The Different Sanctions Lists: Denied Persons Lists
In today’s world, trade is never as simple as a handshake and a shipment of goods. Global traders have the heavy responsibility of investigating the legitimacy of each entity in their supply chain and refusing to conduct business with anyone convicted of trade law violations. These offending entities are found on state-maintained sanctions lists.
What are sanctions lists? What are the most important sanctions lists to check before engaging in trade? Who gets on a sanctions list, and how? Let’s dive into the complex world of sanctions lists. Stick with us until the end, and we’ll offer some game-changing tips and tools for a safe and efficient way to conduct watchlist screening.
Sanctions Lists – What are They and Who Gets on the List?
Sanctions lists flag restricted entities, including individuals, companies, and even entire countries. These lists include violators of trade policy and aim to bar organizations with links to terrorism, trafficking, and other illegal activity, from international trade. Various governmental departments manage these lists, which require daily maintenance. Additionally, these agencies regulate and enforce the laws governing these lists. As a result, traders are legally obligated to screen potential business partners against these government lists before engaging in trade.
Different International Trade Administration Sanctions Lists
Here is a breakdown of the most common sanctions lists maintained by the International Trade Administration, U.S. Department of Commerce. Please note that each trader is subject to both domestic and international trade laws. Lists vary from country to country, depending on the nation’s foreign policy.
Department of Commerce – Bureau of Industry and Security Lists
The Department of Commerce manages several types of sanctions lists through the Bureau of Industry and Security. These sanctions lists include:
The DPL list includes all entities, including individuals, that have lost their exporting privileges due to some violation or another. Any transaction with these entities that would violate the nature of their restrictions is prohibited.
Parties on the Entity List are not expressly barred from trade. Rather, their being part of a transaction triggers the need for the parties involved to apply for additional licensing. The Entity List outlines which specific licenses must be obtained along with the policies that should govern the transaction.
The Unverified List includes parties who remain unverified by the Bureau of Industry and Security (BIS). When an unverified party is involved in an intended transaction, it raises a ‘Red Flag,’ which needs to be addressed by the participating parties before going through with the deal.
The Military End User List outlines parties who trigger the need for additional license requirements when involved in a transaction involving items regulated by Export Administration Regulations (EAR). “These parties have been determined by the U.S. Government to be ‘military end users,’ as defined in Section 744.21(g) of the EAR,” says the BIS.
Department of State – Bureau of International Security and Non-proliferation
The Department of State manages one specific sanctions list through the Bureau of International Security and Non-proliferation.
Nonproliferation Sanctions aim to limit the ability of foreign individuals and entities to produce nuclear weaponry and other weapons of mass destruction.
Department of State – Directorate of Defense Trade Controls
The Department of State manages another targeted sanctions list through the Directorate of Defense Trade Controls.
AECA Debarred List
The AECA Debarred List includes parties that are restricted from participating in the trade of defense articles, defense technology, and defense services. These entities “have been convicted of violating or conspiracy to violate the Arms Export Control Act (AECA),” according to the Directorate of Defense Trade Controls.
Department of the Treasury – Office of Foreign Assets Control (OFAC)
The Office of Foreign Assets Control maintains several sanctions lists, and they offer a special Sanctions List Search tool. Here are some of OFAC’s sanctions lists:
Specially Designated Nationals and Blocked Persons List (SDN)
“OFAC publishes a list of individuals and companies owned or controlled by, or acting for or on behalf of, targeted countries. It also lists individuals, groups, and entities, such as terrorists and narcotics traffickers designated under programs that are not country-specific. Collectively, such individuals and companies are called ‘Specially Designated Nationals’ or ‘SDNs.’ Their assets are blocked and U.S. persons are generally prohibited from dealing with them,” explains the U.S. Department of Treasury.
Foreign Sanctions Evaders List
As the name implies, the Foreign Sanctions Evaders List includes foreign parties who have either succeeded in, attempted to, or conspired to engage in deceptive illegal trade with sanctioned parties.
Circumstance-Specific Lists
Beyond the above sanctions lists, there are several lists applying to more specific circumstances. For your reference, here are a few more sanction lists to be aware of:
Correspondent Account or Payable-Through Account Sanctions (CAPTA) List
Non-SDN Menu-Based Sanctions List (NS-MBS List) - This list has been recently updated to include entities on the Protecting Europe’s Energy Security Act of 2019 (PEESA) list.
Non-SDN Chinese Military-Industrial Complex Companies (CMIC) List
Heightened awareness of all the different sanctions lists can be overwhelming, intimidating, and, frankly, scary, especially for startups. How can your organization – whether you’re new to global trade or a long-time exporter – ensure you’re making safe and compliant transactions?
Denied Party and Watchlist Screening Software
At OCR Global Trade Management, we offer powerful watchlist screening software to provide the link between your business and safe transactions. Our comprehensive set of global watchlists from government and non-government sources will allow you to screen all individuals, organizations, and countries before going into business.
Ready to save yourself time and stress while cutting down the risk of unsafe and illegal transactions? The sales team at OCR can help get you started. Get in touch to request a demo or download a free factsheet.
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