Sanctions Compliance Specialist Certification Examination

Welcome to your Sanctions Compliance Specialist Test

This Test will run for 100 minutes.

Name

Organisation

The concept of KYC was 1st mentioned by the Basel Committee on Banking Supervision (BCBS) in …. with regards to Credit Risk Management in banks.

A. 1888

B. 1978

C. 1988

D. 1998

The Sanctions Screening Compliance Risk-Based decision may include the under-listed, except

A. Lists - Establish criteria and technology process to ensure that lists are only screened against a subject of data relevant to a specific jurisdiction

B. Exclusions - The addition of a party that poses low sanction risk to a list of parties omitted from screening, or the use of conditioned screening rules using list data or source data attributes

C. Suppression - The use of suppression rules or “Good guys” lists to manage common false positive alerts requiring unnecessary manual review

D. Removal – The use of conditions and special algorithms to remove some bad-guys who bring huge business volumes, values and turnovers in terms of transactions

The following are redflags associated with misuse of Special Purpose Entities (SPE)?

A. Transactions involving shell companies

B. Multiple unrelated customers with the same physical address

C. Use of third-parties as fronts for transactions

D. All of the above

Several cases of sanctions violations manifested some trends and patterns in redflags among which are;

A. Use of forged documents

B. Use of multiple depositors

C. Use of shell or front companies

D. All of the above

Which of the following are the redflags associated with sanctions circumventions;

A. Obscuring information on payment messages

B. Misuse of cover payments

C. Layered routing of payments

D. All of the above

Sanction Screening usually consists of:

A. Policy & Procedure

B. Program & Process

C. Transaction & Customer

D. Simple & Complex

The following are best practices for Sanctions reporting except

A. FIs must report all blockings to the NFIU and also inform the customer immediately.

B. Once assets or funds are blocked, they should be placed in a blocked account

C. FIs must keep a full and accurate record of each blocked or rejected transaction for at least five years after the date of the transaction

D. For blocked property, records must be maintained for the period the property is blocked and for five years after the date the property is unblocked.

Secondary consequence for FIs that fail to carryout appropriate Due Diligence include which of the following.

A. Fines

B. Conviction

C. Penalties

D. Reputational Damage

Sanctions can be any of the following except;

A. Positive

B. Negative

C. Positive or Negative

D. None of the above

FIs may amend information for payments to shield sanctioned persons and/or entities by, except;

A. Attempting to circumvent sanctions by withholding information

Remove customer’s details

C. Alter references to sanctioned parties when issuing and processing cheques

D. Updating customers’ data in the system to ensure their correctness and completeness.

Sanctions Compliance Programme in a financial institution can fail because of;

A. Failure to reinstate fraudulent employees who circumvented due processes and procedures in some financial transactions

B. Recognition of whistleblowers that expressed genuine concerns on some misdemeanour and unethical practices by service providers in the bank.

C. Failure of screening applications (i.e. non-inclusion of alternative spelling such as Soudan instead of Sudan

D. None of the above

In Sanctions Compliance, once the property has been blocked, the FI should;

A. Maintain records for the period the property is blocked and for five years after the date the property is unblocked

B. Not maintain records for the period the property is blocked

C. Not maintain records after the date the property is unblocked

D. Allow affected customer access to the blocked property since the customer owns the property

The following are the qualities of effective screening application except

A. Implementation of CTR rule to screening

B. Implementation of RBA rule to screening

C. Data Quality

D. Quality Alert generation

A situation where non-US FIs have been subjected to penalties for disguising the identity of their customers when clearing USD-denominated transactions through US correspondent banks is known as?

A. US FI offshore transactions

B. Non-US transactions in Foreign Currency (FX)

C. Misuse of Cover Payments

D. Misuse of banker-customer relationship for transactions across jurisdictions.

Comprehensive economic sanctions, target

A. “Both the micro-economy and micro-politics of states, so that punishments are extended over wide segments of the population”.

B. “Both the macro-economy and macro-politics of states, so that punishments are extended over wide segments of the population”.

C. “Both the mini-economy and mini-politics of states, so that punishments are extended over wide segments of the population”.

D. “Both the foreign-economy and foreign-politics of states, so that punishments are extended over wide segments of the population”.

Sanctions Screening compares;

A. Data sourced from vendors’ operations, against lists generated from market intelligence for effective decision-making.

B. Data sourced from competitors marketing activities against industry benchmarks to determine how to make future projections.

