Tuesday May 10, 2011

How Oracle Apps Support Denied Party Screening Compliance

U.S. and other countries have regulations to restrict individuals and companies from conducting transactions with specific foreign entities (individuals, companies, and countries).  These entities are referred to as Denied, Debarred, and/or Restricted Parties, and checking your transactions against these restricted party lists is called a Restricted Party Screening process.

Examples of these entities include known terrorists, organizations that fund terrorists, and/or parties guilty of trade violations.  Typically, these restricted parties are countries subject to embargoes, and persons, businesses, and organizations subject to financial sanctions.  Some examples of countries and organizations that maintain lists of restricted parties include the European Union,U.S. Department of the Treasury Office of Foreign Assets Control (OFAC), U.S. Commerce Department’s Bureau of Industry and Security (BIS),  U.S. State Department, United Nations,  the Bank of England, etc.

All companies engaged in domestic and international trade should not enter business transactions with entities listed on any of the denied parties lists. In other words, companies should implement proper controls to screen employees, customers, suppliers, agents and other business associates to prevent engaging in business transactions with them if they are listed as a denied party.

How does Oracle Applications meet this compliance requirement?

Oracle's Transaction Controls Governor, part of the Oracle Fusion Governance, Risk, and Compliance suite, allows you to systematically screen your parties and transactions and raise alerts for potential violations at key steps in your business processes. Such checks and safeguards ensure the right questions are being asked at the right times in your business process to preclude facilitating shipments or providing services that are contrary to the myriad of restricted party restrictions and therefore inconsistent with the company’s best interests and continued ability to conduct business in the international marketplace.


How It Works

How it works is the moment you enter a party in your system, such as a customer, supplier, employee, etc., Transaction Controls Governor will verify that the party name and/or address is NOT also listed on one of the denied party lists, such as the U.S. Department of Treasury's Specially Designated Nationals List (SDN) at their website.

You have complete flexibility on how strict or loose the conditions should be when matching the party's name and addresses. For example, instead of doing an exact match which will not account for typos and spelling errors, you can do a "Similar to" match and then apply the percentage of 0-100%. In other words, you can tailor your rule to flag any supplier whose name is 60% similar to the name listed on the denied parties list. Then, as you enter transactions, such as entering an invoice or paying an invoice, Transaction Controls Governor can detect violations and flag the transaction. If a violation is found, you can modify the workflows within your desired application to place the transaction on hold while the user analyzes the violation, and then the user can release the hold and approve the transaction to continue with its downstream processing. How you want to modify or interrupt your workflow when a violation is detected is completely up to you based on your corporate practices.

Oracle Fusion Governance, Risk, and Compliance suite integrates with all of Oracle Financial Applications, such as E-Business Suite, JD Edwards, PeopleSoft, and Fusion to help companies meet their compliance requirements.

For more information about Oracle Fusion Governance, Risk, and Compliance suite, visit:
http://www.oracle.com/us/solutions/corporate-governance/index.html

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Focusing on solutions for the Office of Finance, this blog will highlight key financial management market trends, events and other news of interest.

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