CSS Risk Analysis & Due Diligence 3

Question 1

Which of the following is an indicator of potential sanctions evasion through trade finance?

Accepted Answer

Vague or generic descriptions of goods on shipping documents

Answer

Generic or vague goods descriptions on trade documents are a red flag for potential misrepresentation aimed at concealing sanctioned goods or parties.

Question 2

When assessing the sanctions risk of a private equity fund client, what is the MOST critical due diligence consideration?

Accepted Answer

The identity and sanctions status of the fund's underlying limited partners

Answer

In private equity funds, sanctioned parties can use limited partner positions to move funds, making LP identity and status the most critical sanctions concern.

Question 3

A bank receives a wire transfer where the originator field contains only initials and no address. Under sanctions compliance, this should trigger:

Accepted Answer

A request for complete originator information before processing

Answer

Incomplete originator information prevents proper sanctions screening and must be resolved before processing to avoid potential violations.

Question 4

Which of the following best describes 'secondary sanctions'?

Accepted Answer

Sanctions that target non-US persons for conducting business with sanctioned countries or parties

Answer

Secondary sanctions extend US sanctions reach to non-US persons by threatening them with US market exclusion if they conduct significant business with sanctioned targets.

Question 5

In a sanctions risk assessment matrix, 'likelihood' of a sanctions violation is BEST measured by:

Accepted Answer

The frequency and nature of customer interactions with high-risk jurisdictions or parties

Answer

Likelihood in a risk matrix relates to how often and deeply a business channel or customer interacts with sanctioned or high-risk environments.

(CSS) Certified Sanctions Specialist Practice Test

(CSS) Certified Sanctions Specialist Practice Test

CSS Risk Analysis & Due Diligence 3