Human Resources Departments face special OFAC compliance challenges, especially in regards to staffing. Companies are generally prohibited from dealing with individuals on the OFAC SDN list, and this includes being prohibited from employing them. Thus, companies should implement robust restricted and denied party screening of both new and existing employees against the SDN list to ensure that they do not inadvertently end up with restricted parties on their payroll, whether in the U.S. or overseas.
Firms that employ contractors and subcontractors are also responsible for making sure that the companies and individuals they hire are not on the OFAC SDN list or other federal government restricted or denied parties lists designed to protect the United States and its allies from threats of weapons proliferation, drug trafficking, and terrorism.
The role of Human Resources in trade compliance is typically devoted to developing and managing company policies and processes for screening potential employees and contractors against federal government lists designed to protect the United States and its allies from threats of proliferation, trafficking and terrorism as well as from running afoul of GSA rules for contractors.
Failures can be the cause of government penalties—fines, loss of privileges, higher costs, and jail time; as well as market consequences—losing customers and new business opportunities and suffering irreparable damage to corporate and individual reputations.
Human resource processes involve even higher levels of compliance and business risk for companies with foreign subsidiaries, especially in areas of heightened risk.
Visual OFAC regulatory compliance software solutions decrease risk, centralize controls, and protect against the kind of potential damage that keeps executives up at night.