C. Data sourced from an FIs operations, such as customer and transactional records against lists of names and other indicators of sanctioned parties or locations.

D. None of the above

Compliance Training is absolutely an essential element of effective and efficient compliance programme and should, except;

A. Occur at least annually

B. Involve business side personnel as well as compliance personnel

C. Include Board, Management and entire employees

D. Not include staff members as they were employed because they are knowledgeable

Customer Risk Assessment involves except;

A. FI should have effective Customer Due Diligence (CDD) at onboarding and through regular monitoring.

B. FIs should conduct broad screening to include corporate principals and addresses

C. FIs should understand and screen beneficial owners

D. FIs should check how much is expended on diesel to ensure appropriate cost reduction

In the OFAC Sanctions Compliance Regulation, what does SSR?

A. South-South Region

B. Sudanese Sanctions Regulations

C. Surrender Solidarity Resolutions

D. Switzerland Solid Regulations

The following are standard of CDD except:

A. FATF Recommendation 10

B. MLPA Section 3

C. CBN AML/CFT Regulations 2013 (As Amended)

D. BOFIA 91

What is the correct interpretation of screening outcome when test says “you have it” and you really don’t have it’?

A. True negative

B. False positive

C. False negative

D. True positive

Due diligence can be described as any of the following except

A. It involves collecting and analyzing data, information and facts about a customer that should enable the bank assess the extent to which the customer is exposed to a range of risks i.e ML, TF, Fraud, etc

B. It is the duty of care undertaken from the beginning of business relationship and continuing throughout the lifespan of the relationship in order to serve the customer efficiently and effectively

C. It involves profiling and monitoring the customer appropriately in order to mitigate risks, threats and vulnerabilities throughout the relationship with the bank.

D. Due diligence involves collecting and analyzing traffic data, information and facts about weather for due diligence purposes that enables the bank to assess the extent to which the customer visit the bank to access its services especially during drizzling periods.

Sanctions are laws and regulations enacted by governments (such as USA, international organizations (such as the United Nations) and supranational bodies (such as the European Union) to:

A. Punish political opponents and ensure they do not gain political power.

B. Fight foreigners who are not supporting foreign governments

C. Support national security interests and/or promote foreign policy objectives.

D. Monitor the developing countries and their governments

Which of the following components of control mechanisms constitutes the correct set of four (4) controls (4Cs) of Due Diligence:

A. Preventive, Defective, Corrective and Directive

B. Preventive, Detective, Corrective and Directive

C. Preventive, Detective, Corrective and Decisive

D. Preventive, Detective, Connective and Directive

The following is not a component of Risk and Compliance Management;

A. Customer Due Diligence (CDD)

B. Board of Directors Remunerations

C. Sanctions, PEP, and Screening Data

D. Transaction Screening

Which one of the following should FIs and DNFBPs not do when they unable to satisfactorily complete Due Diligence?

A. not enter into business relationship

B. onboarding officer should inform his/her supervisor/management of failed and unsatisfactory DD exercises

C. consider making a suspicious transaction report

D. Show appreciation to the prospective customer’s ingenuity and interest in the FI and DNFBP despite observed defects while requesting their return.

The acronym SDN stands for;

A. Syndicate of Developed Nations

B. Special Democratic Nations

C. Specially Dedicated Negotiators

D. Specially Designated Nationals

OFAC can issue a license to engage in an otherwise prohibited transaction when it determines that the transaction, except;

A. does not undermine the U.S. policy objectives of the particular sanctions program

B. is otherwise justified by U.S. national security

C. is not against US foreign policy objectives

D. is in support of Iran and/or North Korea’s foreign policy

What does ITSR represent in Sanctions Compliance Programme as relates?

A. Irish Transformation States Register

B. Iranian Transactions and Sanctions Regulations

C. Italy Transit Self Register

D. None of the above

OFAC-sanctioned parties in the OFAC Sanctions Compliance Regulations refer to the following parties;

A. Entities only

B. Individuals only

C. Entities and individuals

D. None of the above

Which of the following is not a violation of Trade Finance redflag;

A. Inconsistent terms in the documentation

B. Shipping documents that state consignee’s name and address

C. Destinations referenced are very general (e.g., Russia)

D. Transactions that are inconsistent with the customer’s stated normal business.

The SDN Controlled Entities include except;

A. While majority ownership can be problematic, entities control by an SDN can prove even trickier.

B. According to OFAC “an entity that is controlled (but not owned 50% or more) by one or more blocked persons is not considered automatically blocked pursuant to OFAC 50%” However, it warned that such an entity could eventually be placed on the SDN list.

