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13: BIS 50% Rule – The Sayari Solution · Rittener Reflections

• Melina (00:00) the key is for companies to shift from a reactive compliance posture to a proactive posture. And understanding your risk exposure really starts now. As I said, at its core, it is a data problem. Corporate ownership information is incredibly fragmented. It's spread across hundreds of different government registries around the world. And so it's not something you can just Google. That is the fundamental hurdle, but it is the truth and companies engaging in global trade should have really robust programs that utilize the tools of the modern era. So checking entities, checking exporters against a static list is not going to cut it in this ever-changing world. Jeff (01:06) Welcome to episode 13 of Rittner Reflections, a forum for addressing the dynamic, complex, and essential nature of cross-border trade in our ever-changing world. 2025, I am certain that you need no reminder that we are squarely in the middle of a trade war. Every day and all day, there are news reports of some action, counteraction, or speculation about a pending action that involves global trade. We really have had our attention drawn probably more to tariffs in the past weeks and months than anything else. But there are other actions being taken, other tools or we could even say weapons that are being used to drive foreign policy and national security agendas and to implement countermeasures to protect industries and to punish the so-called bad actors. The news on tariffs, interestingly, has been so prevalent that, I mean, I found that when I meet people, I'm at a party, I'm in my running group, I'm on whatever, I meet people and I mentioned trade and as soon as I mentioned the word tariffs, their eyes light up and then, I know exactly what you're doing. know exactly what you're doing. Everybody, it doesn't matter who you are, is so in tune to the fact that there are all this tariff news going on. But when I talk about some of the other tools, like for example, the entity list, they have no idea what I'm talking about. So today we are going to talk about some of the other tools that are being utilized around the world. And that is the use of sanctions or lists that ban certain individuals, entities, countries. In the US, we call this this list, the entity list. But in China, it is called the unreliable entity list. So we find that every day somewhere around the world, entities, individuals, and even sometimes countries are placed on these lists with regulations that go along with it that prohibit business transactions, even investments. or maybe they require an export license if you do want to trade. These restrictions we're finding are just becoming more pervasive, more complex, and quite frankly, more just overwhelming. As an example, current example, there's what's called the BIS 50 % rule. Now BIS is the Bureau of Industry and Security. They are the agency under the Department of... commerce that regulates export controls. And this 50 % rule is a proposed expansion of USS Control regulations. And it would apply trade restrictions to any entity that is 50 % or more owned by a company that is already listed on this BIS entity list. Or it could be the military and use list. or it could be designated as a designated national, also known as an SDN. It is a proposal and they may publish it at any moment or it may never be implemented at this stage given all of the dynamics, the geopolitical dynamics. But nonetheless, it is creating serious concern among exporters and and an industry that is already, as I said, overwhelmed with the ever increasing and complex end user controls. So today, I have the wonderful opportunity to discuss these complex and these ever changing challenges with Melina Villavicencio, who leads the data product function at a company called Zyari. Now you may never have heard of Sayari. I never heard of Sayari until maybe a year ago. It is a software tool. I know when I worked back at Intel, we engaged with Sayari and began to use some of the aspects of that tool to help us. But where I really got to know Sayari was several months ago, I was invited to their annual conference and back in... Washington DC. I was allowed to join them for two days and I went to a number of workshops and I had a chance to actually see how the tool works and I was really amazed just at the capability at the data and the information that is available to help the industry help exporters manage this you know, like I said, ever increasing challenge around who's the end user, who's actually receiving your product. So I found the tool fascinating, so much so that I wanted to meet with somebody at Zaireity for my podcast so that we could dive into this a bit and really understand how exporters could use such a tool to help them navigate just what has become so complex. And so, What I learned, just to give you little background, what I learned about the company, they are on a mission to transform global risk management and corporate transparency by providing this tool that gives instant comprehensive insights into corporate structures and supply chains and delivers automatic risk intelligence that can be more accurate and reliable than the traditional manual solutions that so many of us have. used for