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Introduction to International Screening

by Lester S. Rosen

Employers have long recognized that conducting due diligence on new hires is a mission critical task. Firms cannot afford to be sidetracked by employee problems such as workplace violence, theft, false resumes, embezzlement, harassment or trumped-up injury claims. Employers can be the subject of lawsuits for negligent hiring if they hire someone that they should have known, through the exercise of due diligence, was dangerous, unfit or unqualified.

However, with the mobility of workers across international borders it is no longer adequate to conduct these checks just in the United States. A 2000 government study shows that 11.5% of the population consists of immigrants. In addition, an increasing number of workers have spent part of their professional career abroad. The number of countries from which employers seek additional information about applicants is expansive, and includes India, China, Philippines, France, Germany, Russia, Brazil, Mexico, Australia, Japan, Canada, among others.

International Background Screening Perceived As Difficult
Because of the perceived difficulty in performing international employment screening, some employers have not attempted to verify international credentials or to perform foreign criminal checks. However, the mere fact that information may be more difficult to obtain from outside of the U.S. does not relieve an employer from their due diligence obligation.

Nor can employers simply assume that the U.S. government has conducted background checks if the worker was issued a visa. After the events of 9/11, the U.S. has increased checks on foreign visitors and on workers on government "watch lists." However, the government checks are generally not aimed at verifying a credential or checking for criminal records for employment purposes.

To exercise due diligence in hiring, employers should consider screening internationally for criminal records, employment, education, and publicly available terrorist lists.

Criminal Records
When it comes to criminal records, each and every country is completely different. The availability of public records that is taken for granted here in the United States is often times not available abroad. In some countries, records are available at the courthouse, similar to how criminal records are obtained in the US. In other countries, records can be obtained from a police agency. In some countries, the best course is to have the applicant obtain their own certificate of good conduct from their local police station.

For criminal records searches, it is important to know exactly where the person has lived to ensure you are searching the appropriate court. Keep in mind also that that turnaround time for international criminal searches takes longer than domestic searches. Different countries also have different rules on the level of searches, but in most countries it is possible to obtain information of offenses that are at the felony level.

Another concern is name variations. Many countries have naming convention that is different then the US, such as the use of the mother's name. Complications can also arise for applicants whose name is based on a non-English alphabet, such as Chinese, Arabic or Japanese. There are numerous ways that such names can be translated into English.

Privacy and data protection is another crucial issue. For example, the European Union has passed strong privacy rules affecting how personal data can be obtained and utilized. U.S. background firms that do international searches should be a member of the U.S. Department of Commerce Safe Harbor program, which demonstrates a commitment to the E.U. privacy and data protection rules.

Education
Verification of an educational degree earned abroad is critical to verify credentials and to avoid fraud. An employer needs to determine if an applicant in fact attended the school claimed and received the degree claimed. Statistics show that education fraud can run as high as 20%. The employer also needs to determine if the school is accredited and authentic. The world is awash with phony schools and worthless diplomas. If the employer is not familiar with a school, they should conduct their own research. A legitimate school will often have an e-mail address or phone number so that they can be contacted to verify a degree.

Employment
Foreign employment can also be verified by contacting the employer even though they are in a foreign country. Often such calls will be made in the middle of the night due to time differences. The critical step is to obtain as much information about the past employer as possible from the applicant. If the employer does not speak English, an interpreter may be needed.

Terrorist Lists
Other due diligence tools are the various terrorist databases available to the public, such as the Office of Foreign Assets Control ("OFAC") list maintained by the U.S. Department of the Treasury. Such lists are readily available but there are limitations as well, such as working with name matches only when no additional details are available. To locate a list of web sites containing publicly available lists, and for more information on international background checks, go to: www.esrcheck.com/international.php.

