CSS Screening Processes & Compliance Systems 2

Question 1

What is a 'fuzzy matching' algorithm used for in sanctions screening?

Accepted Answer

To identify approximate name matches that account for spelling variations and transliterations

Answer

Fuzzy matching identifies names that are similar but not identical, accommodating misspellings, transliterations, and aliases common in sanctions lists.

Question 2

A bank receives a wire transfer where the beneficiary name partially matches a Specially Designated National (SDN). What is the FIRST action the bank should take?

Accepted Answer

Place the transaction in a pending/hold status while conducting a more thorough review

Answer

A partial SDN match requires placing the transaction on hold while compliance staff investigate further before processing or rejecting.

Question 3

Which OFAC requirement mandates that blocked funds must be reported within a specific timeframe?

Accepted Answer

Blocked funds must be reported to OFAC within 10 business days of the blocking

Answer

OFAC regulations require that blocked transactions be reported to OFAC within 10 business days of the date the property was blocked.

Question 4

What does the term 'nested correspondent banking' present as a unique sanctions risk?

Accepted Answer

It allows smaller foreign banks to access U.S. dollar clearing through a larger correspondent, obscuring the true originator

Answer

Nested correspondent relationships layer additional banks into payment chains, making it difficult to identify the true originating customer and their sanctions exposure.

Question 5

An organization uses a sanctions screening system with a 'threshold score' of 85%. What does this mean operationally?

Accepted Answer

Matches scoring at or above 85% similarity will generate an alert for human review

Answer

A threshold score determines the minimum similarity percentage at which the system flags a potential match for analyst review rather than auto-clearing.

(CSS) Certified Sanctions Specialist Practice Test

(CSS) Certified Sanctions Specialist Practice Test

CSS Screening Processes & Compliance Systems 2