years. Essentially, Melina and her team focus on securing access to all of Sayari's data, which is corporate data, trade data, risk, real property, ensuring that the data meets the highest quality standards so it can be trusted and turning the data into actionable human-grade risk insights that will allow end users to navigate the complexities of this new commercial world with clarity and with confidence. And this includes launching data and features that can help industry and regulators prepare for the policy shifts we're seeing, such as this much anticipated draft BIS 50 % rule. Jeff (07:37) Welcome, Malina, to this episode of Written Reflections. I am very excited to have this conversation with you. Melina (07:39) Thank you, Jeff. Of course, delighted to be here and thank you for having me. Jeff (07:48) It's great to have you. I thought just to get your perspective, just if you could talk a bit about the company, you know, from how you experience it, you know, when was it established and why, and when did you join and why? Melina (08:00) Yeah, of course, of course. So the company was established over 10 years ago. And today we have multiple products in the market. have Sayari Graph, we have Sayari Map, we have Sayari Guide, as well as Sayari Signal, right? So I joined the company four years ago when we only had one product in the market and it's evolved significantly since then. But essentially all of our products are built onto a single core knowledge graph. So that knowledge graph is essentially a map of the global economy. We build that map, that knowledge graph, by connecting billions of disparate public records with global corporate structures as well as supply chains. So our data scale is immense. have records on over 500 million companies, all of their kind of affiliated parties, managers, shareholders, beneficial owners. We have bill of lading data in over 60 countries today. And we gather data and harvest data in some high risk jurisdictions like Russia, China, where we have over 220 million records from companies there alone. And so with kind of this immense and vast network of data, we integrated with global trade data, risk intelligence data, just like the SDN list from OFAC, the entity list that we're going to talk about today, the UFLPA list. And that helps us really enable our clients to see deep into their business networks and uncover. non-obvious risks where there may be, for example, sanctions, evasion, or export controls violations, you know, for example, forced labor exposure. So through kind of that mission, we support some of the world's most discerning organizations from major technology companies to, you know, U.S. government. We're really proud to be supporting mission critical needs here. Jeff (09:56) Wow, that's really impressive. The amount of data that you have gathered and ⁓ assimilated, that's incredible. So as a company who's trading around the world, what does Siawri offer? As a company, what would I gain? Melina (10:01) yeah. Yeah, so we now have built different products for different use cases. So for example, if you were an AML team in a bank, you could potentially use, you know, Sayari Graph to look at the entities that are applying for, or that are wanting to be your customers, right? But we've kind of expanded well beyond that. For example, you can use Sayari Graph also to aid lead generation if you are working on a core case. You can utilize the data in Sayari as core admissible data. And with our newest products, for example, I want to talk a little bit about SayariMap. You can get visibility into multiple tiers in a specific supply chain through following that specific goods value chain, right? instead of just looking at, you know, who is who is doing business with who, who is sending an export to who. It is really more around, you know, in this specific value chain, this is the specific commodity that is sent and that is an input into making the final good that you are ultimately importing. So you could review actually the full multi-tier supply chain in SayariMap. Jeff (11:24) Wow, so one of the things I really appreciated is I was able to attend your latest conference where you demonstrated so many of these features and I was so impressed with what I saw and the capability that your tool offers. And so I think for those companies that are using your tool, I'm sure they are finding incredible value and for those that have not. Melina (11:34) Yes. Jeff (11:47) Explored it's it sounds like it would be a great benefit to the work they do now one of the things Mollin at that we We were finding in our world today is that who we trade with is become very important and You know trying to understand whether the goods that we trade with are ending up in the right place or the wrong place and so Their government is very concerned about this. So maybe we could just kind of jump into into the background on the government for a minute just to help people understand. So for example, there is this rumored BIS 50 % rule. So maybe we could start with who is BIS and what are they trying to accomplish? Melina (12:26) Yeah, absolutely. And BIS is short for the Bureau of Industry and Security. And its role is it's a balancing act really, because it's tasked with advancing US national security and foreign policy goals, while at the same time promoting US economic