Lester S. Rosen is an attorney at law and President of Employment Screening Resources (www.ESRcheck.com), a national background screening company headquartered in Novato, California. He is the author of, The Safe Hiring Manual--Complete Guide to Keeping Criminals, Imposters and Terrorists Out of Your Workplace (512 pages-Facts on Demand Press), the first comprehensive book on employment screening. He is a frequent speaker nationwide on pre-employment screening and safe hiring issues. He was the first co-chairman of the National Association of Professional Background Screeners (NAPBS), the organization for the background screening industry.

(c)2008 Lester S.Rosen

Terrorist Searches and the Patriot Act

In the aftermath of the events of 9/11, Congress passed the U.S. Patriot Act. Its official title is “Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001.”

This law covers a number of important areas.  It directly affects the responsibilities of financial institutions to know their own costumers in order to prevent money laundering activities that finance terrorism and narcotics trafficking.  The Act defines the concept of a "financial institution" very broadly.  Although the law does not mandate additional pre-employment screening or background checks for American workers (with the exceptions of those involved in transporting of hazardous materials), the new law may well have a bearing upon employment practices, especially for those employers involved in the financial industry.

Terrorist Search

For financial institutions subject to the provisions of the Patriot Act, ESR would recommend that a terrorist search, consisting of the following searches, be used for employees.  Prudent risk-management would suggest that any financial institution in the course of exercising due diligence would want to know as much about their employees as the law requires them to know about their clients. 

There are a number of terrorist databases a maintained by various parts of the US government, as well as foreign governments and International organizations. Private research firms DO NOT have access to internal government watch lists, intelligence, or data. However, these are databases that research firms can utilize on behalf of private employers.   The key is to access all of the major lists. This is typically done through third party services that regularly scan and update these lists into a searchable database.

ESR utilizes sources that continually update the Terrorist Search. The search includes:

1.  The Office of Foreign Assets Control ("OFAC") of the US Department of the Treasury search

The US Treasury had been involved in sanction programs since the time of the War of 1812. According the OFAC web site:

The Office of Foreign Assets Control ("OFAC") of the US Department of the Treasury administers and enforces economic and trade sanctions based on US foreign policy and national security goals against targeted foreign countries, terrorists, international narcotics traffickers, and those engaged in activities related to the proliferation of weapons of mass destruction. ……. Many of the sanctions are based on United Nations and other international mandates, are multilateral in scope, and involve close cooperation with allied governments.

There are a number of OFAC programs. The primary OFAC tool is the Specially Designated Nationals (SDN) and Blocked Person list, which can be individuals, groups, or other entities that are not necessarily tied to a specific country. According to an FAQ on the OFAC site:

As part of its enforcement efforts, OFAC publishes a list of individuals and companies owned or controlled by or acting for or on behalf of targeted countries. It also lists individuals, groups, and entities, such as terrorists and narcotics traffickers designated under programs that are not country-specific. Collectively, such individuals and companies are called "Specially Designated Nationals" or "SDNs." Their assets are blocked and U.S. persons are generally prohibited from dealing with them. http://www.treas.gov/offices/enforcement/ofac/faq/

OFAC also administers Sanctions programs aimed at countries or jurisdictions or specific activities, such as terrorists, narcotic and diamond traffickers, or Weapons of Mass Destruction.

2.  European Union Consolidated List --This is list is maintained by the EU.

3.  OSFI List-This is a list supplied by the Canadian Office of the Superintendent of Financial Institutions and contains names of individuals and organizations subject to the Regulations Establishing a List of Entities made under the Criminal Code or the United Nations Suppression of Terrorism regulations.