C. Entity control tipped up ExxonMobil to the tune of $2m. According to OFAC enforcement, ExxonMobil entered 80 business agreements with an entity (not in the SDN list) that were signed by an Russian Oligarch who was on SDN list. In this regard to its 50% rule OFAC specifically states that “US persons should be careful when conducting business with non-blocked entities in which blocked individuals are involved. Furthermore, they may not enter into contracts that are signed by a blocked individual”.

D. All of the above

Datasets for Sanctions Screening Compliance is generated from which of the following;

A. Global Sanctions list – including OFAC List

B. Global PEPs and Adverse Media

C. Global Financial Regulators and law enforcement

D. All of the above

FIs and DNFBPs should perform ………….. Due Diligence where high risks have been identified.

A. Simplified Due Diligence (SDD)

B. Enhanced Due Diligence (EDD)

C. Moderate or Standard Due Diligence (MDD)

D. None of the above

AML/CFT Compliance training ensures that all staff are acquainted with except;

A. how sanctions apply

B. the compliance procedures

C. knowledge of elections in developed countries

D. how to escalate concerns

One standard strategy and technique that is commonly used in Sanctions Screening Compliance and other Compliance activities is known as Four-Eye-Review and this means that a certain activity, for example a decision/transaction must be processed and/or approved by at least;

A. A compliance specially naturally gifted with four-eyes.

B. An experienced and trained compliance officer who has good attributes of foresight and hindsight.

C. Two (2) persons/employees (maker and checker).

D. A board member who has fierce looks and intimidating personality to ensure he/she can punish any erring employee

Which of the following are considered as Aggravating Factors under General Factors Affecting Administrative Action under OFAC’s Sanctions Enforcement Guidelines;

A. acted with reckless disregard and failed to exercise a minimal degree of caution or care with regard to the conduct that led to the Global Settlement Apparent Violations

B. had actual knowledge and/or reason to know of the conduct at issue, and various supervisory and managerial personnel from multiple business lines, often including those with responsibility for financial crimes and sanctions compliance

C. The Global Settlement Apparent Violations resulted in significant harm to multiple economic sanctions programs, and provided persons subject to U.S. economic sanctions access to the U.S. financial system

D. All of the above

Screening should be undertaken as part of an effective compliance program to assist with the following, except;

A. identification of sanctioned individuals

B. identification of competitors

C. identification of organizations

D. identification of illegal activity to which the FIs is exposed

The FATF Recommendation that expressed the following statement is known as Recommendation what ……. If a financial institution suspects or has reasonable grounds to suspect that funds are the proceeds of a criminal activity, or are related to terrorist financing or sanctions, it should be required, by law, to report promptly its suspicions to the Financial Intelligence Unit (FIU)

A. FATF Recommendation 23

B. FATF Recommendation 22

C. FATF Recommendation 21

D. FATF Recommendation 20

For internal controls and compliance mechanisms to be effective and efficient, the FIs should ensure they include policies and procedures that will identify and stop suspicious activities hence they should have the following attributes except;

A. FIs should ensure the policies are easy to understand and relevant to how the organization actually functions.

B. FIs should ensure the policies are designed to satisfy the whims and caprices of the Board of Directors

C. FIs should ensure the policies are designed to satisfy counter what competitors are doing.

D. None of the above

Common Pitfalls in relation to Trade Facilitation include except;

A. This involves facilitating transactions by non-US persons (including through or by overseas subsidiaries or affiliates).

B. Persons subject to US sanctions jurisdiction must not approve or “facilitate” transactions by non-US persons where they themselves could not engage in such transactions because they involve for example OFAC-sanctioned persons, countries or regions.

C. Such prohibited facilitation has also occurred where a US organization has referred business in which it could not participate to its non-US affiliates

D. All of the above

In order to circumvent OFAC Sanctions Regulation, Société Générale S.A. often processed the referenced transactions that violated Sanctions regulation in a non-transparent manner that;

A. Removed

B. Omitted

C. Obscured, or otherwise failed to include references to OFAC-sanctioned parties in the information sent to the U.S. financial institutions that were involved in the transactions

D. Reported the transactions to FinCEN

The following are some of the required Due Diligence measures, except;

A. FIs & DNFBPs should identify the customer and verify customer’s identity using reliable, independent source data or information

B. FIs & DNFBPs should understand and as appropriate obtain information on the purpose and intended nature of the business relationship.

