Denied Party Mayhem

In the current environment of cross-country terrorism and political unrest, companies need to be very vigilant about their international dealings. Dealing with denied parties can lead to legal wrath of government and bad publicity. In fact, doing business with these parties can result in a major disruption in the operations, revocation of trade privileges, and even imprisonment of executives (Christensen, L). It does not matter if the mishap of dealings with blacklisted entities is intentional or because of improper employment screening, poor internal security, or the acceptance or distribution of "tarnished" donations.
Dependent of the type of business, there are multiple denied party lists. For our present discussion, we are going to focus on exporting companies’ goods to international market; this would result in screening their international customers against the prohibited parties list. The prohibited parties list is reflective of several lists of restricted or blacklisted entities with which an exporter is prohibited from doing business under most circumstances (buyusa.gov):

* Specially Designated National list maintained by Office of Foreign Assets Control

* Denied Persons and entities lists maintained by Bureau of Industry and Security

* List of Parties Debarred for Arms Export Control Act Convictions maintained under the International Traffic in Arms Regulation

Kenneth Juster, the under secretary of Commerce for Export Administration, clearly stated, “I think it is clear especially in the aftermath of September 11 that no company wants to see its name in the headlines of the Washington Post or any other newspaper as the source of some critical item or technology that facilitated an act of terrorism.” (ecustoms.com). It is very clear that US government is putting the burden on the exporters and cautioning them that they will face more vigilant inspection of outbound shipments and increased attention to compliance requirements. Juster later argued that complying with export controls, securing computer networks, and protecting critical infrastructures are not just corporate responsibility issues, but also key to the maintenance of national security (uga.edu).
There are different government agencies that keep a list of restricted or blacklisted parties. In addition to the agencies listed above lists are maintained by States Department, DHS, FBI, FDA, US Secret Services, and DEA. Collectively numerous lists should be incorporated in the screening for company’s customers. In a recent news bulletin, the author provides an account of a company that has engaged JPMorgan Chase Vestera’s trade expertise and technologies to review its customers’ and suppliers’ names and addresses against 50+ denied party lists (jpmorganchase.com). The agencies that create these lists are also actively enforcing them with the help of law enforcement and US Justice Department.
Regardless of the reason that these agencies are maintaining the denied party lists, companies would need to comply to the rules and regulations of not doing business with these companies or individuals. The risk of failing to comply with these regulations is extremely high and can directly affect the continuity of a business. If a company were found under the cloud of such dealings, they would find their operations in direct jeopardy due to costly penalties and legal suits against the company. According to one estimate, failing to screen listed denied party can result in a fine from $50,000 to $1 million (securitymanagement.com); this can be a heavy drag on companies’ operations.
The initiative for screening for denied parties is an expensive investment. However, this should be seen as the contribution to the business continuity. In fact, it may be valuable to link the following of these regulations as part of overall Business Continuity Plan; the denied party regulation can easily be classified as direct regulation – it has a direct impact on the operations of a company. It would be wise for companies to follow organizational actions in screening for denied parties.

* Top management committed for implementing a denied party screening system

* Synergic approach to implement the system across main operation and fringes

* Maintenance of effective communication across organization

* Inform and train employees about the initiative

* Utilize the capabilities of their human capital

* Lessons learned system to share information about system to screen denied parties

To support the above, we can look at two challenges for implementing a system for screening denied parties.

1. Companies find it challenging to fully understand and comprehend their customer base; customers’ data is maintained in large and perforated databases. The creation of a centralized repository for your customers would face challenges like data quality, data redundancy, missing information, and reluctance of inter-departmental sharing.

2. Denied party lists are very volatile. The agencies, which are maintaining these lists, can change the information on the lists without informing the users of the lists. It is companies’ responsibility to remain vigilant and keep their denied party lists current. The risk of ignoring this is extremely high.

