CSS CSS Sanctions Program Types & Target Identification 2 — Questions and Answers
Question 1: Under the '50 Percent Rule,' OFAC considers an entity to be blocked if sanctioned persons collectively own what minimum ownership stake?
- 25 percent
- 33 percent
- 50 percent or more (Correct answer)
- 75 percent or more
Correct answer: 50 percent or more
OFAC's 50 Percent Rule states that any entity owned 50% or more (in aggregate) by one or more SDNs is itself considered blocked, even if not explicitly listed.
Question 2: Which designation criterion does OFAC use when targeting persons who provide material support to sanctioned parties?
- Nexus provision
- Support networks clause
- Material support basis (Correct answer)
- Associate entity rule
Correct answer: Material support basis
OFAC can designate persons who provide material support, goods, or services to or in support of already-designated SDNs under various sanctions program authorities.
Question 3: What does the term 'blocked property' mean in the context of U.S. sanctions law?
- Property that is confiscated and transferred to the U.S. Treasury
- Property in which a sanctioned person has an interest that must be frozen and cannot be dealt in (Correct answer)
- Property that is permanently seized by law enforcement
- Real estate owned by foreign governments
Correct answer: Property in which a sanctioned person has an interest that must be frozen and cannot be dealt in
Blocked property is not seized but frozen in place — U.S. persons must hold it in a blocked account and may not transfer, pay, or deal in it without an OFAC license.
Question 4: Which OFAC program imposes sanctions related to weapons of mass destruction (WMD) proliferators?
- WMD Proliferators Sanctions Regulations (31 CFR Part 544) (Correct answer)
- Non-Proliferation Treaty Enforcement program
- Nuclear Weapons Dealers Designation program
- Counter-Proliferation Finance Sanctions
Correct answer: WMD Proliferators Sanctions Regulations (31 CFR Part 544)
OFAC administers the WMD Proliferators Sanctions Regulations (31 CFR Part 544) to target individuals and entities involved in the proliferation of WMD and their delivery systems.
Question 5: A 'front company' in the context of sanctions evasion is best described as:
- A licensed money services business
- A legitimate company that knowingly processes sanctions payments
- An entity that appears to conduct normal business but is actually controlled by or acting for a sanctioned party (Correct answer)
- A holding company registered in a sanctions-free jurisdiction
Correct answer: An entity that appears to conduct normal business but is actually controlled by or acting for a sanctioned party
Front companies obscure the involvement of sanctioned parties by presenting a legitimate business facade while actually facilitating access to the financial system for blocked persons.
Question 6: Which sanctions list maintained by the U.S. Department of Commerce's BIS restricts export privileges rather than blocking assets?
- Entity List (Correct answer)
- SDN List
- SSI List
- Non-SDN PEP List
Correct answer: Entity List
The Bureau of Industry and Security (BIS) Entity List restricts the export, reexport, and transfer of items to listed parties without a license, focusing on export controls rather than asset blocking.
CSS CSS Sanctions Program Types & Target Identification 2
Under the '50 Percent Rule,' OFAC considers an entity to be blocked if sanctioned persons collectively own what minimum ownership stake?