CFCS CFCS Terrorist Financing & Sanctions Compliance 2

Question 1

Which OFAC program specifically targets organizations and individuals linked to designated foreign terrorist organizations operating in the US context?

Accepted Answer

Specially Designated Nationals (SDN) List

Answer

OFAC's SDN List consolidates all sanctioned individuals and entities across programs, including terrorist organizations, and prohibits US persons from transacting with any listed party.

Question 2

What is a 'false positive' in the context of sanctions screening and why does it matter?

Accepted Answer

A legitimate transaction incorrectly flagged as a match to a sanctions list

Answer

False positives occur when screening systems flag legitimate customers or transactions as potential sanctions matches, requiring manual review and potentially delaying legitimate business.

Question 3

Under OFAC regulations, what is the standard for liability when a US financial institution processes a transaction involving a sanctioned party?

Accepted Answer

Strict liability — violations can occur even without knowledge or intent

Answer

OFAC sanctions violations are subject to strict liability, meaning civil penalties can be imposed regardless of whether the institution knew or intended to violate sanctions.

Question 4

What is 'correspondent banking' and why is it a particular terrorist financing risk?

Accepted Answer

Arrangements where one bank holds accounts for another bank to process transactions, potentially obscuring the ultimate originator of funds

Answer

Correspondent banking relationships allow banks to process transactions on behalf of other institutions, creating layering opportunities where the ultimate beneficial owner of funds can be obscured.

Question 5

What is the primary purpose of the Egmont Group in the context of terrorist financing?

Accepted Answer

Facilitating information sharing and cooperation among Financial Intelligence Units (FIUs) globally

Answer

The Egmont Group is an international network of Financial Intelligence Units that facilitates the secure exchange of financial intelligence to combat money laundering and terrorist financing.

CFCS - Certified Financial Crime Specialist Practice Test

CFCS - Certified Financial Crime Specialist Practice Test

CFCS CFCS Terrorist Financing & Sanctions Compliance 2