Compliance Glossary

Denied party screening is the process of checking customers, suppliers, employees, and business partners against US government watch lists before completing a transaction. The goal is to confirm you are not doing business with someone who has been sanctioned, blacklisted, or had their export privileges revoked by OFAC, BIS, or the State Department.

Screening typically runs a party's name against lists like the SDN List, BIS Entity List, Denied Persons List, Unverified List, and others — collectively available via the Consolidated Screening List. The process uses fuzzy name matching to catch slight spelling variations and aliases.

The Consolidated Screening List is a single data feed maintained by the US International Trade Administration (ITA) that combines 11 separate export screening lists from three federal agencies: the Department of Commerce (BIS), the Department of State, and the Department of the Treasury (OFAC).

The 11 lists included are: the SDN List, the Sectoral Sanctions Identifications (SSI) List, the Foreign Sanctions Evaders (FSE) List, the Palestinian Legislative Council List, the BIS Entity List, the Denied Persons List, the Unverified List, the Military End User List, the State Department Debarred Parties List, the Nonproliferation Sanctions List, and the AECA Debarred List.

OFAC is a financial intelligence and enforcement agency within the US Department of the Treasury. It administers and enforces US economic and trade sanctions against countries, regimes, terrorists, arms dealers, drug traffickers, and other national security threats.

OFAC's sanctions programs target specific countries (Cuba, Iran, North Korea, Syria, Russia) and thousands of designated individuals and entities worldwide. Its primary tool is the Specially Designated Nationals (SDN) List. OFAC also maintains the Sectoral Sanctions Identifications (SSI) List for targeted sector-level restrictions on Russia, and several other program-specific lists.

The SDN List is OFAC's primary sanctions list. It contains names of individuals, companies, vessels, and aircraft whose assets are "blocked" — meaning US persons may not conduct transactions with them. As of 2025, the SDN List contains over 12,000 entries, with hundreds of aliases and variants per entry.

SDN designations can stem from many programs: terrorism, narcotics, weapons proliferation, cyber threats, human rights abuses, and country-specific programs. Entities owned 50% or more by an SDN are also subject to blocking even if not explicitly listed — this is known as the "50 percent rule."

The BIS Entity List is a list of foreign individuals, companies, research institutions, and government organizations that are subject to specific export license requirements because they have been deemed to pose an unacceptable risk of diverting US exports to weapons programs, military end-uses, or other activities contrary to US national security and foreign policy interests.

Maintained by the Bureau of Industry and Security (BIS) within the Department of Commerce, the Entity List assigns a specific license requirement and license review policy to each listed party. In most cases, license applications for Entity List parties are reviewed with a presumption of denial.

The Export Administration Regulations (EAR) are a comprehensive set of rules issued by the Department of Commerce, Bureau of Industry and Security (BIS), that govern the export and re-export of most US commercial goods, software, and technology that have potential dual-use applications (civilian and military).

The EAR covers items on the Commerce Control List (CCL), classified by ECCN, as well as all "EAR99" items (low-risk commercial goods not specifically classified). Even EAR99 items cannot be exported to sanctioned countries or denied parties.

The International Traffic in Arms Regulations (ITAR) are administered by the US State Department's Directorate of Defense Trade Controls (DDTC) and govern the export and import of defense articles, defense services, and related technical data listed on the US Munitions List (USML).

ITAR is distinct from EAR: ITAR covers items specifically designed or modified for military applications (weapons, military aircraft, targeting systems, explosives), while EAR covers commercial "dual-use" goods. ITAR has no de minimis exemption — any product with ITAR-controlled components is itself ITAR-controlled.

The Denied Persons List (DPL) is a BIS list of individuals and entities that have been denied export privileges following a violation of the Export Administration Regulations. Persons on the DPL are subject to an order that explicitly denies their ability to participate in export transactions.

DPL designations are the result of an adjudicated enforcement action and are published in the Federal Register. Denial periods vary from a few years to permanent denial. US persons are prohibited from participating in any way in an export transaction involving a denied person, including as a supplier, freight forwarder, or financial institution.

The Unverified List (UVL) contains names and addresses of foreign parties whose bona fides BIS was unable to verify in prior export transactions, typically because an end-use check could not be completed. Unlike the Entity List, UVL placement does not require a license — but it triggers specific due diligence obligations.

Exporters must obtain a "UVL statement" from a party before exporting items subject to EAR license exceptions. If the statement cannot be obtained, certain license exceptions are unavailable and a license application may be required. UVL placement is a precursor to potential Entity List designation.

The Military End User (MEU) List identifies specific foreign persons — primarily in China, Russia, and Venezuela — that BIS has identified as military end users. Exports of items controlled under certain ECCNs to MEU parties for "military end use" require a license even if the items would otherwise qualify for a license exception.

The MEU List was created as part of the 2020 expansion of the "military end-user" rule, which also broadened the definition of military end use to include items that support or enable military activities, not just those directly incorporated into weapons systems.

An Export Control Classification Number (ECCN) is a five-character alphanumeric code (e.g., 3A001, 5E002) used in the Commerce Control List (CCL) to classify dual-use goods, software, and technology subject to EAR controls. The code identifies the commodity type, its primary use category, and its control reasons.

Items not specifically classified on the CCL are designated "EAR99" — the catchall category for low-risk commercial goods that generally do not require a license for most destinations. However, EAR99 items may still require a license when destined for sanctioned countries, embargoed destinations, or parties on restricted lists.

An HTS (Harmonized Tariff Schedule) code is a 10-digit number used by US Customs and Border Protection (CBP) to classify imported goods for the assessment of import duties, collection of trade statistics, and enforcement of US trade laws. HTS codes are based on the international Harmonized System (HS), which is used by over 200 countries.

HTS codes are important on the import side. On the export side, the comparable system is Schedule B codes (used by the Census Bureau for export statistics) and ECCNs (used by BIS for export controls). Many companies must manage both HTS codes (for imports) and ECCNs (for exports) for the same product.

A deemed export occurs when controlled technology or source code is "released" — orally, visually, or through access — to a foreign national inside the United States. Under EAR, this release is treated as an export to the person's home country. Under ITAR, the same principle applies to USML-controlled technical data.

"Release" is broadly defined: it includes allowing a foreign national to inspect, use, or have access to technology — even in a lab, office, or university setting. Common deemed export scenarios include hiring foreign national employees, contractors, or interns who will work on controlled technology, or giving foreign partners access to source code repositories.

Voluntary Self-Disclosure (VSD) is the process by which a company or individual proactively reports an export control or sanctions violation to the relevant US government agency — BIS, OFAC, or DDTC — before being discovered through an audit, investigation, or third-party complaint.

BIS, OFAC, and DDTC all have formal VSD procedures. A VSD typically includes a narrative account of the violation, a list of affected transactions, the root cause, and corrective actions taken. Agencies generally treat VSDs as a significant mitigating factor — OFAC's penalty guidelines can reduce penalties by 50% or more for timely and complete VSDs.

An End-Use Certificate (EUC), also called an End-User Certificate or Import Certificate, is a document signed by the importer or end user of controlled goods or technology that specifies how the items will be used and confirms they will not be re-exported, re-transferred, or diverted to unauthorized parties or destinations.

End-Use Certificates are often required by exporters as a condition of sale for items subject to export controls, or by foreign government customs authorities as a requirement for importation of sensitive items. They are also a standard element of Blue Lantern end-use monitoring checks conducted by the State Department on ITAR-controlled exports.