What is Risk Management?

When mentioned in context of export compliance, risk management may refer to compliance with restricted party screening regulations, but more specifically to sanctioned ownership screening rules, including OFAC’s 50 percent rule, along with issues of image and reputation protection and risk management related to politically exposed persons (PEPs).

In view of the fact that many international entities can have changing and complex ownership structures that may end up benefitting sanctioned and denied parties, these guidelines prohibit organizations from doing business with organizations that are owned—in whole or in part—by entities on sanctioned ownership screening lists. Researching each organization and entity that a company does business with to not fall afoul of these rules is also known as risk management.

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What is sanctioned ownership screening?

This is about vetting corporations and entities an organization does business with to parse their ownership structures, and then compare them against watch lists to identify potential bad actors with whom they are not supposed to enter into any transactions.

Are there any lists you can reference for sanctioned ownership screening?

Sanctioned ownership screening differs from other forms of denied party screening – including ones enforced by OFAC itself – in that there is no formal list of corporate entities with sanctioned ownership structures that organizations can refer to and make compliance decisions against.

OFAC puts the onus of researching an entity’s ownership structures entirely on companies. This can add a layer of complexity to the compliance process that can be challenging to manage with traditional export compliance and denied party screening processes. Solutions equipped to be able to handle the demands of OFAC’s 50 percent ownership rules and sanctioned ownership screening can help streamline and simplify the process for organizations, saving time and resources while also helping them remain compliant. Having a robust risk management solution can help organizations comply with these rules.

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