interests and tech leadership in general. the agency has a long history dating back to the Cold War. It was initially named the BXA, the Bureau of Exports Administration, right? It was created in 87 and it was initially put in place to manage export controls on technology that could be diverted by the Soviet Union. So it was renamed to BIS in 2002 and, you know, really reflecting changes in the world post 9-11, a broader security mission. So its primary function today is to administer the EAR, which I'm sure we're going to talk a lot about today, the export administration regulations, which generally regulate dual use items, right? Commercial goods, software, technology that have legitimate civilian purposes, civilian applications and uses, but can also be used for military or weapons. proliferation purposes. And one of the themes that I really wanted to touch on today, when we talk about it in the industry, we tend to talk a lot about like the commodities, right? But the breadth really is more expansive here, they regulate items. And so that's not necessarily just, you know, an export that leaves support, it is a software, for example, that is provided to an entity that may be regulated by BIS. And so That kind of nuance is really important. Jeff (14:09) Yes, and so, you know, when I first began to work in this field back in the days of trying to manage Russia, you know, it was a very simple process. I mean, we basically had this idea that you should know your customer. And so there was a small list and you would always check your customer to make sure they weren't on the list. But today it feels like BIS is more interested not only in who your customer is, but who their customer is and their customer. Melina (14:18) Yeah. yeah. Jeff (14:34) and so on. So Melina (14:34) Yeah. Jeff (14:35) explain a little bit more what BIS, again, how does this regulation affect those of us that are trading? Melina (14:42) Yeah, absolutely. so, you know, the EAR has multiple supplements and multiple ways of BIS enforcement. But what I want to get into a little bit deeper is kind of how the entity list began. And because that really matters to why it's evolving, why it may be evolving, right? So the entity list was first published back in 97, right? 10 years into the existence of the agency. And it had a very narrow mandate, kind of to your point when, you know, back in the day, the purpose of the entity list was specific to weapons of mass destruction. So entities that were initially in there, I believe it was only a few hundred, they were really known to be, you know, really risky in terms of nuclear proliferation. But the scope has expanded significantly, and especially over the past decade. so now entities that are added, they're added from a much broader range of applications. So now entities added to this list, they are added either for supporting terrorism or enabling military aggression. or even being involved in human rights abuses. So the scope has expanded significantly. And while the list was used sparingly at first, and to your point, exporters only had to check their direct customer. We have now about over 33, close to 3,400 entities listed today. And while there's a pretty heavy focus on China, China's the top featured country in terms of persons, whether it be companies or individuals, Russia is also highly targeted on the entity list and we have entities from Pakistan, we have entities from the UAE, we even have entities in the UK and Germany. it's expanded significantly. And now with this proposed rule or, you know, draft rule, it may expand even further. And at that point, if that rule goes into effect, that expansion would go well beyond what's listed. And so that is, you know, the burden on compliance, right? It's going to be more expansive and There isn't a one size fits all, but happy to talk more about kind of what solutions might be out there. Jeff (17:14) Yeah, no, that's very helpful, Amalina. I recall when the entity list was first implemented, it was very clear that BIS wanted to get the company's attention and have them come into BIS and explain why they shouldn't be on the list and why they weren't a risk or what they would need to do to change. And there were some companies that came in and actually there's a process to come off the list. Melina (17:31) Yeah. Yeah. Yep. Yep. Jeff (17:43) But today with over, would you say 3,000 or whatever? I mean, it's almost like this thing has turned into more of a bad guy list as opposed to more of the carrot of, hey, we're concerned, please come in and so on. So it is interesting to see how this has evolved and it has made compliance much more difficult and the need for a tool like Ciari much more relevant, right? So, you know, one of the things that we always struggled with when I was working in industry is, know, trying to manage Melina (17:48) Yeah. ⁓ Yeah. Yeah. Jeff (18:11) the BIS controls versus the OFAC sanction. Now OFAC is the Office of Foreign Assets Controls and they are under Treasury and they've always implemented sanctions. I mean that has been their jurisdiction but now you've got this mingling between the two. So maybe you could help describe what's the difference and why does that matter? Melina (18:28) Yeah, absolutely. And to your earlier point on kind of other things that have made this process even more complex, when