CGSS ACTUAL EXAM PAPER 2026
QUESTIONS WITH ANSWERS GRADED
A+
◍ Which of the following is a way in which a cutomer's delivery channel
might increase an FIs inherent risk?.
Answer: The affiliate providing the due dil on the customer is in a
jurisdiction with low compliance standards.
◍ Which items are primary sources of information that can be used in an
investigation? Corporate registers or key trade activity lists.
Answer: Key trade activity list. These lists are the DPL list, common
military list of the EU, US Nuclear Regulatory Commission Controls
◍ What are Sanctions?.
Answer: Measures or actions taken against a target to influence its behavior,
policy, or actions.CGSS Definition: An economic action taken against a
target to influence the target's actions. (Target could be: a state, class of
persons, an individual person, or even a function).
◍ What is the 5 step decision tree that investigators commonly use in assessing
sanctions alerts?.
Answer: 1) do sanctions restrictions apply 2) What is restriction about
(freezing assets, general prohibition 3) whether there is a violation 4) If so,
how 5) Record and document
◍ Which occurs as part of name screening?.
Answer: The firms entire customer database is screened by ASTs on a
periodic basis.
◍ What is Sanctions Compliance?.
Answer: Sanctions compliance is the act of adhering to the sanctions-related
, legislation, regulations, rules, and norms that make up the sanctions
landscape.
◍ Common sanctions risk for commercial/investment banking.
Answer: Customers tend to use intermediaries
◍ What are Economic Sanctions?.
Answer: Economic sanctions are the withdrawal of customary trade and
financial relations for foreign and security related purposes.
◍ What is an Embargo?.
Answer: A government instituted prevention of exports to a certain country.
◍ What a common error/assumption made about SDD?.
Answer: A customer that has no obvious presence or direct link to a
sanctioned country is low sanctions risk.
◍ Customers whose business involve trade-related activities warrant close
attention in regard to the nature of business and product and services b/c.
Answer: cargo can be transferred from one ship or other form of transport
via another country b4 arriving at its final destination
◍ What constitutes an operational challenge that can be encountered when
attempting to identify beneficial owners?.
Answer: Unreliable information from the the new customer, data silos, high
volume business, calculation of aggregate ownership.
◍ Which item relates to a customers jx/geo as part of the customer's sanctions
risk profile?.
Answer: place of birth, tax residency and travel for work (does customer
travel regularly to a country that is subject to comprehensive sanctions and
if so, how is the travel funded.
◍ How does the scope of KYC info used for sanctions compliance differ from
that used for AML requirements?.
Answer: The scope of KYC information for sanctions compliance can be
more limited than for AML purposes. But it should at least include ( ID of
, customer/counterparties/BO, Nature of and purpose of customer's
account/tx, source of funds and where they intend to send them). AML KYC
need to understand exposure to all high risk countries - sanctions just need
to know exposure to sanctioned countries.
◍ What are the key information to collect for sanctions SDD?.
Answer: The customer, nature of business, geo/jx connections
◍ What is a Boycott?.
Answer: Restriction on or cessation of trading with a nation or bloc of
nations.
◍ What was the significance of the Technopromexport case?.
Answer: The case involved a Russian state-owned company concealing the
final destination of goods (Crimea) in its contract with EU biz Siemens.
◍ U turn payments.
Answer: Bank A (US) send payment to Bank B (France) thru offshore
account (Switzerland). Both A/B use offshore account. Relates to Iran and
Stripping. Intermediate bank - Switzerland - strips. Used to be allow until
2008. By using U-turn can defy the following by removing relevant info: -
Targeted sanctions against certain countries- entities on SDN list-
individuals on SDN list
◍ What are Multi-Lateral Sanctions?.
Answer: When multiple countries work together to impose sanctions on
another country.
◍ What was significant about the 2017 case of Access USA Shipping LLC?.
Answer: Access USA (package forwarding biz) set up an internal straw
buyer to help a client evade sanctions. Access set up US address/warehouse
for foreign customers to buy EAR goods. Shows importance of FIs doing
SDD on Access.
◍ How is the aggregate ownership of corporate structures affected by the
OFAC 50% Rule?.
Answer: If sanctioned biz A owns 70% of Company B and Company B
, owns 70% of Company C - Company A only owns 49% of Company C. b/c
70% of 70 = 49%
◍ Uni-Lateral Sanctions.
Answer: Sanctions imposed on another country by a single country.
◍ What are Sanctions Regimes?.
Answer: Sanctions regimes are a set of sanctions that have a common theme.
◍ How are SWIFT payment messages predefined?.
Answer: By format for type of commercial activity and numbered/set fields
◍ AST can detect many red flags, but which of the following red flags usually
require human assessment to find?.
Answer: There is an abnormal shipping route for the product and
destination.
◍ BNP Parabis case significant b/c.
Answer: It was the first time a US court convicted and sentenced an FI for
violating the country's sanctions
◍ Which SWIFT messages to banks usually send together?.
Answer: MT103 and MT202COV
◍ What do sanctions attempt to do?.
Answer: Sanctions attempt to change behavior through deterrence,
prevention and punishment.
◍ What is a tactic people use to avoid detection during sanctions payment
screening?.
Answer: Using unusual combinations of characters like #!$#!$
◍ In March 2015, Commerzbank agreed to pay $1.45 B in fines. Which of
these would have likely reduced the fine?.
Answer: C US employess having completed the voluntary self-disclosures
◍ What would be considered a red flag in a customer's paperwork?.
