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

OFAC regulations require records of blocked property to be retained for 5 years after the date the property was unblocked, or for the full period of blocking plus 5 years, whichever is longer.

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

When a potential SDN match is identified, the institution should hold the transaction in suspense and perform additional due diligence to determine whether it is a true match before deciding to block, reject, or process.

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 may informally communicate a no-action position to indicate it does not intend to pursue enforcement for a specific described fact pattern, though this is not binding and does not create a safe harbor.

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

Financial institutions must screen all parties to international wire transfers — including originators, beneficiaries, and intermediaries — against OFAC sanctions lists to identify prohibited transactions.

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

OFAC expects compliance programs to be risk-based and scaled to the institution's business profile — a community bank and a global money center bank face different expectations based on their transaction volumes and counterparty risk.

(CSS) Certified Sanctions Specialist Practice Test

(CSS) Certified Sanctions Specialist Practice Test

CSS CSS Financial Institution Obligations & Controls 2