there were only a few hundred entities listed, the, I think what's called, you know, presumption of denial versus, you know, what is the license review policy specifically that applies? It used to be more uniform. Now, Jeff (18:42) Thank Melina (18:50) It really is up to the exporter or the regulated company to check what is the license review policy that may apply to them. But getting into your second question, which is around OFAC. So OFAC enforces sanctions. They have this SDN list. They have a few other lists, but their main instrument is the specially designated nationals list. and it serves as a tool to change behavior. but it is pretty broad, right? It regulates not only exports like the entity list, but also imports, you know, investments, financial transfers, any type of, transaction, that may involve entities on the SDN list. Other times it also includes, you know, travel bans, asset freezes and whatnot. so we can say that the entity list has a more narrow scope in the sense of enforcement, because it applies to export, re-export, or in country transfer of the items that apply to the entity list. but one of the things that I do want to highlight is, the, the creation of this entity list and, the addition of new, new companies to this entity list, or persons or research centers. It usually requires an interagency consensus or at least interagency review, right? And that includes not only commerce, it includes also treasury and, you know, energy and state. so typically in order for an entity to actually be included into this list, it means there is interagency agreement that there should be, you know, what they call it in the actual enforcement, a red flag and heightened due diligence into these entities. And, you know, depending on the license policy, a presumption of denial, you know, you may apply, but we're most likely going to deny that license. Jeff (20:42) Right, no, that's helpful to understand that nuance. You know, one of the things that I had firsthand experience recently was the US government's concern that US parts were showing up on the battlefield in Ukraine. And I had the wonderful privilege of testifying before Congress on this topic. one of... Melina (21:01) fascinating. Jeff (21:02) Yeah, one of the things that they were very concerned with is that you could sell an item to a party that maybe is not on the entity list, but the item ends up through various means, you know, getting to where it should. We don't want it to go. And so there was a lot of concern. What do we do about that? So you mentioned earlier that the entity list, you know, does include other countries like Russia, like Pakistan. So help us understand how does BIS expect companies to manage this to ensure those goods don't show up in places? Melina (21:34) Yeah, that's a great question. And honestly, a point that I really wanted to touch on this regulation doesn't only matter for US companies. You know, and I think that might be a misconception that, know, because it's a it's a US agency, and so it would only apply to US exporters. But it really applies to any items in US jurisdiction. And so, for example, if we take one of the highest enforcement actions that the BIS has had was with Seagate, right? That was in 2020. The company that was actually, you know, exporting was not a US company. It was the Irish company, right? And I believe that there was a whole web there between Ireland, Singapore, and ultimately Huawei. But Jeff (22:04) Yes. Melina (22:21) at the end of the day, there was US oversight and more importantly, the goods that were penalized, the reason for the enforcement action was because the goods included substantive US technology. you know, and yes, Seagate did have a US presence and they did have, you know, some US operations. But even if they didn't, honestly, at the end of the day, if there is either sufficient reason for the US to be considered the country of origin of that commodity, or if it's not a commodity, but if it's an item, a piece of software that has US technology, it's going to be on a case by case basis, but it is really important for exporters not to discount that the regulation applies to them, only if they're not. headquartered in the US, right? That's not how that type of enforcement works. And so the other item that comes up a lot, and I'm sure you came across it when you were doing these investigations on Ukraine, the substantial transformation question, right? If there is a component that is of US origin, it undergo substantial transformation in another jurisdiction before ending up wherever, right? whether it's in China, whether it's in the Ukraine, Belarus. And it's a burden. The exporters have to be really careful to discover, you know, are they already doing business with an entity in a potential subsidiary, which I'm sure we'll get into as we actually talk about this 50 % proposal. Jeff (23:35) Mm-hmm. Melina (23:56) But do they apply for a license? Do they need to start to review the CCL against the specific, potentially HS codes that they're exporting? My answer would be yes, absolutely. Even if a tool like Sayari gives you enough visibility into your potential risk, you really have to look into your specific case. Jeff (24:20) Absolutely. Yeah, it's a very difficult problem. I can tell you because I did have the opportunity to go to Europe and meet at