Certified Global Sanctions Specialist - CGSS Exam Practice Test

Question 1

An entity not listed by the Office of Foreign Assets Control is attempting to open a bank account in the US. During the screening process, an employee learns that the entity's ownership exceeds the 50% aggregate Specially Designated National ownership threshold. How should the employee proceed?

A. Obtain senior management approval to proceed with the account opening.

B. Reject or decline the account opening and add the entity name to the internal watch list to avoid further business activity.

C. Request that the customer alters the ownership percentage to enable them to open the account.

D. Authorize the account opening as this entity is not considered to be restricted.

Correct Answer: B

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Question 2

A US financial institution finds a customer is listed under the Specially Designated Nationals List in the last Office of Foreign Assets Control (OFAC) update. The customer's accounts are immediately blocked. How quickly should the financial institution report this action to OFAC?

A. 10 business days

B. 13 business days

C. 11 business days

D. 14 business days

Correct Answer: A

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Question 3

What element should be included in an effective export compliance program to address sanctions risk?

A. Implementing letters of credit containing prohibited boycott terms or conditions

B. Outsourcing to freight forwarders who have excellent expertise and guidance

C. Conducting payment screening according to formalized procedures

D. Collecting of vouchers

Correct Answer: C

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Question 4

Which are common misconceptions related to an effective sanctions program? (Select Two.)

A. The individual or entity is not explicitly named on a sanctions list, therefore there are no potential sanctions risk.

B. An individual sending a USD wire that automatically involves the US sanctions.

C. A US citizen has been working in the EU and thus, US sanctions do not apply.

D. A company must assess sanctions risks during the due diligence phase of a merger and acquisition.

E. Parties involved in import or export and related transactions could be subject to financial sanctions.

Correct Answer: A,B

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Question 5

According to the Office of Foreign Assets Control (OFAC), USD can be used in transactions with Cuba when the transaction involves:

A. US companies.

B. both Cuba and other countries as well.

C. certain circumstances allowed by OFAC.

D. specific companies.

Correct Answer: C

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Question 6

If a financial institution's filtering system generates an alert matching a client to an individual on the Specially Designated National List, which investigation process should the financial institution follow?

A. If the customer is an individual whose last name matches the alert, but whose first name does not match, the investigation should continue by contacting the customer for more information.

B. If the customer is a vessel with the same name, the investigation should continue to establish who is the owner of the vessel.

C. If the customer is an individual with a match on the first and last name, and the country of birth, but not on the country of residence, then there is no need to proceed further with the investigation.

D. If the customer is an unrelated company with the same name, there is no need to proceed further with an investigation.

Correct Answer: B

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Question 7

The legal counsel of a Canadian-based entity is drafting a contract in connection to selling goods to a legal entity client incorporated in Iran that operates in the financial sector of the Iranian economy. Which item should be addressed in the contract?

A. Parties must commit to issue or receive all payments related to the contract via cross-border wire payments denominated in US

B. Parties must commit that the transaction will be conducted in compliance with Canadian sanctions related to Iran.

C. Parties must commit to comply with EU operators' obligations outlined under the EU's blocking statute.

D. Parties must commit to avoid mentioning or including any reference to Iran in financial transactions related to the contract.

Correct Answer: B

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Question 8

A person designated by the Office of Foreign Assets Control (OFAC) as a Specially Designated National (SDN) sets up a company in a tax haven country to receive income from a consultancy business. Which is correct with respect to the company?

A. It is not subject to OFAC sanctions

B. It cannot be sanctioned by OFAC because it is set up in a tax haven country.

C. It cannot transact through a US Bank, as it is owned by an SDN.

D. It can transact freely in USD through a bank account held with a non-US Bank.

Correct Answer: C

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ACAMS Certified Global Sanctions Specialist - CGSS Exam Practice Test

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