In face of heavy expenditures, management should get some comfort in the fact that the need for complying with this regulation is not going to disappear. If anything, there will be more restriction on the company, for not doing business with restricted entities. Additionally, when a multinational company opens an international office, they will get more country specific lists of restricted or blacklisted parties.
Some companies are looking at outsourcing this operation to external entities that specialize in screening for denied parties. This may be a good alternate, only if companies engage a reputed firm that has tools and techniques to handle large volume of data and screen for potential risky parties through multiple lists. Contract for handling this regulation should spell out the sharing of liability with the outsourced party; this is a classic example of risk sharing. Additionally, companies should have their legal department look at all large dealings with international entities; this would provide a second level of assurance that companies are not dealing with denied parties.
References:

Buyusa.gov. Legal Due Diligence. Retrieved on June 26, 2007. From http://www.buyusa.gov/harrisburg/legal.html
Christensen, L. (2007). Restricted Party Screening: Who Are You Doing Business With? Retrieved on June 26, 2007. From http://www.inboundlogistics.com/articles/itmatters/itmatters0507.shtml
Ecustoms.com. You Must Comply. Retrieved on June 26, 2007. From http://www.ecustoms.com/vc/yourcompany.cfm
jpmorganchase.com. (2006). AJS No Longer “Fed Up” with RPS Screening Challenges. Retrieved on June 30, 2007. From http://www.jpmorganchase.com/cm/ContentServer?cid=1159296999985&pagename=jpmorgan%2Fts%2FTS_Content%2FBlank&c=TS_Content
securitymanagement.com (2002). Who’s the Buyer? Retrieved on June 30, 2007. From http://www.securitymanagement.com/library/001235.html
state.gov. Foreign Terrorist Organizations. Retrieved on July 1, 2007. From http://www.state.gov/documents/organization/65479.pdf
Uga.edu. The Center of International Trade and Security Export Control Newspaper No. 1. Retrieved on June 26, 2007. From http://www.uga.edu/cits/documents/html/xcnews01.htm

The politics of immigration debate

The stakes are very high with the debate of illegal immigration and the temporary worker program. Based on a very recent poll shown on the CNN website the country seems to be divided on this issue and for about 57% of likely voters this issue is very important - they will base their voting decision based on the outcome of immigration debate. The question that is haunting a lot of political strategists and advisors would be to figure out the stronger side. The two obvious sides of the equation are one who supports the staying of illegal immigration and the other that feverishly opposes it. On one side we have the John McCain's of the senate and other we have Tom Tancredo's of house - both republicans and both very passionate about their stands. Americans do have to realize that at the end it’s all about politics and the reality is that this is an election year. Everything that comes out of the politicians’ mouth is geared towards their political ambition. McCain is perceived to be a presidential candidate, so he is going after the Latino block. He is hawk on defense and Iraq but is liberal on immigration. Whereas the likes of Tancredo are going after the more conservative base of republican party hoping to galvanize them on the issue of illegal immigration - similar to the "American Values" pundancy.

When we hear these politicians are we hearing the fact or spins? Most of the political discussions that we hear are spins geared towards getting more votes. Sadly that makes our job more difficult, deciphering true issues out of any political debate can be very difficult. The ground reality in this matter is very clear and simple - if we are willing to look at it, we will very easily find what is on stake. It’s the economy - plain and simple. Economy needs labor and these illegal immigrants are providing it. We need to realize this and we need to tackle it sanely rather then emotionally. One can be very emotional about the whole issue that these people have broken immigration laws and all. Of course we don’t want to encourage people breaking any laws - we don’t want people breaking traffic laws but we don’t put people behind bars if someone is speeding. We do put them behind bar if they have done a capital crime. Is breaking immigration law a capital crime? House bill is trying to make it one.

In my humble opinion the house has stirred up this mess by having a very simplistic approach to the issue of illegal immigration. You have to be a good cop / bad cop here, using a stick and a carrot.

At the end, I would like to emphasize the need to look at the immigration in a broader scale, not in a very narrow way in which the likes of Tom Tancredo are looking at it. The fact is plain and simple, economy needs labor - if Americans are willing to provide it then its well and good, otherwise there would always be on influx of labor from other countries. Can we make them come here legally - through some guest worker program, or are we going to keep the status quo? Are we going to uproot 11 Million people out of American society or should we provide them AMNESITY. Surely we need to have a debate - but as President Bush has stated this has to be a 'civil' debate.

