CGSS Final Exam Complete questions and
correct verified answers (detailed answers)
already graded A+
Which of the following is a common error/assumption made about sanctions due
diligence? - {✔✔ RESOLUTION RESULT VERIFIED ✔✔}-A customer that has
no obvious presence in or direct link to a sanctioned country is a low sanctions
risk.
Within this risk area, there are some common errors and assumptions about SDD.
One concerns pass-through sanctions risk—the incorrect assumption that
sanctions risks associated with a customer's affiliates or subsidiaries are simply a
problem for the customer to assess and manage
The four steps for gathering KYC information in the sanctions due diligence
research model include: - {✔✔ RESOLUTION RESULT VERIFIED ✔✔}-assess,
explore, organize, and present.
Which of the following constitutes a known sanctions risk that is common in
wealth management and private banking? - {✔✔ RESOLUTION RESULT
VERIFIED ✔✔}-Customers tend to be powerful clients or involved with
powerful clients.
,Which of the following constitutes a known sanctions risk that is common in
commercial and investment banking? - {✔✔ RESOLUTION RESULT VERIFIED
✔✔}-Customers tend to use intermediaries.
• The involvement of intermediaries or advisors who might act on behalf of and
on the instructions of the customer
WEALTH MANAGEMENT AND PRIVATE BANKING Wealth management and private
banking can present different sanctions due diligence challenges from retail
banking. As shown in Figure 19, known sanctions risks in these lines of business
include: • Use of legal entities and complex structures; for example, for estate
planning • Maintenance of wealth and assets in numerous jurisdictions • The
involvement of intermediaries or advisors who might act on behalf of and on the
instructions of the customer • Investments or assets potentially connected to
sanctioned targets • Culture of secrecy and anonymity • Wealth derived from
complex business activities and ventures that may be difficult to verify as "clean,"
including from government contracts and foreign investments
Free trade zones are a key risk area in trade-related activities because: - {✔✔
RESOLUTION RESULT VERIFIED ✔✔}-they commonly have inadequate
sanctions safeguards and weak procedures to inspect goods and legal entities.
Why are sanctions risks potentially higher and more difficult to identify when
financial institutions offer correspondent banking to other firms? - {✔✔
RESOLUTION RESULT VERIFIED ✔✔}-The correspondent bank may provide
services for
individuals or entities for which it has neither verified the identities nor obtained
any firsthand knowledge.
, Which occurs as a part of name screening? - {✔✔ RESOLUTION RESULT
VERIFIED ✔✔}-A firm's entire customer database is screened by automatic
screening tools on a periodic basis.
Automated screening tools need to be configured correctly and then updated
regularly to reflect: - {✔✔ RESOLUTION RESULT VERIFIED ✔✔}-
Which of the following best describes the Financial Action Task Force's Mutual
Evaluation Reports? - {✔✔ RESOLUTION RESULT VERIFIED ✔✔}-Reports
that evaluate a country's compliance with FATF's recommendations
A US consultant is in Beijing, China working on a project for a major Chinese
financial institution, and is asked how to set up a sanctions compliance program
to engage in trade-related transactions with the country of Iran. The US
consultant drafts a sanctions compliance framework and delivers it to the client.
The consultant is most likely engaged in: - {✔✔ RESOLUTION RESULT VERIFIED
✔✔}-Facilitation.
KEY TAKEAWAYS • Facilitation is a concept that applies to US persons not directly
engaged in sanctioned activity. • Facilitation is a broad concept that may
encompass a variety of activities, such as overseeing the transfer of equipment
for a non-US person to sanctioned locations. • US persons are prohibited from
making business decisions on behalf of non-US persons for projects in sanctioned
countries. • Providing technical or advisory expertise for operations in sanctioned
countries may be prohibited as facilitation.
correct verified answers (detailed answers)
already graded A+
Which of the following is a common error/assumption made about sanctions due
diligence? - {✔✔ RESOLUTION RESULT VERIFIED ✔✔}-A customer that has
no obvious presence in or direct link to a sanctioned country is a low sanctions
risk.
Within this risk area, there are some common errors and assumptions about SDD.
One concerns pass-through sanctions risk—the incorrect assumption that
sanctions risks associated with a customer's affiliates or subsidiaries are simply a
problem for the customer to assess and manage
The four steps for gathering KYC information in the sanctions due diligence
research model include: - {✔✔ RESOLUTION RESULT VERIFIED ✔✔}-assess,
explore, organize, and present.
Which of the following constitutes a known sanctions risk that is common in
wealth management and private banking? - {✔✔ RESOLUTION RESULT
VERIFIED ✔✔}-Customers tend to be powerful clients or involved with
powerful clients.
,Which of the following constitutes a known sanctions risk that is common in
commercial and investment banking? - {✔✔ RESOLUTION RESULT VERIFIED
✔✔}-Customers tend to use intermediaries.
• The involvement of intermediaries or advisors who might act on behalf of and
on the instructions of the customer
WEALTH MANAGEMENT AND PRIVATE BANKING Wealth management and private
banking can present different sanctions due diligence challenges from retail
banking. As shown in Figure 19, known sanctions risks in these lines of business
include: • Use of legal entities and complex structures; for example, for estate
planning • Maintenance of wealth and assets in numerous jurisdictions • The
involvement of intermediaries or advisors who might act on behalf of and on the
instructions of the customer • Investments or assets potentially connected to
sanctioned targets • Culture of secrecy and anonymity • Wealth derived from
complex business activities and ventures that may be difficult to verify as "clean,"
including from government contracts and foreign investments
Free trade zones are a key risk area in trade-related activities because: - {✔✔
RESOLUTION RESULT VERIFIED ✔✔}-they commonly have inadequate
sanctions safeguards and weak procedures to inspect goods and legal entities.
Why are sanctions risks potentially higher and more difficult to identify when
financial institutions offer correspondent banking to other firms? - {✔✔
RESOLUTION RESULT VERIFIED ✔✔}-The correspondent bank may provide
services for
individuals or entities for which it has neither verified the identities nor obtained
any firsthand knowledge.
, Which occurs as a part of name screening? - {✔✔ RESOLUTION RESULT
VERIFIED ✔✔}-A firm's entire customer database is screened by automatic
screening tools on a periodic basis.
Automated screening tools need to be configured correctly and then updated
regularly to reflect: - {✔✔ RESOLUTION RESULT VERIFIED ✔✔}-
Which of the following best describes the Financial Action Task Force's Mutual
Evaluation Reports? - {✔✔ RESOLUTION RESULT VERIFIED ✔✔}-Reports
that evaluate a country's compliance with FATF's recommendations
A US consultant is in Beijing, China working on a project for a major Chinese
financial institution, and is asked how to set up a sanctions compliance program
to engage in trade-related transactions with the country of Iran. The US
consultant drafts a sanctions compliance framework and delivers it to the client.
The consultant is most likely engaged in: - {✔✔ RESOLUTION RESULT VERIFIED
✔✔}-Facilitation.
KEY TAKEAWAYS • Facilitation is a concept that applies to US persons not directly
engaged in sanctioned activity. • Facilitation is a broad concept that may
encompass a variety of activities, such as overseeing the transfer of equipment
for a non-US person to sanctioned locations. • US persons are prohibited from
making business decisions on behalf of non-US persons for projects in sanctioned
countries. • Providing technical or advisory expertise for operations in sanctioned
countries may be prohibited as facilitation.