4.  UK Terrorist List- This list is maintained by the Bank of England.

Here is a listing of currently used databases by ES:

US Government Lists

1. OFAC Specially Designated Nationals (SDN) & Blocked Persons http://www.treas.gov/offices/eotffc/ofac/index.html
2. OFAC Sanctioned Countries  http://www.ustreas.gov/offices/eotffc/ofac/sanctions/
3. Department of State Trade Control (DTC) Debarred Parties http://www.pmdtc.org/debar059.htm
4. U.S. Bureau of Industry & Security (formerly BXA)
   1. •  Unverified Entities List http://www.bxa.doc.gov/Enforcement/Unverifiedlist/unverified_parties.html
   2. •  Denied Entities List http://www.bxa.doc.gov/Entities/Default.htm
   3. •  Denied Persons List http://www.bis.doc.gov/dpl/Default.shtm
5. FBI Most Wanted Terrorists & Seeking Information http://www.fbi.gov/mostwant//terrorists/fugitives.htm AND http://www.fbi.gov/terrorinfo/terrorismsi.htm
6. FBI Top Ten Most Wanted http://www.fbi.gov/mostwant//topten/fugitives/fugitives.htm
   
   Lists from other Counties
7. Bank of England Sanctions List http://www.bankofengland.co.uk/publications/financialsanctions/faqs/faqs_consolidated_list.htm
8. OSFI - Canadian Sanctions List   http://www.osfi-bsif.gc.ca/osfi/index_e.aspx?DetailID=525
   
   Lists maintained by International Organizations
9. INTERPOL Most Wanted List http://www.interpol.int/Public/Wanted/Search/Recent.asp
10. United Nations Consolidated Sanctions List http://www.un.org/docs/sc/committees/1267/tablelist.htm
11. Politically Exposed Persons List Private sources
12. European Union Terrorism List http://www.statewatch.org/news/2004/jun/01terrlists.htm
13. World Bank Ineligible Firms http://web.worldbank.org/   (Go to Index to Procurement Information to locate current list of Ineligible Firms and individuals who either directly or indirectly control those firms)
14. Non-Cooperative Countries and Territories* http://www1.oecd.org/fatf/NCCT_en.htm

This search is generally available in 24 hours. In the event of a possible match, additional research is needed to determine if a name belongs to an actual applicant. The cost of such additional research to establish positive identification is charged separately. Employers should be aware that establishing positive identity can be difficult.  Any match must be handled on a case by case basis. 

Limitations on Using the Terrorist Search for Employment

When utilizing a Terrorist Search for employment purposes, there are two other considerations:

All employment screening is conducted under the federal Fair Credit Reporting Act (FCRA), which requires the use of reasonable procedures to assure maximum accuracy. The Terrorist Search may contain many common names and at the same time not provide sufficient identifiers to determine if any match belongs to an applicant. OFAC has a hotline to assist employers in the event of a possible match where there are insufficient identifiers on the search results.

Employers should also be aware that a person on a list may take measures to hide their true identity, Any terrorist search should utilize a number of broad based and overlapping screening tools, and not merely a search of a database. As with any criminal record database, a terrorist database can provide false negatives for a number of reasons, including errors caused by name variations and the completeness and accuracy of the data. 

In addition, employers need to be aware that a large number of names may be of Middle Eastern origin. Under the FCRA, a background screening may not be used in violation of any state or federal anti-discrimination laws. As a result, it is important that all efforts be made to determine if there is a positive match before taking any adverse action to prevent an employer from being the subject of a complaint for discrimination in hiring based upon national origin or ethnicity.

Other Patriot Act Services Offered by ESR

ESR can assist a bank in a Know Your Customer Program with the following searches:

1. Terrorist Search (see above).
2. SSN trace report
3. Current and previous addresses
4. Current and previous real property
5. Financial background (UCC, bankruptcy, liens and judgments)
6. Criminal and Civil Search
7. Vehicle and other property ownership
8. Death records
9. Employment verification

For additional information, or a Special Report on, "Financial Institutions and Pre-employment Screening in the Aftermath of 9/11: The Significance of OFAC, the Patriot Act and Terrorist Searches." Please contact ESR at 415-898-0044 ext. 240

More information is also contained in "The Safe Hiring Manual," by ESR President Lester S. Rosen.