CSS Sanctions Laws & Regulatory Frameworks 2 — Questions and Answers
Question 1: Which statutory authority grants OFAC the power to administer and enforce US economic sanctions programs?
- The Bank Secrecy Act (BSA)
- The International Emergency Economic Powers Act (IEEPA) (Correct answer)
- The Foreign Corrupt Practices Act (FCPA)
- The USA PATRIOT Act
Correct answer: The International Emergency Economic Powers Act (IEEPA)
IEEPA is the primary statutory authority enabling the President to declare a national emergency and delegate authority to OFAC to impose economic sanctions.
Question 2: Under the Cuba Assets Control Regulations (CACR), which category of transactions is generally licensed for US persons?
- Export of luxury goods to Cuban government officials
- Travel-related transactions for educational people-to-people exchanges (Correct answer)
- Provision of financial services to Cuban military entities
- Investment in Cuban state-owned enterprises
Correct answer: Travel-related transactions for educational people-to-people exchanges
OFAC's CACR includes general licenses for certain travel categories, including educational people-to-people exchanges conducted under the auspices of a US organization.
Question 3: What is the legal standard for 'knowledge' that triggers liability under most US sanctions programs?
- Strict liability regardless of knowledge or intent
- Actual knowledge only, not constructive knowledge
- 'Knew or should have known' (constructive knowledge standard) (Correct answer)
- Willful blindness only when proven in court
Correct answer: 'Knew or should have known' (constructive knowledge standard)
US sanctions regulations generally apply a 'knew or should have known' standard, meaning constructive knowledge can trigger liability even without actual awareness.
Question 4: Which UN body is responsible for establishing UN sanctions regimes that member states are obligated to implement?
- The UN General Assembly
- The UN Security Council (Correct answer)
- The UN Human Rights Council
- The International Court of Justice
Correct answer: The UN Security Council
UN sanctions are established by the UN Security Council under Chapter VII of the UN Charter, and are legally binding on all UN member states.
Question 5: What distinguishes a 'sectoral sanction' from a 'comprehensive sanction' in OFAC's framework?
- Sectoral sanctions target entire countries, while comprehensive sanctions target individuals
- Sectoral sanctions prohibit specific transaction types with targeted entities, while comprehensive sanctions broadly prohibit nearly all dealings with a jurisdiction (Correct answer)
- Sectoral sanctions apply only to financial institutions, while comprehensive sanctions apply to all industries
- Sectoral sanctions require a license for all activities, while comprehensive sanctions allow general licenses
Correct answer: Sectoral sanctions prohibit specific transaction types with targeted entities, while comprehensive sanctions broadly prohibit nearly all dealings with a jurisdiction
Sectoral sanctions (e.g., Ukraine/Russia-related directives) restrict specific transaction types such as debt or equity financing with listed entities, unlike comprehensive bans on entire jurisdictions.
Question 6: Under the Trading with the Enemy Act (TWEA), which jurisdiction remains subject to OFAC's Cuba sanctions regime?
- Iran
- North Korea
- Cuba (Correct answer)
- Syria
Correct answer: Cuba
Cuba remains the only jurisdiction still sanctioned under TWEA; other programs were transitioned to IEEPA authority over time.
Question 7: Which EU legal instrument is the primary vehicle for implementing EU autonomous sanctions (i.e., not derived from UN Security Council resolutions)?
- EU Directive
- EU Regulation (Correct answer)
- EU Decision under CFSP
- EU Framework Decision
Correct answer: EU Regulation
EU Regulations under the Common Foreign and Security Policy are directly applicable in all member states and are the primary binding instrument for EU sanctions implementation.
CSS Sanctions Laws & Regulatory Frameworks 2
Which statutory authority grants OFAC the power to administer and enforce US economic sanctions programs?