the Ukrainian Embassy to look at these parts that were found on the battlefield and You know, there was a board Mother like a PCB board and there were multiple chips that somebody had soldered on there and so definitely a substantial transformation, but the chips came from all different companies and some of them were old, some of them were newer and so on. And so this is a really difficult problem to attack. I think this is, I think BIS is under a lot of pressure to provide companies with, know, better or ask companies to. do more diligence to gain more information to ensure that this doesn't happen. And so we've all heard over the last, I'd say, month or so that there is this rumored BIS 50 % rule that they're looking to implement. And I'd like to kind of dive into that a bit because I think this is really where I think your company and your tool can really help traders who are trying to manage this very complex situation. Let's start with some basics just for our listeners here. What is the 50 % rule and what's kind of the rationale for kind of implementing it now? Melina (25:39) Yeah. Yeah. So the first time we heard about the, or from an actual, you know, government official about the potential rule was around April in the confirmation hearing of Lenin-Head. And he kind of had framed it as a relatively straightforward tweak that could, or that would have the potential of having great benefits in terms of enforcement because it would be closing a subsidiary loophole. And the rationale there is, know, entities may be setting up subsidiaries in order to do business with, you know, US companies. closing that subsidiary loophole. Let's say, you know, let's take that example of Seagate as well, you know, Huawei could have a subsidiary in a different country outside of China and how the entity list tends to list different addresses, like in a completely different address, but still be connected through an ownership, direct ownership chain to that parent company. The goal here would be to close that loophole by kind of recreating a similar logic from what OFAC already enforces, has been enforcing the 50 % rule since I think their interim guidance was in 2008 and then their aggregate revision and newest policy came out in 2014. So it's been a while that OFAC has been enforcing it. So taking some of that, you know, the same enforcement logic that is used for OFAC, which is, know, OFAC doesn't tell you. who are the subsidiaries that is on the industry to figure out and to actually conduct that due diligence. And so it would be a similar implementation here where should this rule go into effect? I'm gonna presume commerce is not going to give us a list of the subsidiaries to screen against. that burden would fall on the actual exporter. And so we heard this in April, but then in June, mid-June, we also heard from Tim Mooney that indeed the proposed rule is in the works, it is in draft format. Now we have not seen it in the federal register yet, which suggests either, you know, it would potentially go into effect as a IFR rather than a full, you know, public comment period for 60 days or, or we really don't know. I don't want to speculate too much here, but we have heard confirmation that there is a draft rule that it is in the works. And so I think it is the right time to start preparing your compliance teams. We shouldn't really wait until the rule goes into effect. Um, you know, depending on the industry, uh, the business, ultimately, this could be a rule that impacts your bottom line though. Uh, because penalties are pretty high, know, Seagate got fined 300 million. Uh, and so the time to prepare is now, of course, we should expect the IAS to give some, you know, grace period for compliance programs to, to adjust. but we heard confirmation that, in June that this is in the works. And so, I think I would, I would classify it as a little bit, more confirmed than a rumor just because we got that confirmation now that, that it's likely to, to go into effect. Jeff (29:08) All right, no, can, thanks for that, Melina. I can verify or validate your point because I was in the RAPTAC, Regulation, Procedures, and Technical Advisory Committee, which I serve on, and I sat one person away from Tim Mooney, and Tim Mooney told us that they're working on a rule. So you're absolutely correct. There is a draft rule. Melina (29:32) Yep. Jeff (29:37) is being worked on and I'm not sure, I don't know whether we would have an opportunity at RAPTAC to see it before it's published or not, but I do think your point of being prepared is valid and appropriate for those that do trade globally. Let me just jump back, because you talked a bit about OFAC has been doing this all along and so what... What's the difference? mean, why is OFA have a 50 % and BIS doesn't? what is it going to make everything the same? Or what's the difference? What's really going on here with this? Melina (30:10) ⁓ so it's, it's a lot of nuance here because, I don't want to, I don't want to, not talk about the fact that many entities on the entity list are also on the SDN list. So if that, if that entity is already on the SDN list, you know, your trade compliance team already had to have been performing that 50 % analysis. Now, not all entities on the SDN list. are, you know, there's no one to one overlap here. And so, you know, there are multiple