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Certified Global Sanctions Specialist Free Sample Questions

Description

Covers sanctions governance and enforcement, evasion techniques such as trade-based and identity concealment methods, due diligence, screening technology, and investigations and asset freezing.

12 free sample questions159 in the full practice test

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CGSS Sample Questions

  1. Question 1

    Advanced

    Governance and Enforcement · Active Sanctions Regimes and Jurisdictional Reach

    A global bank headquartered in London is reviewing a transaction involving a French manufacturing client. The client is exporting mining equipment to a company in a country subject to US comprehensive sanctions. The transaction is denominated in Euros and does not involve any US persons or the US financial system. However, the French client is 45% owned by a US private equity firm. Based on OFAC regulations and the concept of 'facilitation,' which statement accurately reflects the compliance risk?

    Answer and explanation

    Correct answer: D

    Under OFAC regulations, 'facilitation' prohibits US persons from approving, financing, facilitating, or guaranteeing a transaction by a foreign person where the transaction would be prohibited if performed by a US person. If US board members participate in the approval, they violate the facilitation clause, even if the entity itself is not a US person (owning less than 50%).

  2. Question 2

    Advanced

    Governance and Enforcement · Types of Sanctions and Key Concepts

    A compliance officer is calculating the beneficial ownership of 'Company X' to determine if it is blocked under the OFAC 50% Rule.

    Ownership Structure:

    • Sanctioned Individual A owns 20% of Company X.
    • Sanctioned Entity B owns 20% of Company X.
    • Non-Sanctioned Individual C owns 15% of Company X.
    • Company Y (which is 60% owned by Sanctioned Individual A) owns 15% of Company X.

    Calculate the total sanctioned ownership interest in Company X.

    Answer and explanation

    Correct answer: C

    Total sanctioned interest = Direct ownership + Indirect ownership via blocked entities.

    1. Individual A (Sanctioned) = 20%
    2. Entity B (Sanctioned) = 20%
    3. Company Y is blocked because Individual A owns 60% (>50%). Therefore, Company Y's 15% stake in Company X counts as sanctioned interest.
      Total = 20% + 20% + 15% = 55%. Since 55% ≥ 50%, Company X is blocked.
      graph TD A[Sanctioned Ind A] -->|20%| X[Company X] B[Sanctioned Ent B] -->|20%| X A -->|60%| Y[Company Y] Y -->|15%| X style X fill:#f9f,stroke:#333,stroke-width:4px style Y fill:#f9f,stroke:#333,stroke-width:4px

  3. Question 3

    Intermediate

    Sanctions Evasion Techniques · Payment-Based Evasion

    Which of the following scenarios best describes a 'U-Turn' transaction that was historically permitted for Iran but is now generally prohibited for most US sanctions programs?

    Answer and explanation

    Correct answer: D

    A U-Turn transaction involves funds moving from a foreign bank, through a US bank (for clearing), to another foreign bank, for the benefit of a sanctioned party. While historically allowed for Iran under specific conditions (revoked in 2008), this mechanism allows USD clearing without a direct US originator or beneficiary. Understanding this concept is critical for identifying evasion attempts.

  4. Question 4

    Intermediate

    Sanctions Screening · Screening Concepts and Technology

    During a sanctions screening system validation, an auditor notes that the system is configured to generate alerts only on 'Exact Matches'. This configuration is most likely to result in which type of risk?

    Answer and explanation

    Correct answer: A

    Exact match configuration requires the name to be identical character-for-character. It fails to catch variations, misspellings, or transliteration differences (e.g., 'Mohammad' vs 'Mohammed'), leading to False Negatives where sanctioned entities slip through undetected. Best practice requires 'Fuzzy Matching'.

  5. Question 5

    Intermediate

    Sanctions Investigations and Asset Freezing · Asset Freezing and Reporting

    A compliance officer at a European bank identifies a transaction involving a company listed on the US Sectoral Sanctions Identifications (SSI) List. The transaction involves providing 90-day financing for energy equipment. Under Directive 2 (Energy Sector), new debt with a maturity of greater than 60 days is prohibited.

    What is the appropriate immediate action for the bank?

    Answer and explanation

    Correct answer: B

    Sectoral Sanctions (SSI List) typically prohibit specific types of transactions (like dealing in new debt > X days) but do NOT block the entity's assets entirely. Unlike SDN list matches which require blocking (freezing), transactions violating sectoral constraints are generally 'Rejected' (returned), provided the entity is not also on the SDN list.

  6. Question 6

    Advanced

    Governance and Enforcement · Key Concepts of Sanctions

    Which of the following describes the key difference between the EU and US approaches to sanctions ownership and control?

    Answer and explanation

    Correct answer: C

    While the US (OFAC) uses the 50% Rule (aggregating ownership), it generally does not treat entities controlled (but not owned 50%+) by SDNs as automatically blocked by operation of law (though they advise caution). The EU explicitly considers entities 'controlled' by a sanctioned person as subject to asset freezes, regardless of the specific ownership percentage.

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