Marcura Compliance has established a unique cargo screening process that encompasses data stewardship and validation actions guided by stringent data governance principles.
This process effectively manages intricate screening requirements, leverages multiple data sources, and facilitates data enhancements, while actively monitoring 130+ trade control lists and 1,323 sanctions, regulatory and other bodies lists. By undertaking these labor-intensive and time-consuming tasks on behalf of its customers, Marcura Compliance navigates complex regulatory environments.
The primary goal is to provide comprehensive screening results and identify potential risks. The ultimate decision to accept or deny a trade lies with the customer, based on their risk appetite and due diligence requirements.
Let us take a closer look at the Marcura Compliance Cargo Screening service.
Cargo Screening Process Q&A
Q1. What is Marcura Compliance’s role in the cargo screening process?
We:
maintain an extensive database and enhanced validation process for trade compliance to help reduce counterparty, location & cargo-related risks;
play a vital role in taking over admin task of our customers, reducing workload and invested time to further alleviate the challenges posed by complex, manual, and detailed screening requirements;
use multiple sources to clean, validate, enhance and update information;
monitor the database, including regulatory bodies, RSS, open domain information, and feeds identified through traction data analysis;
ensure that the cargo screening process addresses Knowing Controls, Codes and Countries;
provide factual due diligence reporting and screening results;
present screening facts based on business rules.
Q2. What is the purpose of cargo sanctions compliance screening performed by Marcura Compliance?
To mitigate the risk for our customers, we perform in-depth data stewardship and screening on agreed data points as per the customer’s subscription package. The primary objective is to offer an end-to-end service that alleviates the challenges posed by complex, manual, and detailed cargo screening requirements.
The team utilizes multiple sources to monitor the database, including trade control lists and regulatory bodies, RSS feeds, open domain information, and feeds identified through transaction data analysis.
Q3: Can you provide a brief overview of the cargo screening request process flow?
The standard cargo screening process is outlined below:
1. Customer: to send booking file via email directly to [email protected] or potentially via FTP file providing the following basic cargo and name screening datapoints:
Cargo screening: BL Number, Container Number, HS Code, Commodity / cargo description, POL (Port of Loading) & POD (Port of Discharge);
Name screening: BL Number, Container Number, Trading Party Name (Shipper, Consignee, and Notifying Party) & Complete Address with City/Country.
2. Marcura Compliance: to perform review, data cleansing, enhancement, and validation;
3. Marcura Compliance: to screen relevant information utilizing multiple data sources;
4. Marcura Compliance: to revert with a screening output file that includes a screening summary.
In the upcoming months, the cargo screening functionality will be incorporated into our self-serve, front-end platform.
Q4: Why does Marcura Compliance cleanse & enhance data?
We have developed an extensive database and enhanced validation process for trade compliance to reduce risks and false positives.
To validate cargo descriptions, we use the HS code as well as other identifiers (i.e., CAS Number, TARIC code, etc.) along with the UN/ LOCODE, utilized to validate the routes. Through its processes, Marcura Compliance can extract unstructured commodity descriptions and data from booking files, flag missing or incorrect HS codes, and match commodity descriptions with the proper HS codes. After cargo description is matched with the appropriate HS code, it is screened against 130+ trade control and regulatory lists to identify dual-use, military, or high-risk goods. For proper export and import control, master data is updated regularly to identify any routing restrictions
Screening Lists and Risk Q&A
Q5. What is a Trade Control List?
The Trade Control Lists are export control lists or regulation lists imposed or maintained by regulatory bodies such as EU/US/UN, Export Control Regimes, and other-country specific regulators. We refer to 130+ trade control lists during the cargo screening process.
Q6: Why is it important to screen the cargo against Trade Control Lists?
Following are some of the reasons:
to restrict exports of goods and technology that could contribute to the military potential of adversaries;
to ensure compliance with international regulations;
to prevent illegal trade of certain goods and terrorism (i.e., dual use items that can have civilian and military purposes), controlled substance or embargoed goods;
to prevent proliferation (rapid increase) of weapons of mass destruction;
to prevent from civil or criminal penalties;
to protect national security interests by protecting certain technologies, sensitive equipment or military hardware from proliferation of falling into the wrong hands;
to prevent business risk for the company.