lists that are that are potentially overlapping, for example, the Department of Defense has its own 1260 H list. Many entities on this 1260 H list, which, you know, has the goal of the policy goal of targeting military-civil fusion in China. Some entities in the 1268 list are also in the entity list. Some entities are in the entity list and also in the SDN list. That's why we have a consolidated screening list, right? But... To your point, there are many, many potential subsidiaries that would not have been caught only by the OFAC 50 screening process. And so what we've done at Sayari, as soon as we heard, you know, hey, there is a draft rule, even before, you know, it went up in the federal register, because it hasn't. As soon as we heard there's a draft rule in the works, we started harvesting all of that seed data. Basically the seed risk data is actually the entity list, but also the corporate registry filings from China, from Russia, from Pakistan, from Germany, the UK, the UAE, et cetera. And then calculating multi-hop ownership through I believe at this point it's up to six hops of ownership. So six levels of potential subsidiaries using that 50 % OFAC logic. Now, BIS has not, because this has not been published, we do not have official confirmation that it would be the exact same logic that OFAC uses. I think we can assume it will be. But you know, the OFAC, algorithm has some nuances, right? They account for direct and indirect ownership. They also account for aggregate ownership, meaning if there are two separate SDNs that own a third non SDN company, that third would be considered sanctioned by extension. And so we don't know if that exact same nuance will apply if you know, they will take the aggregate logic as well if they will. you know, also consider indirect ownership. think we can assume they might take the it would be it would be the logical step to take the same OFA guidance. But but there hasn't been actual confirmation of what exactly the 50 % application is going to be like and 50 % applications, you know, it's, it's difficult. The U S has its own application. The UK has a slightly different application. The EU has a slightly different application. So we can only hope that the BIS actually follows the same U S application that OFAC. Jeff (33:28) So help me understand this. If the goal is to expand the net wider to capture more of these so-called bad actors by getting a hold of their subsidiaries, what's to prevent a company to change all of its legal entity structures to be 49 % as opposed to 50? Melina (33:54) I mean, that's always the catch, right? The assumption here that OPEC has been guided by is over 50 % ownership indicates direct control, right? Direct control, whether that's through like voting stake or direct actual shareholder. And that decision-making can be made by that 50%. Now, of course, the risk remains. Jeff (34:06) Right. Melina (34:20) the risk remains. Bad actors evolve quickly. They're very adaptable. They're very adaptable. I I was doing some research about how quickly, you know, for example, Mexican cartels operate, which is a completely different typology we're talking about here. But at the end of the day, you know, these actors utilize the same ports, these actors utilize the same global economic system, the same banks. a lot of times and so we should expect them to evolve and I would say is there something preventing them from you know tweaking their ownership structure, creating a few shell companies here and there and having that threshold be lower? They can. And that is where it is really imperative that the guidance is clear because you know For OFAC, ownership is sanctioned by extension, but control is more nuanced. Control is more nuanced and it's not directly sanctioned. And so if it's control without ownership, OFAC has guidance and, you know, ultimately there are plenty of law firms and I'm sure, you know, most companies have general counsel that would be able to advise on those specific nuances and give, you know, a go or no go. But it's really important that the guidance is clear. What happens is it 50 % only, is it 50 % aggregate? I really hope that guidance is there for industry and honestly for technology companies like us also to actually provide the solution that mirrors the regulation exactly as it is written. Jeff (35:52) Yeah, no, mean, it's obvious that there is a challenge if you're BIS to really try to address this. But as a company who's trying to, you know... transact business globally, it's really difficult. And so it's wonderful that we have tools and systems like Solox, Sayari's solution. And so let's just shift over to your tool and let's talk about that. So how, can a company prepare for this sort of complex rule that's coming? Melina (36:23) Yeah, absolutely. And that gets at the heart of the issue, really. I think an anecdote here. So I was at a conference last week. The chatter around this, there was a lot of it. There was a lot of it. And the head of trade compliance at a conglomerate company, you know, came to me and she said, we don't even know where to begin. Because our OFAC You know, our OFAC or our sanction screening department is already really robust and we've had a lot of time to adapt and we have the SME in-house. But we really don't even know where to start with this potential BIS ruling. It is