Denied Party Screening: How to Check OFAC and BIS Lists

Why screening matters

Several US agencies maintain lists of individuals, companies and organizations that US businesses are restricted from dealing with. Some lists prohibit any transaction, others restrict exports of certain items or require a license. Penalties for violations can include large civil fines and, in serious cases, criminal charges, and enforcement does not depend on whether you meant to break the rules.

Screening also protects you commercially: banks and freight forwarders routinely screen parties, so a match can stop your payment or your shipment.

The main US lists to know

• OFAC sanctions lists (US Department of the Treasury): includes the Specially Designated Nationals and Blocked Persons (SDN) List. US persons are generally prohibited from dealing with listed parties, and OFAC's 50 Percent Rule treats entities owned 50% or more by blocked persons as blocked too.
• BIS lists (US Department of Commerce): the Entity List, the Denied Persons List, the Unverified List and the Military End-User List. They restrict exports, reexports and transfers of items subject to the Export Administration Regulations, in some cases requiring a license.
• State Department lists: for example parties debarred under the Arms Export Control Act and those subject to nonproliferation sanctions.
• The Consolidated Screening List: a free search tool from the US Department of Commerce's International Trade Administration that combines these lists in one place.

Who you should screen

Do not stop at the buyer's name. Screen every party in the transaction:

• The buyer or importer and their owners, where you can identify them.
• The consignee and the end user, if they are different.
• Intermediate parties such as freight forwarders, agents and distributors.
• Banks and other financial parties involved in the payment.
• The destination country and the intended end use of the product.

How to screen, step by step

• Collect complete details: full legal name, address, country, and any alternative names or trade names.
• Search each party. Use variations of the name (with and without "Co., Ltd.", abbreviations, different transliterations), because lists often contain aliases.
• Review matches carefully. A name match is not always the same party: compare addresses, countries and other identifying details.
• If you cannot rule out a real match, stop the transaction and get advice from an export compliance professional before proceeding.
• Keep a record: note the date, the lists searched, the result and who reviewed it. Repeat screening periodically for ongoing customers, because lists are updated often.

Red flags to watch for

Beyond list matches, government guidance highlights warning signs that a transaction may be problematic, such as:

• The customer is reluctant to share information about how the product will be used or who the end user is.
• The product does not fit the buyer's line of business or the destination's needs.
• The buyer is willing to pay well above market price or pay in cash for expensive goods.
• The shipping route or destination makes no commercial sense, or the delivery address is a freight forwarder.
• The customer declines routine installation, training or maintenance services.

Frequently asked questions