It all started with a data breach for Quest Diagnostics.
After that, its 11.9 million patients were affected as an unauthorized user gained access to their financial data and social security numbers. Fast-forward to 3 years later, and the case still is one of the most significant cautionary tales for reminding companies to strictly screen the partners they work with as much as they screen the employees they hire. Your partners’ controls and values do not necessarily reflect the high level of internal controls and ethical standards you practice. Because of this, watch list screening has not only become more stringent and more challenging than ever — but also become even more important.
As the U.S. government continues its highly visible use of denied party lists, it has become imperative that your company screen the vendors, suppliers, and other third-party partners that you might do business with. Screening your third-party partners is a process that must be done with due diligence watch lists, databases, and other resources. By collecting and comparing data about your third parties, your company gets to understand their ownership structure, history, adverse media reports, connections, and past litigations, among others. Listed below are examples of what the data the Chief Compliance Officer and the compliance team must look for:
Through these data, the CCO and the compliance team can understand and even predict the risks that might ensue from working with that third party — from corruption to money laundering, cybersecurity, terrorism funding, etc.
Watch list screening data, however, is still raw in form. How to assess this data and make sense of it in a strategic manner is the next step in modern corporate compliance.
Effective modern corporate compliance is more than just having access to a vast amount of data. It also requires interpreting that data to make wise decisions. Here are some steps you must not skip when making sense of your watch list screening data.
Understand the prospective vendors’ risks in relation to your own. Your own company has its own compliance risks as most companies do. You must inherently know these risks so that you can assess possible compliance lapses between you and your prospective vendor. It goes without saying then that you must thoroughly know everything possible about who your third parties are before you formally engage in business activities with them.
Put policies and procedures in place. Upon discovering the risks a specific vendor might pose, you have to make a number of decisions as to whether or not to use that vendor, apply extra precautions like providing extra oversight or approval steps for high risk parties, or cut ties with the party altogether.
Conduct regular audits on your program’s effectiveness. Once you have chosen a vendor, periodic checks must be performed to ensure that the program runs as intended and that it is streamlined to avoid any vendor risks and is aligned with all compliance measures.
While all these processes can be tedious when done manually, companies have the option to hire a screening partner or implement a watch list screening technology that can automate watch list screening.
SAP Watch List Screening is designed to help companies assess potential risks on an exception basis to avoid high-risk businesses, individuals, and entities before you formally engage in business activity with them.
SAP’s restricted party screening software simplifies watch list screening — improving vendor compliance and reducing the cost and effort of third-party due diligence.
The technology uses a SaaS model that simplifies screening, provides instant access to up-to-date watch lists, streamlines uploads, and accelerates time to value. It automates compliance checks across critical sales and procurement processes to improve results and decrease supply chain delays. This helps companies avoid partnerships and relationships with sanctioned individuals and entities and reduce the risk of noncompliance business-wide.
Designed with restricted and denied party screening, the technology allows for real-time compliance checks for order-to-cash and procure-to-pay processes, automated screening of restricted or denied parties with inline process blocking and release, and ad-hoc screening for extended use cases.
Other benefits include:
While implementing SAP solutions might sound like a lot of work, companies like Ropaar can assist and guide you through your journey based on our prior experience in delivering trade compliance and denied party screening solutions.
At Ropaar, we have helped various companies from across different industries to automate their watch list screening processes using SAP technologies. We have helped them assess their unique landscapes and implement cutting-edge SAP solutions to help them comply with stringent standards.
By leveraging Ropaar’s years of experience in watch list screening, you can be confident that your organization can overcome current and future global trade challenges. Contact us to learn more about our solutions and services.