C. FIs & DNFBPs should conduct ongoing due diligence on the business relationship

D. FIs and & DNFBPs should ensure due diligence is done on customer’s social and sports club to understand if he or she is a good sports person and philanthropist

According to FATF standard on CDD, when is Due Diligence required

A. After severing relationship

B. On Suspicion of ML/TF

C. When conducting business relationship

D. Upon request from relevant agencies

Why is there need for an FI to have a PEP database for screening PEPs who consist of persons and/or entities in countries and territories across the world, that are persons/customers that occupy positions of authority in government/public sector?

A. To identify PEPs and deploy appropriate compliance risk management framework to manage PEP relationship as stipulated by regulations

B. To identify PEPs and treat them with very high respect because they are untouchables

C. To identify them and ensure due diligence is not conducted and their transactions are never delayed

D. To identify PEPs and their associates to ensure FIs always recognize them during festive periods and that their transactions never screened

Which of the following constitute Mitigating Factors under General Factors Affecting Administrative Action under OFAC’s Sanctions Enforcement Guidelines?

A. cooperation throughout the course of its investigation

B. remedial efforts in order to curtail and inhibit similar apparent violations from occurring in the future

C. not received a penalty notice or Finding of Violation in the five years preceding the earliest date of the transactions giving rise to the Global Settlement Apparent Violations

D. All of the above

Sanctions Screening Compliance can be conducted in different ways or modes except;

A. Batch sanctions screening

B. Single sanctions screening

C. Only End-Of-Year (EOY) batch process

D. Online real-time

‘Sanctions’ is a term used to …

A. Describe a range of punitive legislative provisions that are put in place with a view to altering political and/or military behavior.

B. Describe a range of regulatory benefits that are put in place with a view to promoting financial behaviour.

C. Describe a range of industry standards that supports professional and ethical behaviour in the banking industry.

D. None of the above

COMMON PITFALLS: SOFTWARE GLITCHES

A. Sanctions screening software or filter faults also accounts for sanctions compliance failure

B. The results of a sanctions screen are only as good as the data they are based on.

C. Failing to use current sanctions screening software or lists, failing to use proper identifying information or failing to account for alternative spellings—a common issue when dealing with names expressed in different languages—can result in missed search hits, which in turn can result in violations.

D. All of the Above

What is the correct interpretation of screening outcome when test says “you don’t have it” and “you really don’t have it “?

A. True negative

B. False positive

C. False negative

D. True positive

The following are some the required functionalities of an effective screening solution, except;

A. Ability to implement risk-based screening rules

B. Determination of variance in government budget – in line with public revenue and expenditure framework

C. Ability to generate good quality alerts for review

D. Provision of relevant metrics and reporting

What does SDN stand for?

A. Specially Democratized Nations (SDNs)

B. Specially Designed Nations (SDNs)

C. Specially Detained Natives (SDNs)

D. Specially Designated Nationals (SDNs)

According OFAC, Standard Chartered Bank (SCB) Settles Potential Civil Liability for Apparent Violations of Multiple Sanctions Programs: Standard Chartered Bank has agreed to settle potential civil liability for apparent violations of, except;

A. the now-repealed Burmese Sanctions Regulations (BSR

B. the Cuban Assets Control Regulations, 31 C.F.R. Part 515 (CACR)

C. the Iranian Transactions and Sanctions Regulations, 31 C.F.R. Part 560 (ITSR)1

D. The Ghanaian Sanctions Regulation (GSR)

FIs should deploy an independent risk based testing and validation regime to ensure that the screening application

A. Generates expected alerts

B. Identifies threshold settings

C. Screening rules to forego or suppress undesirable alerts in accordance with the FI’s risk appetite.

D. All of the above.

…………. is a varied and algorithm based technique to match one name (a string of words), where the contents of the information being screen is not identical, but its spelling, pattern or sound is a close match to the contents contained on a list used for screening – (Soudan, Sudan, etc.) to set the screening fitter.

