Tool 04 · Pre-Shipment Watchlist, 50% Ownership & Red-Flag Audit Sheet

Consolidated Screening List & BIS/OFAC 50% Ownership Aggregator

Q: How long must U.S. exporters keep pre-shipment screening records?

Under EAR 15 CFR § 762.6 and OFAC recordkeeping regulations (31 CFR § 501.601 / 10-year IEEPA statute alignment), exporters must retain timestamped screening records, ownership due diligence, and export documentation for at least 5 years (and best-practice compliance programs retain OFAC records for 10 years).

Q: What should we do if a foreign buyer triggers an EAR Part 732 red flag?

Do not 'self-blind' or proceed with shipment or software onboarding. Pause the order, request written end-user and ultimate end-use verification, check whether a freight forwarder was mistakenly listed as ultimate consignee, and escalate unresolved flags or minority listed stakes to qualified export control counsel.

Sum beneficial ownership stakes across up to 5 shareholders, screen EAR Part 732 red flags, launch official Trade.gov CSL & OFAC lookups in 1 click, and download a timestamped compliance record — 100% private in your browser.

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Export Control & Sanctions Due-Diligence Reference

Understanding the 13-List CSL, the 50% Ownership Rule & Deemed Exports

Civil export-control and sanctions enforcement is strict liability — meaning good-faith ignorance of a buyer's sanctioned parent company or a controlled ECCN can still trigger $360,000+ administrative penalties per violation.

What the U.S. Consolidated Screening List Covers

Commerce (BIS): Entity List, Denied Persons List (DPL), Unverified List (UVL), and Military End-User (MEU) List.
Treasury (OFAC): Specially Designated Nationals (SDN), Sectoral Sanctions Identifications (SSI), and Foreign Sanctions Evaders.
State Department (DDTC): ITAR AECA Debarred List and Nonproliferation Sanctions.
The Ownership Gap: Named watchlist searches do not automatically reveal shell companies 50%+ owned in aggregate by listed individuals or parent holding companies.

High-Risk Commercial Tech & "Deemed Exports"

Dual-Use Hardware Outside Defense: Subsea ROVs, sonar, and acoustic positioning (CCL Category 8); multispectral drone sensors, LiDAR, and inertial navigation (Categories 6/7); and non-standard encryption (Category 5 Part 2).
Deemed Exports (15 CFR § 734.13): Showing controlled CAD drawings, source code, or manufacturing know-how to a foreign-national employee or visitor inside the United States is legally equivalent to exporting to their home country.
Audit Trail Retention: Save your timestamped .md or PDF screening packet for every foreign buyer, freight forwarder, and consignee.

Frequently Asked Questions

Why isn't searching the buyer's name on Trade.gov's Consolidated Screening List enough?

The free Trade.gov Consolidated Screening List (CSL) only searches explicitly named entities. Under OFAC and BIS 50%-ownership aggregation rules, an unlisted foreign company owned 50% or more in the aggregate by one or more blocked or restricted parties (for example, 30% by Sanctioned Person A + 20% by Listed Entity B) is legally restricted by operation of law even when its corporate name returns zero hits.

Do SaaS platforms, cloud software, and U.S. engineering firms need to screen foreign customers?

Yes. OFAC sanctions and Export Administration Regulations (EAR) apply strictly to software downloads, cloud/API provisioning, encryption (Category 5 Part 2), technical advisory, and "Deemed Exports"—sharing controlled CAD drawings or source code with foreign nationals even inside the United States under 15 CFR § 734.13.

How long must U.S. exporters keep pre-shipment screening records?

Under EAR 15 CFR § 762.6 and OFAC recordkeeping regulations (31 CFR § 501.601), exporters must retain timestamped screening records, ownership due diligence, and export documentation for at least 5 years (and modern compliance programs retain OFAC records for up to 10 years to match updated IEEPA limitation windows).

What should we do if a foreign buyer triggers an EAR Part 732 red flag?

Do not "self-blind" or proceed with shipment or software onboarding. Pause the order, request written end-user and ultimate end-use verification, check whether a freight forwarder was mistakenly listed as ultimate consignee, and escalate unresolved flags or minority listed stakes to qualified export control counsel.

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