

What is Restricted and Denied Party?
Government agencies as well as International organizations publish lists of entities and companies that are denied or restricted from doing business with. In the event a company, entity or person on one of such lists appears to match a potential party in an export transaction, additional due diligence is required before proceeding.
Typically, depending on which list the match was found, a match would indicate the either of the following situations:
According to agencies which publish the denied and/or sanctioned party lists, prior to taking any further actions, companies and organizations are to consult the requirements of the specific list on which the company, entity or person is identified by reviewing the webpage of the agency responsible for the list. Violation of the regulations would cause criminal and administrative penalties against the companies and organizations. Moreover, violators may be subject to denial of their export privileges, which essentially means the company is prohibited from participating in any future transaction. It is also noteworthy that the company business reputation would be severely damaged resulting from a bad publicity of a non-compliance.
In the U.S., government agencies generally add the entities, individuals and companies to the restricted party lists for several reasons. They commonly define such reasons as in the following:
Companies and organizations enjoy using applicable license exceptions in their transactions when the export license requirement exists. However, in most instances, license exceptions that are otherwise available for the export, re-export or transfer (in-country) to a party cannot be used if the party is listed in the denied party lists. Rather, such transactions require an export license and are usually subject to a policy of denial.
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