Protecting Your Business: A Simple Guide to Sanction Checks and Exclusion Screening

Business requires developing good business relationships. In order to conduct business you must hire employees, enter into contracts with vendors and partner with other businesses. It would be great if everyone you worked with had integrity and obeyed the law, but unfortunately this is not the reality. Businesses also face risk. You could accidentally hire someone who has a record of committing fraud or doing business with a company that is banned from doing business due to violations of law.

Many companies utilize two simple safety processes, known as Sanction Checks and Exclusion Screening, in order to help mitigate these risks. Although these terms may sound like complicated legal terms, they are actually very straightforward processes that will help protect your business from difficult situations.

What Are Sanction Checks?

Think of a global “Do Not Do Business With” list that is kept by governments around the world and some international organizations. These lists are intended to prevent money from being sent to criminals, terrorists, drug traffickers, or countries that have trade restrictions.

Sanction Checks are a process of checking against these lists to ensure that an employee you are considering hiring, a customer you wish to do business with, or a partner you want to work with is not on them.

For instance, if an individual has been deemed to be involved in money laundering, the government would place a sanction on that individual. If your company were to inadvertently send money to that individual or hire them as an employee, you could be subject to government-imposed fines or even face legal action. Ignorance of this fact will not excuse you from having to conduct these checks; this is a requirement that is mandated by law.

What do we mean by Exclusion Screening?

Compared to global financial and security-based Sanction Checks, Exclusion Screening is typically industry-specific. Typically, you see these being done in either the healthcare sector or with those performing government contracts.

What happens if you are a professional (e.g. nurse, doctor or contractor) found to have violated rules, committed fraud or abused government programs?

In most countries, you may be put on an Exclusion list so that you are unable to work with any government-provided services. An example of this is if a physician performs a service and then bills Medicare, but does not actually perform that service. Their name would appear on an Exclusion list (for example the OIG-Lisiting of Exclusions in the USA), so you would know they could not be hired by your institution.

If your hospital hires an excluded nurse and provides them with patients through government reimbursement, then your hospital may be required to repay all reimbursement for those services as well as incur significant fines.

Why Are These Checks Important?

You might think, "My business is small, do I really need to worry about this?" The answer is yes. Here is why Sanction Checks and Exclusion screening are vital:

1. Avoiding Huge Fines: The most immediate impact is financial. Governments take these violations seriously. The penalties for hiring an excluded individual or doing business with a sanctioned entity can cost millions.

2. Protecting Your Reputation: Trust takes years to build and seconds to break. If news comes out that your company is doing business with a known criminal, your customers will lose faith in you.

3. Patient and Customer Safety: In healthcare, exclusion screening isn't just about money; it’s about safety. People on exclusion lists often have a history of patient abuse or negligence. Screening them out keeps your patients safe.

4. It is the Law: In many industries, performing these checks isn't a choice; it is a legal requirement.

Controlling the Process

When checking manually there are literally thousands of names, so it’s incredibly difficult to process these checks because they frequently change from day to day. Just because someone is clean today does not mean they will not show up on a sanction list tomorrow.

Due to the difficulty of performing sanction checks manually, the majority of progressive businesses choose to use automation software. These applications will automatically conduct Sanction Checks and Exclusion screening in the background of your employee and vendor databases. They perform periodic scans (generally at least once per month) and provide immediate notice if a name appears on the sanction or exclusion list.

Conclusion

Think of Sanction Checks and Exclusion screening as a background check for your business’s health. Just as you wouldn't drive a car without insurance, you shouldn't run a business without knowing who you are working with. By implementing these simple screening processes, you protect your finances, your reputation, and the people you serve. It is a small step that provides massive peace of mind.

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