A. Buzzy matching

B. Muzzy matching

C. Fuzzy matching

D. None of the above

FIs should conduct audits to ensure;

A. That the FI can accurately identify sanctions compliance program weaknesses and deficiencies and remediate and improve, as needed

B. That the FI identifies unionist in the organization for witch-hunting

C. That the FI identifies employees that are not in the camp of Management for them to be terminated.

D. All of the above.

It is necessary for FIs & DNFBPs to apply DD measures to existing customers:

A. On the basis of materiality risk

B. On such existing relationships at appropriate times.

C. When customers exit the financial institution to know why they are going over to the other competing FIs and DNFBPs.

D. By taking into consideration when previous DD was done and the adequacy of data.

Targeted sanctions are “directed at except:

A. Leaders

B. Their core allies in the regime’s hierarchy

C. Targeted bank

D. Specific enterprises and agencies engaged in the proscribed behavior

Sanctions can also be internal or external. Internal sanctions are consequences imposed by organization based on compliance with internal rules. External sanctions on the other hand are consequences imposed by others including:

A. Regulators

B. Supervisors

C. Board of Directors

D. Other statutory bodies

An international FI can determine that its policy should prohibit any dealing with any party (entity, organization or persons) sanctioned by which of the following;

A. US

B. UN

C. EU, its home country and any other number of its are jurisdictions of operations

D. All of the above

Which of the following represent the fundamental pillar(s) of an effective sanctions screening governance or regime?

A. Policies and Procedures

B. Responsible Person

C. Risk Assessment

D. All of the above

Screening in Compliance usually consists of:

A. Visitors Screening and Customer Screening

B. Competitors Screening and Customer Screening

C. Transaction Screening and Customer Screening

D. Regulators Screening and Customer Screening

The 50% OFAC Sanctions Compliance Rule has to do with except;

A. All U.S. Persons and entities and FIs that process dollar-denominated transactions with correspondent banking relationships in the US, no matter their size are subjected to OFAC compliance and are prohibited from doing business with anyone OFAC has placed on its Specially Designated Nationals and Blocked Persons (SDN) list.

B. OFAC expects “any entity owned in the aggregate, directly or indirectly 50% or more by one or more blocked persons is itself considered to be a blocked person”

C. FI doing business internationally are enjoined to maintain a culture of compliance where frontline staff are encouraged to follow-up on sanctions issues.

D. All of the above

US Sanctions - When was the First US embargo imposed?

A. 1875

B. 1775

C. 1795

D. 1975

Primary sanctions for FIs that fails to carryout appropriate Due Diligence include the following except.

A. Fines

B. Conviction

C. Penalties

D. Reputational Damage

Which of the following does not fit into this statement: The aim of targeted sanctions is to …, …, or … consequences for the broader public:

A. Minimize unintended

B. Undesirable

C. Indiscriminate

D. Understandable

In relation to the principle that indicates that FIs and DNFBPs should not keep anonymous accounts or accounts in fictitious names under the twenty principles of Due Diligence (DD), the following are some of the redflags except;

A. Names with spelling errors

B. Names with Acronyms

C. Native Names

D. Pseudo names

Office of Foreign Assets Control (OFAC) administers sanctions based on:

A. UK foreign policy and national security goals

B. UN foreign policy and national security goals

C. US foreign policy and national security goals

D. Ukraine foreign policy and national security goals

The following are redflags of sanctions except

A. Lack of transaction originators details

B. Smurfing

C. Shell/Front Companies

D. Authenticated document

There are redflags associated with trade finance violations. Which of the following redflags relate to trade finance violations;

A. Inconsistent terms in the documentation

B. Products referenced are very general (e.g., spare parts, electronics)

C. Transactions that are inconsistent with the customer’s stated normal business

D. All of the above

The term “Responsible Person” in sanction Governance implies:

A. A staff who conducts sanction screening

B. A staff who configure sanction tools

C. A staff who sanction other staff

D. Board Member responsible for screening governance

What is the meaning of OFAC?

A. Office of Foreign Application Control

B. Office of Foreign Arms Control

C. Office of Foreign Assets Control

D. Office of Foreign Assessment Control

According to OFAC, which of the following qualifies as a mitigating factor for remediation of Sanctions violations?

A. A financial institution that has not received a penalty notice or Finding of Violation in the five years preceding the earliest date of the transactions giving rise to the Global Settlement Apparent Violations.

B. A financial institution that has received a penalty notice or Finding of Violation in the five years preceding the earliest date of the transactions giving rise to the Global Settlement Apparent Violations

C. A financial institution that is operating in a non-sanctioned territory

D. None of the above

What is the correct interpretation of screening outcome when test says “you do not have it” and “you really have it”?

A. True negative

B. False positive

C. False negative

D. True positive

Banking Vulnerability in relation to Sanctions Compliance Programme include except;

A. The obligation to comply with sanctions extends to a range of banking products and activities, especially where these relate to commerce.