Answer: The paperwork states the shipment is of heavy machinery but the
shipment is refrigerated. (find this in handbook)
QUESTIONS WITH ANSWERS GRADED
A+
◍ Which of the following is a way in which a cutomer's delivery channel
might increase an FIs inherent risk?.
Answer: The affiliate providing the due dil on the customer is in a
jurisdiction with low compliance standards.
◍ Which items are primary sources of information that can be used in an
investigation? Corporate registers or key trade activity lists.
Answer: Key trade activity list. These lists are the DPL list, common
military list of the EU, US Nuclear Regulatory Commission Controls
◍ What are Sanctions?.
Answer: Measures or actions taken against a target to influence its behavior,
policy, or actions.CGSS Definition: An economic action taken against a
target to influence the target's actions. (Target could be: a state, class of
persons, an individual person, or even a function).
◍ What is the 5 step decision tree that investigators commonly use in assessing
sanctions alerts?.
Answer: 1) do sanctions restrictions apply 2) What is restriction about
(freezing assets, general prohibition 3) whether there is a violation 4) If so,
how 5) Record and document
◍ Which occurs as part of name screening?.
Answer: The firms entire customer database is screened by ASTs on a
periodic basis.
◍ What is Sanctions Compliance?.
Answer: Sanctions compliance is the act of adhering to the sanctions-related
, legislation, regulations, rules, and norms that make up the sanctions
landscape.
◍ Common sanctions risk for commercial/investment banking.
Answer: Customers tend to use intermediaries
◍ What are Economic Sanctions?.
Answer: Economic sanctions are the withdrawal of customary trade and
financial relations for foreign and security related purposes.
◍ What is an Embargo?.
Answer: A government instituted prevention of exports to a certain country.
◍ What a common error/assumption made about SDD?.
Answer: A customer that has no obvious presence or direct link to a
sanctioned country is low sanctions risk.
◍ Customers whose business involve trade-related activities warrant close
attention in regard to the nature of business and product and services b/c.
Answer: cargo can be transferred from one ship or other form of transport
via another country b4 arriving at its final destination
◍ What constitutes an operational challenge that can be encountered when
attempting to identify beneficial owners?.
Answer: Unreliable information from the the new customer, data silos, high
volume business, calculation of aggregate ownership.
◍ Which item relates to a customers jx/geo as part of the customer's sanctions
risk profile?.
Answer: place of birth, tax residency and travel for work (does customer
travel regularly to a country that is subject to comprehensive sanctions and
if so, how is the travel funded.
◍ How does the scope of KYC info used for sanctions compliance differ from
that used for AML requirements?.
Answer: The scope of KYC information for sanctions compliance can be
more limited than for AML purposes. But it should at least include ( ID of
, customer/counterparties/BO, Nature of and purpose of customer's
account/tx, source of funds and where they intend to send them). AML KYC
need to understand exposure to all high risk countries - sanctions just need
to know exposure to sanctioned countries.
◍ What are the key information to collect for sanctions SDD?.
Answer: The customer, nature of business, geo/jx connections
◍ What is a Boycott?.
Answer: Restriction on or cessation of trading with a nation or bloc of
nations.
◍ What was the significance of the Technopromexport case?.
Answer: The case involved a Russian state-owned company concealing the
final destination of goods (Crimea) in its contract with EU biz Siemens.
◍ U turn payments.
Answer: Bank A (US) send payment to Bank B (France) thru offshore
account (Switzerland). Both A/B use offshore account. Relates to Iran and
Stripping. Intermediate bank - Switzerland - strips. Used to be allow until
2008. By using U-turn can defy the following by removing relevant info: -
Targeted sanctions against certain countries- entities on SDN list-
individuals on SDN list
◍ What are Multi-Lateral Sanctions?.
Answer: When multiple countries work together to impose sanctions on
another country.
◍ What was significant about the 2017 case of Access USA Shipping LLC?.
Answer: Access USA (package forwarding biz) set up an internal straw
buyer to help a client evade sanctions. Access set up US address/warehouse
for foreign customers to buy EAR goods. Shows importance of FIs doing
SDD on Access.
◍ How is the aggregate ownership of corporate structures affected by the
OFAC 50% Rule?.
Answer: If sanctioned biz A owns 70% of Company B and Company B
, owns 70% of Company C - Company A only owns 49% of Company C. b/c
70% of 70 = 49%
◍ Uni-Lateral Sanctions.
Answer: Sanctions imposed on another country by a single country.
◍ What are Sanctions Regimes?.
Answer: Sanctions regimes are a set of sanctions that have a common theme.
◍ How are SWIFT payment messages predefined?.
Answer: By format for type of commercial activity and numbered/set fields
◍ AST can detect many red flags, but which of the following red flags usually
require human assessment to find?.
Answer: There is an abnormal shipping route for the product and
destination.
◍ BNP Parabis case significant b/c.
Answer: It was the first time a US court convicted and sentenced an FI for
violating the country's sanctions
◍ Which SWIFT messages to banks usually send together?.
Answer: MT103 and MT202COV
◍ What do sanctions attempt to do?.
Answer: Sanctions attempt to change behavior through deterrence,
prevention and punishment.
◍ What is a tactic people use to avoid detection during sanctions payment
screening?.
Answer: Using unusual combinations of characters like #!$#!$
◍ In March 2015, Commerzbank agreed to pay $1.45 B in fines. Which of
these would have likely reduced the fine?.
Answer: C US employess having completed the voluntary self-disclosures
◍ What would be considered a red flag in a customer's paperwork?.
Answer: The paperwork states the shipment is of heavy machinery but the
shipment is refrigerated. (find this in handbook)
