CSS Secondary Sanctions & Extraterritorial Reach

Question 1

What is the primary purpose of secondary sanctions in U.S. foreign policy?

Accepted Answer

To deter non-U.S. persons from conducting business with sanctioned parties by threatening their access to U.S. markets

Answer

To penalize U.S. persons who violate primary sanctions

Answer

To freeze assets held in U.S. financial institutions

Answer

To impose travel bans on foreign nationals

Question 2

Which of the following best describes the difference between primary and secondary sanctions?

Accepted Answer

Primary sanctions prohibit U.S. persons from engaging with sanctioned parties; secondary sanctions threaten non-U.S. persons for doing the same

Answer

Primary sanctions apply to state-sponsored actors; secondary sanctions apply to individuals

Answer

Primary sanctions are civil in nature; secondary sanctions are criminal

Answer

Primary sanctions are issued by Congress; secondary sanctions are issued by the President

Question 3

The Countering America's Adversaries Through Sanctions Act (CAATSA) primarily targets which three countries?

Accepted Answer

Russia, Iran, and North Korea

Answer

China, Syria, and Libya

Answer

Cuba, Venezuela, and Belarus

Answer

Sudan, Somalia, and Zimbabwe

Question 4

Under CAATSA Section 231, a foreign person may face sanctions if they knowingly engage in a 'significant transaction' with which sector?

Accepted Answer

Russia's defense or intelligence sectors

Answer

Any foreign government ministry

Answer

Any FATF non-compliant jurisdiction

Answer

Foreign state-owned central banks

Question 5

Which of the following would most likely trigger a secondary sanctions designation for a non-U.S. financial institution?

Accepted Answer

Providing significant financial services to an OFAC-designated party

Answer

Holding accounts for U.S. persons operating in a foreign country

Answer

Failing to implement anti-money laundering controls

Answer

Investing in U.S. Treasury securities on behalf of clients

Question 6

What does 'extraterritorial reach' mean in the context of U.S. sanctions?

Accepted Answer

The application of U.S. sanctions laws to conduct occurring outside U.S. territory by non-U.S. persons

Answer

The ability of OFAC to conduct physical audits of foreign banks

Answer

OFAC's authority to seize assets held in foreign financial institutions abroad

Answer

The jurisdiction of U.S. courts over foreign nationals for all financial crimes

Question 7

What is the primary enforcement mechanism OFAC uses to implement secondary sanctions against foreign financial institutions?

Accepted Answer

Prohibiting or restricting the foreign institution's access to U.S. correspondent accounts

Answer

Issuing civil monetary penalties directly to foreign banks

Answer

Filing criminal charges against foreign banks in U.S. federal courts

Answer

Referring matters to the UN Security Council Sanctions Committee