B. Some FIs have taken significant steps to adapt to the restrictions imposed by sanctions, such as putting standardized sanctions clauses in financial contracts, for example.

C. However, sanctions implementation can be costly and complex and it can be difficult to determine whether compliance policies and procedures meet the challenges

D. None of the above

The regulatory lists are usually sourced from several regulatory bodies and compiled from verified international sources. You can also take advantage of additional enhancements that fill gaps beyond what you can find publicly available. Also, you can get extra protection against sanctioned entities in some key areas, among which are, except;

A. Shipping and vessels

B. Bank locations

C. White-list or Good-Guys list

D. Payment routing

FATF Recommendation 6 is related to:

A. Targeted financial sanctions related to terrorism and terrorist financing

B. Targeted financial sanctions related to Proliferation

C. Targeted financial sanctions related to Money Laundering

D. Targeted financial sanctions related to Fraud risk

The following are the redflags associated with suspicious transactions except;

A. Unusual nature

B. Complexity

C. Consistency

D. Criminality

The Targets of sanctions are:

A. Governments

B. Persons

C. Entities

D. Social Workers

Sanctions screening is a control employed by FIs to do the following, except;

A. Detect sanctions risk

B. Prevent sanctions risk

C. Control reputational risk

D. Manage sanctions risk

Which of the following are the redflags associated with sanctions circumventions;

A. Obscuring information on payment messages

B. Misuse of cover payments

C. Layered routing of payments

D. All of the above

Which of the following form part of evasive practices in Opening Accounts;

A. Listing the accounts in the name of foreign nationals, front companies and family members.

B. Masking illicit transactions through senior Central Bank of Iran (CBI) officials

C. Running procurement networks that use front or shell companies

D. All of the above

Sanctions Screening compares data sourced from an FI’s operations, such as customer and transactional records, against

A. lists of service providers and other indicators showing the best within international and domestic locations

B. List of names and other indicators of sanctioned parties or locations.

C. lists of accounts with good indicators of profitability in the FIs operating locations

D. All of the above

The absence of a written policy is a common root cause of violations and sanctions enforcers considers it;

A. an aggravating factor in enforcement actions.

B. A minor factor in enforcement actions

C. An insignificant factor in enforcement actions

D. None of the above

Which of the following countries is subject to OFAC sanctions;

A. The Netherlands

B. Yemen

C. South Africa

D. Senegal

The following are some of the six (6) Pillars of the 50% Rule of OFAC except;

A. 50% ownership by one or more SDN

B. Iran/Russian based Entities

C. Majority-owned by a sanctioned Government

D. Nigerian/American based Entities

Which of the following can be regarded as consequence(s) of OFAC Sanctions Compliance violations by a financial institution?

A. Reputational damage and adverse negative media

B. Liquidation or winding down of a financial institution

C. Financial penalty or fines

D. All of the above

Sanctions Screening has to do with the following except;

A. Sanctions screening is a control used in the detection, prevention and disruption of financial crime and, in particular, sanctions risk

B. It is the comparison of one string of text against another to detect similarities which would suggest a possible match

C. It compares data sourced from an FI’s operations, such as customer and transactional records, against lists of names and other indicators of sanctioned parties or locations

D. Sanction screening ensures that those that are patronizing competitor FIs are screened out.

COMMON PITFALLS: ROUGE EMPLOYEES

A. In cases where individual employees play an integral role in causing or facilitating sanctions violations, the Framework makes clear that OFAC for example will use its enforcement authority to target the individual employees as well as the entity.

B. Employees that are on transfer to other jurisdictions

C. Employees on vacation

D. None of the above

There are some redflags that are related to the abuse of Suspense Accounts which include the following except;

A. Use of a suspense account where customer identification is not obtained

B. Use of a suspense account where the FI is listed as the originator of the transaction

C. Use of suspense account where any of the party(ies) are sanctioned persons and/or entities

D. All of the above

Redflags for Misuse of Cover Payments include;

A. Receiving MT 202 payment instructions from high risk customers

B. Different payment processing procedures for USD

C. The US correspondent bank that receives and processes the MT 202 only receives information (e.g., address, SWIFT code) regarding the two non-US FIs.

