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The reach and influence of compliance in companies is becoming ever stronger.
The relevance of compliance for industry and export companies is becoming increasingly greater
The reach and influence of compliance in companies is becoming ever stronger. Stricter regulations or new sanctions, which are particularly important for the export industry, are a recurring topic in compliance circles as well as in the media.
Avoid risky transactions with Entity Due Diligence
Can you remember a risky business where you had previously collected too little information about your supplier and were suddenly confronted with conflicts that could have been avoided? These can be simple conflicts of interest, cases of bribery, embezzlement, violations of existing sanctions or embargoes or other legal violations. The consequences for companies from such information gaps can be far-reaching. Be that direct financial damage, damage to reputation, fines or criminal penalties.
KYS and export controls are not only the task of Supply Chain Management
Industrial and commercial companies in various industries such as technology, chemicals or luxury goods implement compliance processes in which the procedure and scope of KYS (Know Your Supplier) screenings and export controls are defined. The role model of a compliance process is not only a matter of Supply Chain Management (SCM), but also of the top management level in the company, since due diligence has an influence on many other business areas. Compliance in export control extends from purchasing to sales, from HR to visitor management, because it is important to know your suppliers, customers, employees and visitors (Screen your Employees and Visitors).
Do you already know your business partners before you start working together?
By reviewing your suppliers, customers, employees and visitors, you can reduce your risks, detect and prevent misuse. Compliance managers can learn more about the purpose and final recipient of a shipment before they close a deal. If there are doubts (for example, one of the following Red Flags) or discrepancies, the (future) cooperation should be revised in detail.
Find out more about Know Your Supplier, sanction list screenings, embargoes and export controls and compliance in the industry sector below and download our summary for Industry Compliance Managers for free:
KYS stands for "Know Your Supplier" and is a comprehensive process in which you gather as much information as possible about your (potential) suppliers and business partners in order to make an informed decision for your cooperation.
KYS stands for "Know Your Supplier" and is a comprehensive process in which you gather as much information as possible about your (potential) suppliers and business partners in order to make an informed decision for your cooperation.
KYS (also KYC: "Know Your Customer" or "Know Your Client") is an important compliance process to minimize your company's reputation risks and to ensure that you do not engage in business with legal or natural persons who are acting unlawfully and therefore pose a risk to your company.
Know Your Supplier reports can also be referred to as due diligence reports and include the verification of compliance relevant data about your potential suppliers.
Due diligence reports include the review of compliance relevant data about your potential suppliers. Getting involved with the wrong supplier or business partner can jeopardize your business - both in terms of reputation risks and legal and regulatory requirements. It is therefore a sensible measure to obtain the necessary information about your business relationships in order to be able to make an informed and fact-based decision about your business activities.
Sanctions and embargoes are both imposed against countries or governments.
Sanctions and embargoes can be imposed against countries or governments. In addition, sanctions may be imposed against persons, companies or organisations. This may be by means of measures against persons and organisations with links to criminal organisations (SECO). Embargoes and sanctions both aim to impose targeted measures such as trade restrictions on a state for as long as necessary until, for example, the required human rights are respected or the political situation has stabilised.
The embargoes relate to punitive measures in the area of import and export. However, sanctions may also include other types of penalties outside import or export, such as preventing business activity with a sanctioned company. Accordingly, all embargoes are a form of sanction, but not every sanction is also an embargo.
Export controls relate to goods, software and technology, while sanctions relate to countries, individuals, companies, organisations and goods.
Export controls relate to goods, software and technology, while sanctions relate to countries, individuals, companies and organisations. The review of business relationships for sanctions is part of the Simplified Due Diligence, which in turn is part of export control.
By checking your business contacts, you ensure that you are not doing business with persons or companies on the sanctions list.
By checking your business contacts, you ensure that there are no business transactions with persons or organisations on the sanctions list. In everyday life, KYS means for every company that they screen and check all their business contacts with these sanction lists and embargo lists.
Be this
There are various sources of sanctions lists.
There are various sources of sanctions lists. These are usually issued and updated by organisations or authorities such as OPEC (Organisation of Petroleum Exporting Countries), OFAC (Office of Foreign Assets Control), the UNO, EU or similar organisations. In Switzerland, SECO compiles the list of sanctions available on its website. You can therefore compare your entities with the sanctions lists from public databases or with the public media. With Digital Compliance solutions such as the KYC Toolbox, you can check your entities with an enriched compliance database on various sanctions lists, as well as blacklists, watchlists, PEP, embargo or CRIME lists.
Your KYS review process is usually performed in your Internal Compliance Program (ICP).
Many databases use the following sanction and embargo lists for a smart sanction list screening
Many databases use the following sanction and embargo lists for a smart sanction list screening:
Here you can open an overview of the sanction, embargo, CRIME and terror lists available in our KYC database for screenings.
You can read more about risk indicators in the leaflet of BAFA (Bundesamt für Wirtschaft und Ausfuhrkontrolle Deutschland).
An ICP (Internal Compliance Program) is an internal control program designed to ensure compliance with export control regulations.
An ICP (Internal Compliance Program) is an internal control program designed to ensure compliance with export control regulations. The Executive Board is committed to take organisational measures and precautions with the aim of avoiding infringements from the outset.
The import and export of certain goods are subject to various conditions due to provisions on noncustoms enactments.
The import and export of certain goods are subject to various conditions due to provisions on noncustoms enactments. In general, goods for import or export from Switzerland require a permit for the following reasons:
Details on the Swiss permit requirement can be found from the Federal Customs Administration (FCA).
Dual-use goods are goods, knowledge or software which, due to their dual purpose, can be used for both civil and military purposes. SECO offers further information on such dual-use goods.
In Switzerland, you can comply with the following laws and regulations in your compliance and export control processes
In Switzerland, according to the SPEDLOGSWISS Risk Bulletin or an extract from the Embassy to the Federal Act on the Enforcement of International Sanctions in Your Compliance and Export Control Processes, the following laws and regulations apply to you:
Embargo Act (EmbG)
For reasons of security policy, the Swiss government may impose sanctions based on the Embargo Act in the form of import, export and transit bans on goods from or to certain countries.War Material Act (KMG) and War Material Ordinance (KMV)
Control the production and transfer of war material and technology in order to fulfil Switzerland's international obligations and to uphold its foreign policy principles.Goods Control Act (GKG) and Goods Control Ordinance (GKV)
Control of military goods, dual use goods and other goods subject to authorisation.This is not an exhaustive list of the laws and regulations to be observed. In addition to Swiss legislation, international guidelines such as the US EAR/ITAR for companies must also be observed.
Read here why the export control laws of the USA are also relevant for Swiss companies and why the regulations for military equipment of the US-American International Traffic in Arms Regulations (ITAR) also have a high priority in the area of export control and compliance in Europe.
KYC Spider is not a financial intermediary and is not subject to the requirements of the MLA. KYC Spider has developed an information platform to support financial intermediaries in fulfilling their due diligence obligations. KYC Spider is a technical service provider for data and document management.
KYC Spider does not provide legal, regulatory, economic, financial, tax, organizational, technical or other advice.
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Eurospider offers all the necessary compliance services relevant not only for finance intermediaries, banks and insurance, but also for fintechs, casinos and industrial corporations: Embargo, sanctions screening, PEP and crime check and compliance documentation.
Eurospider Information Technology AG
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8006 Zürich
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