difficult. It might be insurmountable. We're not resourced. We're probably not going to get further resourcing. And, you know, in her organization, it seemed like, you know, the sanction screening had a bit of a different mandate and was in a bit of a separate budget, you know, let's say line from, you know, actual exports compliance. so I want to challenge that it would be insurmountable or really difficult to just get started. And that's where tools like Sayari can come into place. I don't think exporters have to start from scratch. Honestly, expecting exporters to map every single subsidiary across 190 countries. in corporate records that are in disparate languages, disparate structures and formats. Some of them are even inaccessible by design, right? Where do they even get started? You know, my answer there is solutions like Sayari are the right starting point because, you know, we built already this huge network of corporate relationships, of trade relationships, and What the Sayari Screening Solution at this time gives you is a list of a few thousand entities that we have validated through our algorithm. are potential subsidiaries from the list. so Sayari is not going to give you legal advice, say do business, don't do business, apply for a license, don't apply for a license. I'm not here to do that. And our products certainly won't try to do that. But, you know, technology does not take away the need for human judgment. And what we are trying to do and looking to do is give trade compliance teams the right starting point. So then they can decide, hey, you know, all of the information that I had from Sayari is up to date and I can download all of the records and then I can go ahead and escalate this right away to, you know, management or, Hey, look here, I'm seeing a different address from the list. And this is very common, right? Entities that use different addresses in their filings. Maybe I want to take a second look here. I want to ensure that these are the actually true positive. companies that I'm getting a hit on, and I want to make that judgment call. So what we are trying to do here is by no means eliminate the element of human judgment, but actually give teams the power to make decisions faster. And so that is the way that we are trying to transform our really time consuming process into a more streamlined process. you know, let's take this example of this trade compliance leader that I was talking to. If they are, for example, shipping hundreds of thousands of commodities or actual shipments from a few hundred commodities, it would be an impossible feat for them to really go ahead and build all of that manually. so the flag that you would get with Sayari is not the end of the process, but it is the beginning of that high value human work. So I would say, you know, that that's how our solution can really help. Jeff (40:14) So if I understand, just kind of what you've described as an exporter, let's say, or a trader, I'm facing this daunting task of trying to understand who I'm actually dealing with. So what your tool will give me is it gives me data, relationships of companies and entities in countries, and it allows me then to gather that data and then use my own judgment. based on my risk tolerance to try to determine whether I should proceed or I shouldn't proceed. Is that a fair way of describing? Melina (40:50) Yeah, yeah, absolutely, absolutely. And we have, we're talking about the entity list right now. So yes, we have developed this for the entity list. We developed it in record time. But our tool can do that for a multitude of regulations, right? Our tool can do that for the UFLPA list. Our tool can do that for the good old SDN list. And so for UFLPA, we have a few, you know, additional methodologies, like looking at Jeff (41:10) Yes. Melina (41:16) the actual unified Chinese social credit codes to see where a company was actually registered, looking at the business purpose, extracting keywords to see, might there be forced reeducation is how they frame it, right? In this company and we package that into what we call our risk factors, right? For the entity list, we have a specific set of risk factors. They are the, I believe BIS50 is what we're referencing those risk factors as. We have those risk factors available in our software tool. So in Sayari Graph, in Sayari Map, and then we also are offering a specific data file that only includes the names of the actual potential subsidiaries. Jeff (42:09) Well, before we kind of wrap up, Molina, can you kind of maybe just walk through a hypothetical case? So let's say I'm a trader and I've got a customer that I want to sell my product to who's in, let's just say, let's say in China. What would I do to your tool? Walk me through kind of a case how this works. Melina (42:26) Yeah, I mean... Look, I mean, if you have a customer in China, I would say the process is maybe a bit more straightforward. But let's say your customer is in Malaysia or ⁓ in Thailand, you you wouldn't necessarily know who is their buyer, right? That is something that Sayari can help with. So for instance, if we look at the entity list, let's say, you know, Jeff (42:41) Okay, yeah. Melina (43:00) you are looking to ship either, you know, semiconductors or a harmless consumer good. That difference is what Sayari can help you map. But, you know, at the end