The agencies that administer U.S. export control and sanctions laws maintain various prohibited party lists. These lists contain names and other information on drug traffickers, weapons proliferators, terrorists, members of oppressive regimes, and other parties with whom exports and other transactions are restricted and, in many cases, altogether prohibited.
The Departments of Commerce, State, and Treasury have combined multiple prohibited party lists into the Consolidated Screening List (“CSL”), available at https://2016.export.gov/ecr/eg_main_023148.asp
Awareness of the scope and volume of designations on the CSL is important to assessing respective risks. Relevant here, analysis of December 26, 2017 CSL data shows:
- there are a total of 8,794 designation targets;
- 49% of all targets are individuals;
- 75% of all designations are under Treasury Department programs;
- 6% of all Treasury targets are designated under more than one Treasury program; and
- at 18% of all CSL designations, the Specially Designated Narcotics Kingpin Sanctions Regulations have the greatest number of targets.
Companies involved in international trade often encounter parties to a transaction with names that potentially match a designation target. Properly validating a potential match is critical because each presents the real chance of a violation.
As explained on the CSL website:
“In the event that a company, entity or person on the list appears to match a party potentially involved in your export transaction, additional due diligence should be conducted before proceeding.”
Such due diligence ordinarily entails validating the date of birth, place of birth, nationality, and address information known about parties to a transaction with potential CSL matches. However, this information is not available for every match. More specifically, the CSL data shows that, overall, 84% of individual target designations contain date of birth information, 54% contain place of birth information, 18% contain citizenship information, and only 60% contain address information. These percentages vary substantially between agencies, especially for date of birth and address information on individual targets:
- State Department designations do not contain date of birth or address information.
- All Commerce Department designations contain addresses, but no date of birth information.
- 95% of Treasury Department designations contain date of birth information and 56% contain address information. Of these, several hundred only provide the year of birth and/or country of residence.
The poor quality of CSL information often presents an obstacle to due diligence that adds substantial time and cost to the prohibited party screening process. As a further result, many companies must work directly with cognizant government agencies to validate potential matches, especially in cases involving an exact name match or multiple similarities to a designation target.
An interactive CSL data analytics tool, based on the December 26, 2017 version of the CSL, is available at www.goldsteinpllc.com/compliance-analytics.
*The above is not intended as an exhaustive list of restrictions that may apply to a particular transaction nor advice for a specific transaction because the specifics of an individual case may implicate application of other U.S. laws as well as foreign laws that carry added or different requirements. In addition, U.S. export control and sanctions laws are frequently subject to change. Such changes can affect the continued validity of the information above, which is based on U.S. law existing as of January 1, 2017. For these reasons, assistance from a qualified attorney competent to advise on such matters is highly recommended. Matthew A. Goldstein is an International Trade Attorney in Washington D.C. licensed to practice in the District of Columbia. He can be reached at (202) 550-0040 and Matthew@GoldsteinPLLC.com