D. All of the Above

Evasion tactics are related to which of the following:

A. Evaders are determined and highly creative

B. Iran has established a dizzying array of front companies.

C. Most the fake companies open and close within a matter of months, leaving little or no paper trail.

D. All of the above

OSCE stands for;

A. Organisation for Service & Consultation in Europe

B. Organisation for Security & Community in Europe

C. Outstanding Security & Cooperation in Europe

D. Organisation for Security & Cooperation in Europe

The ingredients of effective sanctions compliance include except;

A. Management Commitment

B. Corporate Social Responsibility

C. Risk Management

D. Testing and Audit

The Sanctions lists are typically derived from …. and often supplied, updated and maintained through external vendors specialising in the amalgamation, enhancement, formatting and delivery of these lists. FIs may also augment these with lists of sanctions relevant terms, names or phrases, identified through their own operations, research or intelligence

A. Regulatory Sources

B. Competitors’ Sources

C. Market Sources

D. Sectoral Sources

Which of the following is not a pillar of Due Diligence?

A. Customer Acceptance Policy (CAP)

B. Customer Development Process (CDP)

C. Customer Identification Procedures (CIP)

D. Monitoring of Transaction (MoT)

There are certain redflags that are associated with Layering Routing of Payments and they include the following except;

A. Inefficient routing of payments

B. Transactions involving shell companies

C. Transactions that are too complex to be understood

D. Transactions that are consummated for a customer that is well known to the FI.

In a situation where FIs & DNFBPs form a suspicion of Money Laundering or Terrorist Financing and reasonable believe they performing DD process will tip-off the customer the FIs and DNFBPs should, except;

A. Inform the customer of the observation as show of good customer relationship

B. Not continue with the Due Diligence procedures and instead file a Suspicious Transaction Report (STR).

C. Invite the customer for enlightenment as part of financial literacy training and to enable customer understand standard banking procedures for suspicious transactions monitoring

D. None of the above

Customer Due Diligence (CDD) assists an FI in some of the following ways, except;

A. To help the FI at the time the due diligence is carried out, to be reasonably certain that the customers are who they say they are.

B. To understand how the customers are diligent with their families – spouses, children, siblings and/or relatives

C. To protect the FI against any misuse of its products, services and channels by the customer.

D. To comply with required regulations and legislations

What does CACR stand for?

A. Cuban Assets Compliance Reports

B. Congo Assets Control Response

C. Cameroun Assets Control Regulations

D. Cuban Assets Control Regulations

The components of Sanctions Compliance building blocks include except;

A. Culture

B. Compliance

C. Policy

D. Archives

Due Diligence to unravel sanctioned entities should cover

A. Account holders

B. UBO

C. Account holder’s customer

D. All of the above

Which of the following can serve as part of measures of remediation after violation of OFAC Sanction Compliance Regulation by a financial institution?

A. FI exiting a sanctioned country, territory or jurisdiction

B. FI recruiting new Board, senior management, including a new chief executive, chief financial officer, chief compliance officer, general counsel and/or other staff members.

C. Conducting enterprise compliance risk assessment to ascertain the FI’s regulatory compliance risk profile

D. All of the above.

The following are some of the Major Regimes of sanctions except:

A. FATF - FATF Recommendation 6; FATF Recommendation 7; and FATF Recommendation 35

B. Iran – Nuclear Armament and Resolutions

C. UN - Security Council Resolutions and Binding on all UN Member States

D. US - Additional national measures and extraterritorial effect

The following are some of the factors that are attributable to Sanctions Compliance failures, except:

A. Exporting or re-exporting goods to sanctioned jurisdictions

B. Misinterpreting/failing to understand sanctions laws and regulations

C. Processing payments through the US financial system for sanctioned companies/individuals

D. Failure to extend gifts and largesse to some labour union representatives who visited a financial institution

Financial Sanctions;

A. Targets only entities (i.e. freezing and blocking of all properties or interest on properties on the sanctioned targets)

B. Targets only certain Non-Profit-Organizations (NPOs) - i.e. freezing and blocking of all properties or interest on properties on the sanctioned targets.

C. Targets individuals and companies and entities (i.e. freezing and blocking of all properties or interest on properties on the sanctioned targets)

D. Targets some oil producing countries (i.e. freezing and blocking of all properties or interest on properties on the sanctioned targets)

The following are some of the best ways of addressing violations of OFAC Sanctions Regulations, except;

A. Substantial cooperation throughout the course of OFAC investigation

B. Conducting Compliance Internal Investigation and self-reporting the violation to OFAC and the regulatory authority in your jurisdiction

C. Submitting detailed, well-organized, and complete information and documents to OFAC throughout the course of their investigation, irrespective of how long it takes to complete

D. All of the above

Internal Audit should be:

A. Adequately resourced

B. Accountable to senior management

C. Properly trained in regulatory compliance matters

D. All of the above

Transaction screening implies

A. Screening the movement of value in FIs record

B. Screening the movement of value in custom record

C. Screening the movement of funds in FIs Vault

D. Screening the movement of value and fund in FIs record

What does the acronym, WMDPSR, represent?