of the day, having the data from those over 60 countries and having that specific bill of lading data, having that corporate data, what it helps you is, to actually make a judgment call. Is my customer supplying the same good that I am sending or a transformed good with the same input to that Chinese company? is this Chinese company their customer but on a completely different value chain that has nothing to do with me, right? That is what you can tell through Sayari. Instead of going and asking your customer, you using this, what I'm shipping to you in order to ship it to China, you can tell. And then you can also validate that your supply chain is clean, that you can have that peace of mind by validating through the data that we have. that there's nothing to worry about. And that's also a lot of value, not just identifying where there's risk, but the absence of risk is just equally important. So that's how our solutions can continue to help. Jeff (44:21) Yeah, no, that's fantastic. Thank you for kind of going through that. This is an audio podcast, so we can't do visuals, but I have seen the visuals I sat in the conferences and I saw your tool in action and I saw the way you way you map and how you can figure out the connections of different entities to one another and how that, like you said, either, you know, emphasizes or identifies a risk or or not. And allows you to then proceed forward with with a. Melina (44:24) you Jeff (44:47) a sense of security. ease and confidence, absolutely. Well, you know, I want to, as we close, Malina, just mentioned that, know, Ciari, from what I've seen, just looked like an amazing tool to help. How does one engage? Melina (44:51) Yeah, ease and confidence, that's the goal. Yeah, absolutely. So we have on our website, well, the first thing that I'm going to say is I'm going to recommend folks to actually go ahead and register for our webinar that happened a few days ago. I believe you can still get a copy of the recording because it was on this very same topic and we had a fantastic line of speakers. But yes, we have a website, we have a contact form. You can receive a demo if you fill out that contact form within a matter of like, I believe less than a week and go from there. And, you know, as I said, we have, are a multi-product company now, so you can absolutely explore what might be the solution that best fits your needs. Jeff (45:53) Yeah, saw, I participated in a series where you're looking at managing tariff risk. I saw that, I know there's AI work going, so it's very exciting to see all the things that you guys are developing. And I would highly recommend our listeners, if this has piqued your interest, if this is an area that you are concerned about, I would highly recommend. Melina (45:59) Mm-hmm. Jeff (46:13) you know, taking a look at the webinar and probably your website and to explore this further. As we finish, Melina, just anything else that you wanted to communicate before stop. Melina (46:24) point that I wanted to touch on, the key is for companies to shift from a reactive compliance posture to a proactive posture. And understanding your risk exposure really starts now. As I said, at its core, it is a data problem. Corporate ownership information is incredibly fragmented. It's spread across hundreds of different government registries around the world. And so it's not something you can just Google. That is the fundamental hurdle, but it is the truth and companies engaging in global trade should have really robust programs that utilize the tools of the modern era. So checking entities, checking exporters against a static list is not going to cut it in this ever-changing world. we have new regulations coming out all the time. and so how our tools can help is helping you become that proactive compliance team that is tracking when a regulation may come up, when it may be published and you know, you've already done the work of checking that your specific supply chain, who your customers are, who your buyers are. are in compliance with all of the rules. Melina (47:43) closing remark, I would just say, you know, we talked in depth about the specific regulation. And this is part of a much broader toolkit of regulations in a much broader geopolitical scenario with everything that's going on between the US and China from, you know, the removal of the de minimis exception that they had to the entirety of what's been the past few months with tariffs. so These are the regulations that Sayar in general can help with. But just kind of closing and emphasizing that we are here to empower the analysts, to empower the trade compliance professional to do their jobs faster. so really glad to be here, Jeff. It was a pleasure talking to you. And I can tell you have so much industry knowledge on these very same topics. So yeah, thank you very much for having me. Jeff (48:34) It's been wonderful to have this conversation and I wish you all the best as you go forward. It is a very interesting time that we live in for sure. So thanks again. Thanks again, Malina. Take care. Have a great day. Melina (48:42) Yeah, yes. Thank you, Jeff. Thank you. Jeff (49:03) You have been listening to episode 13 of Writner Reflections, a forum for addressing the dynamic, complex, and essential nature of cross-border trade in our ever-changing world. Thank you for joining me today.