Q7: What are Dual-Use Goods?
Goods, i.e., items, technology or materials that are designed for commercial applications or for civilian purposes but can have military applications or potentially be used as precursors or components for weapons of mass destruction. Examples can include advanced materials, chemicals and biological agents, electronics and telecommunication equipment, nuclear materials and technology and certain advanced manufacturing technologies, such as 3D printing and similar.
Due to their potential for misuse or diversion, a large number of jurisdictions has imposed export control and trade regulations on dual-use goods.
Q8. How does Macura Compliance identify and highlight potential risks in the cargo screening summary?
We will utilize Alert Red and Alert Orange terminology to highlight potential risk. Alert descriptions are as follows:
Alert Red: is to notify the potential risk when:
HS code, Cargo description or Counterparties are restricted.
Alert Orange: is to highlight second level of screening requirements when:
Commodity is missing or ambiguous;
HS code is missing or invalid;
Only generic name or cargo are available;
Counterparty is missing, unclear, partially matching with sanction entity;
Counterparty is listed under other official lists (not sanction lists);
Address is missing, incomplete address or invalid address;
Route is missing;
Marked as “may be restricted” due to lack details to review false positive hit.
Q9: What actions are required for each remark or alert?
Marcura Compliance refers to “actions” as second level of screening. The following actions points can help you review alerts and decide on the subsequent course of actions as per your risk appetite:
a) Define an internal process to review alerts, for example:
if a hit is displayed relative to Dual use goods, then please review the purpose of use for the specific commodity by referring to the Shippers Letter of Instruction (LOI) or End-use Certificate of the respective commodity;
if a hit is on military goods, then verify the trade license and parties involved.;
if HS code is not matching or invalid or details are missing, please review and confirm the correct HS code or provide the complete commodity description;
if consignee/shipper/notify party name has a partial match to sanction list, then please request further documents, i.e., company’s official document or UBO/key management’s passport copy.
b) Refer to the details provided in the 'Alert Comment' and 'Sanction Details' columns to review the name/cargo and identify any potential risks for the business.
Cargo identification and screening Q&A
Q10: What is invalid HS code and when to add generic HS code?
HS code (Harmonised System code) is an international standard maintained by the World Customs Organization (WCO) and are identified by a 6-digit code. Marcura Compliance checks that the provided HS codes are correct and matching the commodity description.
To screen the cargo, we will add generic HS code if this detail is invalid or missing from the input file. This will also be marked on the output file, so that you and your teams are aware where we have added Generic HS Codes.
Q11: Is it be possible to proceed with cargo screening even if HS code is missing?
In such instances, there are two courses of action based on your pre-agreed Business Rules with Marcura Compliance.
Option 1: We can refrain from screening the specific line, marking the final result as 'ALERT ORANGE,' and prompts the customer to furnish the appropriate HS code or comprehensive commodity description.
Option 2: We can assign a generic HS code derived from the provided cargo description. Consequently, screening will proceed based on the cargo details and the HS code added by Marcura Compliance.
Q12: How to proceed if the booking line contains more than 1 cargo or HS code?
We will split the line accordingly and screen the newly split cargo with its HS code separately.
Location screening Q&A
Q13: Do you consider Port of loading and discharging countries for cargo screening?
Yes, we do consider routing, including POL and POD, during our screening checks, namely, to verify specific regulation lists.
Q14: Why is a complete UN/LOCODE important?
A complete UN/LOCODE is important as it helps to identify the route based on United Nations Code standards and assists in screening the cargo accordingly.
Q15: What happens if Port of Loading (POL) and Port of Discharging (POD) are both missing?
We will not screen the specific line or file if there are no port details, hence we rely on our customers to provide complete details of associated ports to proceed with cargo screening.
Q16: Why is the complete address required?