A. Wealthy Masses Developing People Standard Regulations

B. World Market Day Progressive States Resolution

C. Weapons of Mass Destruction Proliferators Sanctions Regulations

D. None of the above

COMMON PITFALLS: ABUSE OF THE PAYMENT SYSTEM

A. Sanctions evaders have been known to conceal crucial information by utilizing non-standard payment or commercial practices.

B. This is sometimes associated the template used by some global payment systems

C. Such practices are recognized as red flags for sanctions evasion or circumvention. The framework urges organizations subject to US jurisdiction to assess payment or commercial practices in the context of industry norms in order to evaluate their compliance risk, though there is nothing inherently and automatically sanctionable about non-standard terms

D. All of the above

…… are software, documents, diagrams, technology and other related or associated goods normally used for civilian purposes but which may have military applications, or may contribute to the proliferation of weapons of mass destruction.

A. Multiple goods

B. Dual-use goods

C. Industrial goods

D. Foreign goods

Which of the following may be considered an aggravating factor for Sanctions violations according to OFAC?

A. Actual knowledge and/or reason to know of the violation of Sanctions Requirement

B. Adequate Compliance Training

C. Availing Compliance department with adequate human and financial resource

None of the above

A good Transaction Screening Application assists FIs and DNFBPs to, except;

A. Have a system with functionality to validate and make payments, quickly

B. Have a system designed to offer sophisticated, robust, and efficient real-time transaction screening

C. Have a system to will assist in Straight-Through-Processing for everyone across the world to ensure everybody is treated equally since the world one and has become a global village

D. Have a scalable transaction screening solution to enable FIs of all sizes and sophistication to ensure sanctions compliance, reduce illegal transaction processing risk, and establish readiness for regulatory scrutiny

What does the acronym IRISL stand for;

A. Islamic Republic of Iraq Shipping Lines

B. Islamic Republic of Island Shipping Lines

C. Islamic Republic of Iran Shipping Lines

D. Islamic Republic of Israel Shipping Lines

Sanctions screening programme are made up of the following except;

A. Policies and Procedures

B. Risk Assessment

C. Straight Through Processing

D. Testing and independent audit

Which of follow qualify as root cause(s) of OFAC Administrative Sanctions:

A. Lack of a Formal OFAC SCP

B. Exporting or Re-exporting U.S.-origin Goods, Technology, or Services to OFAC Sanctioned Persons or Countries

C. Sanctions Screening Software or Filter Faults

D. All of the above

The following countries, except, are subject to OFAC sanctions;

A. Central African Republic

B. Ghana

C. Burundi

D. Cuba

Do the US sanctions affect Nigerian FIs?

A. Yes

B. No

C. Not sure

D. None of the above

In ensuring that an FI is in compliance with best practice in relation to Sanctions Reporting, which of the following should not be done?

A. FIs must report all blockings to the NFIU immediately

B. Once assets or funds are blocked, they should be placed in a blocked account by the FI

C. FIs must keep a full and accurate record of each blocked or rejected transaction for at least five years after the date of the transaction

D. FIs must brief the press about blocked accounts

FATF Recommendation 35 is about;

A. Countries ensuring that there is a range of effective, proportionate and dissuasive laws to deal with traffic offenders who violate extant regulations, whether criminal, civil or administrative, available to deal with natural or legal persons.

B. Countries ensuring that there is a range of effective, proportionate and dissuasive regulations to deal with politicians who engage in electoral malpractices, whether criminal, civil or administrative, available to deal with natural or legal persons.

C. Countries ensuring that there is a range of effective, proportionate and dissuasive sanctions, whether criminal, civil or administrative, available to deal with natural or legal persons.

D. Countries ensuring that there is a range of effective, proportionate and dissuasive executive order to deal with illegal miners of precious metals and other dissidents, whether criminal, civil or administrative, available to deal with natural or legal persons.

The following are types of sanctions except:

A. Diplomatic

B. Trade

C. Swimming

D. Travel

Sanctions Compliance Specialist Certification Examination

Welcome to your Sanctions Compliance Specialist Test

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