CSS CSS Financial Institution Obligations & Controls 2

Question 1

Under OFAC regulations, financial institutions must retain records of blocked transactions and rejected transactions for at least:

Accepted Answer

5 years from the date of unblocking or for the duration of the blocking plus 5 years

Answer

3 years

Answer

5 years from the date of the transaction

Answer

10 years

Question 2

A U.S. bank receives a SWIFT MT103 payment where the beneficiary name generates a potential SDN match. The bank's first step should be:

Accepted Answer

Place the payment in a suspense account and conduct enhanced screening to determine if a true match exists before blocking or processing

Answer

Process the payment and file a SAR

Answer

Immediately return the funds to the originating bank

Answer

Contact the beneficiary directly for additional information

Question 3

What does OFAC consider a 'no-action' position mean for a financial institution analyzing a complex transaction?

Accepted Answer

OFAC's informal indication that it does not intend to take enforcement action for the specific described conduct

Answer

OFAC will not provide any guidance on the transaction

Answer

The institution may proceed with the transaction without any compliance review

Answer

FinCEN has taken over enforcement responsibility

Question 4

Which OFAC requirement applies specifically to U.S. financial institutions processing international wire transfers related to potentially sanctioned transactions?

Accepted Answer

Screening both the originator and beneficiary of wire transfers against OFAC's sanctions lists

Answer

Concurrent filing of a CTR and SAR for all international wires

Answer

Notifying FinCEN within 24 hours of a potential sanctions hit

Answer

Requiring all correspondent banks to obtain OFAC licenses

Question 5

In evaluating a financial institution's sanctions compliance program, OFAC assesses the program's adequacy based on which primary standard?

Accepted Answer

Whether the program is risk-based, commensurate with the institution's size and complexity, and effectively implemented

Answer

Zero-tolerance — any violation is treated as willful

Answer

Whether the institution has dedicated a minimum of 1% of revenue to compliance

Answer

Whether the institution employs a certified sanctions specialist (CSS) as compliance officer

Question 6

A financial institution's 'blocking report' submitted to OFAC must include which key information?

Accepted Answer

Identity of the account holder, nature and value of blocked property, and date of blocking

Answer

Only the total dollar amount of all blocked transactions in a calendar quarter

Answer

The institution's risk score for the blocked party and basis for the screening hit

Answer

A full AML investigation report including SAR filing status