Missed Questions

Question 1

Which of the following best describes the Financial Action Task Force’s Mutual Evaluation Reports?

Answer 1

Reports that evaluate a country’s compliance with FATF’s recommendations

Question 2

Which of the following is the most common type of sanctions imposed by one nation upon another?

Answer 2

Trade

Question 3

Risk formula suggested by the Wolfsberg Group

Answer 3

Inherent Risk - Impact of Risk Controls = Residual Risk

Question 4

A financial institution’s residual risk can be…

Answer 4

Transferred
Avoided
Mitigated
Accepted

Question 5

What is the role of policies and procedures as aspects of an institution’s sanctions compliance program?

Answer 5

They identify, interdict, escalate, report, and maintain records concerning potentially prohibited activities.

Question 6

How long does a counterparty relationship last?

Answer 6

For the life of the transaction

Question 7

Commerzbank violation of US laws and New York state law could have been avoided by…

Answer 7

US employees having completed the voluntary self-disclosures

Question 8

2014 case of Alex and Gary Tsai - Takeaways?

Answer 8

It is essential to have a thorough knowledge of a customer’s identity and connection to other entities.

Question 9

BNP Paribas case of May 2015 was the first time a US court…

Answer 9

Convicted and sentenced a financial institution for violating the country’s sanctions.

Question 10

This red flag usually requires human assessment - and not automated screening tools.

Answer 10

There is an abnormal shipping route for the product and destination.

Question 11

What was significant about the 2017 case of Access USA Shipping LLC

Answer 11

Access USA set up an internal straw buyer to help a client evade sanctions.

Question 12

What was significant about the Technopromexport case?

Answer 12

The case involved a state-owned company concealing the final destination of goods.

Question 13

Consolidation of goods is

Answer 13

Grouping small shipments into one larger shipment or mixes restricted items in with other goods and does not declare those restricted items in shipping documentation.

Question 14

How does the scope of KYC information used for sanctions compliance differ from that used for AML requirements?

Answer 14

The scope of KYC information used for sanctions compliance can be more limited than that for AML purposes.

Question 15

What is the meaning of “control” with regard to the concept of beneficial ownership?

Answer 15

“Control” recognizes that a person in whose name an account is opened with a bank is not necessarily the person who ultimately controls such funds.

Question 16

Beneficial ownership refers to..

Answer 16

The natural person(s) who ultimately owns or controls a customer and/or the natural person on whose behalf a transaction is being conducted.

Question 17

A financial institution can verify beneficial ownership information about a customer by…

Answer 17

requiring the customer to provide reliable documents, such as government-issued passports.

Question 18

SDD (Sanctions Due Diligence) differs from AML CDD (Customer Due Diligence on beneficial ownership because…

Answer 18

Sanctions 50%
AML 25%

Sanctions applies the “50 percent rule,” while..
AML rules identify a beneficial owner as directly or indirectly owning more than 25% of a legal entity

Question 19

State the significant difference between the EU’s European Best Practice Guidance and OFAC concerning sanctions due diligence and beneficial ownership?

Answer 19

The EU does not apply the aggregate rule generally to ownership interests separately maintained by sanctions targets under the 50 Percent Rule. (Excluding Russia)

Question 20

The four steps for gathering KYC information in the sanctions due diligence research model include:

Answer 20

Assess
Explore
Organize
Present

Question 21

Sanctions risks are potentially higher and more difficult to identify with correspondent banks because…

Answer 21

The correspondent bank may provide services for individuals or entities for which it has neither verified the identities nor obtained any firsthand knowledge.

Question 22

Scenarios are used in sanctions screening to…

Answer 22

Use known typologies to enhance an AST’s ability to detect possible sanctions violations specific to an organization.

Question 23

SWIFT payment messages are predefined by…

Answer 23

Format for type of commercial activity and numbered, set fields

Question 24

What are the five steps in an investigative decision tree?

Answer 24

1) Is there an applicable sanctions restriction?
2) What is this sanctions restriction about?
3) Has this sanctions restriction been violated?
4) How has the sanctions violation occurred?
5) Record and document.