and validation of individuals and entities that are denied export privileges. This capability fully supports any corporate governance requirements and helps alleviate government scrutiny.

With Model N’s CDM organizations can:

  1. Automate the collection and management of global channel partner data
  2. Create a trusted system of record for channel sales
  3. Integrate current government denied persons content/lists with your channel data
  4. Identify, match and report on denied persons or parties for channel partners selling globally
  5. Validate compliance with export laws covering denied persons/parties of concern

To read more on Denied Parties or Persons of Concern, start here. For more on how Model N’s Channel Data Management solution can help you, go here.

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