Immigration fiasco - A thorn in the foot of Big elephant

One of the great thing about American Politics is that No one stays on top for long time. Americans tend to favor the underdog, which nowadays are the donkey riders. Since the mid 1990s, when GOP stole the majority from democrat's, Republicans have enjoyed a decade of pushing their agendas through and keeping the capital hill in their hands. But now the shift is in the air. With sagging numbers of President, gloomy situation in Iraq and disarray on domestic policy; republicans seem to be in a bit of a trouble. Even without the debate over immigration issue, political pundits were debating the shift in the power over capital hill. And then came 500,000 Illegal Immigrants on the street of LA, and everyone is up in their sleeves over immigration issue.

Last week Senate majority leader Senator Frist gave an ultimatum to Senate Judiciary Committee to produce a comprehensive immigration reform bill. He had his own version of boarder security bill that was to be put forward in case of failure from SJC. He may have hoped that SJC would fail to produce anything, but interestingly SJC did come-up with a bill that not only handles the Boarder Security but also the issue of undocumented illegal aliens living in USA. This has put the senate majority leader in a tough position. He tried to twiddle through by proposing that he will put forward both his and SJC bills on the floor.

Now the genie is out of bottle and Senate is faced with a two week long howling debate on immigration. This is a good news for democrats and republicans are faced with tougher days ahead of them.

Question is why would this have a negative impact on GOP?

As mentioned earlier, GOP was already loosing their battle in polls against democrats. Now this immigration reform bill is dividing them more - putting a divide between economic conservatives and cultural conservatives. On one side companies and capitalists want to get more immigrants into United States - as this is good for economy. Very few people can argue that immigration has bad impact on economies. One of the biggest reason behind the growth in US economy is immigration. But, and interestingly there is always a 'but', for cultural and religious conservatives immigrants bring a cultural shift in the American Society. This argument does have a merit, immigrants do bring a diversity in social fabric. The pros and cons of this are beyond the scope of this discussion, so the writer will refrain from putting his views on the issues of cultural impacts of immigration.

Democrats must be very happy with the way things are going. They don't have to do anything and they will most probably win the majority on Capital Hill. Interestingly, for most of the issues democrats do not have any clear message - but does it matter? At least not currently. Republicans are their biggest enemies right now, and unless they unite its going to be difficult for them to sustain the majority in capital hill. And this immigration issue is to hot for them to ignore the differences and come up with a united voice.

As an African proverb goes, "when elephants fight, it is the grass that suffers."

Legal Immigrants - b/w rock and a hard place

With 500,000 people on the streets of LA and thousands of other voices running through major cities of USA, it seems very obvious that there are a lot of illegal immigrants or supporter who want to fight the House approved Bill. Their intension are not just to raise their voice against the House approved bill that is tougher on illegal immigrants but to send a message across to lawmakers that they are not going to sit idle in shadows and let the Washington decide on their faith.

For good or for bad the issue of immigration is on the fore front, at least for now. There is an atmosphere of anticipation, regret, tension and a mishaps. People on both sides of this issue are trying to be energized and show their support. It looks like the case is setting up to be "Either you are with Illegal Immigrants or against them". And sadly what seems to be happening is that immigration reform is being hijacked by the cases of illegal immigrants. In short the US immigration policy is becoming the Illegal Immigration Policy.

In the mist of all this discussion are people, like me, who came to USA legally and want to go towards the naturalization path through legal ways. What is most ironic in this whole discussion of immigration reforms is that US immigration laws are very complex and people who are trying to get to USA through legal path find it very difficult. And once you have immigration status it is still very difficult to get the immediate family across the land of promise and opportunity.

To handle issues of illegal immigration and broken boarders the lawmakers have to reform the legal immigration not give amnesty to illegal immigrants. Make it easier for people to come here legally and live the American dream. Those of you who are aware of red and green channels for customs would find the similarity very ironic. It looks like the path of legal immigration is red channel and the path for illegal immigration is green channel. Whereas it should have been the other way around.

I am not proposing here to open the boarders, on the contrary - the boarders have to be sealed and we need to know who is coming and why. But don't stop people who are law abiding and want to just live their lives legally.