Complete address is required to properly identify the location and all its alternative names. Marcura Compliance has established a unique cargo screening process that encompasses data stewardship and validation actions guided by stringent data governance principles. This process effectively manages intricate screening requirements, leverages multiple data sources, and facilitates data enhancements, while actively monitoring 130+ trade control lists and 1,323 sanctions, regulatory and other bodies lists. By undertaking these labor-intensive and time-consuming tasks on behalf of its customers, we navigate complex regulatory environments. The primary goal is to provide comprehensive screening results and identify potential risks. The ultimate decision to accept or deny a trade lies with the customer, based on their risk appetite and due diligence requirements.
We ensure to check addresses for alternate names (e.g., Crimea vs Krimea), which are utilized during the screening process. This comprehensive location screening process helps alleviate the workload for your internal compliance team by providing accurate alerts and eliminating false positives.
Name Screening Q&A
Q17: Why does Marcura Compliance screen Trading party names against all sanctions and other official restrictions lists?
We conduct screening of trading parties to promptly notify customers of any involvement with restricted counterparties.
Q18: Why does Marcura Compliance split names from B/L into separate lines (example: PIC, C/O, ATTN etc)?
We will split the line as part of the data cleansing process, followed by validation and subsequent screening of all names provided on the Bill of Lading. This process ensures that all parties related to the BL are verified and screened.
Q19: Why do we need full name of the Trading party?
Providing us with the full name of the trading party is crucial for facilitating a thorough KYC/KYCC process. By supplying the full name, you enable accurate identification of the counterparty or counterparty's counterparties. This ensures a more precise screening process and minimizes the risk of false positive alerts.
Q20: Would it be acceptable to trade if Cargo is CLEAR, but Trading party is listed under sanction lists?
Cargo screening and Restricted Party screening are distinct processes implemented to minimize risks associated with transporting sanctioned cargo or engaging with sanctioned entities. It's important to note that Marcura Compliance does not provide advice on whether to accept or deny a trade with any specific counterparty. The ultimate decision must be based on your organization's internal risk appetite and policies.
However, through our comprehensive screening measures, we aim to assist you in the risk identification process. By accurately flagging potential sanctions or regulatory hits, we provide valuable information to support your decision-making process. This empowers you to make informed choices regarding trade engagements, ensuring alignment with your risk management strategies.
Report Alerts Q&A
Q21: What is the difference in screening results between "Empty Container" and "Container"?
Empty Container: If the screened commodity is identified as an Empty Container, the cargo will be considered CLEAR, and the final screening result will be determined based on the HS Code.
Container: If the received commodity is identified as a Container, it is marked as an ALERT. This designation may indicate that the cargo is RESTRICTED due to the ambiguity surrounding its contents. Containers can encompass various types (e.g., FCL Container, LCL Container, SOC Container) where the actual filled cargo is unclear, posing potential risks.
Q22: What could be the screening results if Brand names are given as commodities?
To ensure clarity and avoid ambiguity, we require the complete cargo description to be provided for screening. When brand names such as Toyota are mentioned in the cargo description column, it can be unclear due to Toyota's diverse range of products, spanning from spare parts to vehicle manufacturing. In such instances, if the cargo description is incomplete, we will designate the final result as "AMBIGUOUS".
Q23: What action should be taken on cargoes marked with RED alerts?
While Marcura Compliance services do not include legal advisory, our screening process is rooted in comprehensive analysis, drawing from multiple screening lists, extensive experience in maritime screening, and a specialized workforce. We provide factual screening results to aid decision-making.
However, we strongly encourage our customers to conduct additional verification and make informed decisions regarding the acceptance of shipments. We recommend referring to the following documents:
· Shipper's Letter of Indemnity (LOI)
· End Use Certificate
· Export/Reexport license.
· Load Quantity & Discharge Quantity
These documents serve as valuable resources to ensure compliance and mitigate risks associated with red-alert cargoes.
Whenever you require further assistance with your screening requirements, please feel free to contact us via the embedded messenger or via email.