CGSS UPDATED QUESTIONS AND ANSWERS GRADED A+
✔✔In March 2015, Commerzbank agreed to pay $1.45 billion in fines for violation of US
laws and New York state law. Which of these actions would likely have resulted in a
lower fine? - ✔✔Commerzbank's US employees having completed the voluntary self-
disclosures
✔✔What lesson can financial professionals learn from the 2014 case of Alex and Gary
Tsai - ✔✔It is essential to have a thorough knowledge of a customer's identity and his or
her connection to other entities.
✔✔Why was the BNP Paribas case of May 2015 especially significant? - ✔✔It was the
first time a US court convicted and sentenced a financial institution for violating the
country's sanctions.
✔✔Which of the following is an important difference between AML regulations and
sanctions? - ✔✔In most cases, sanctions have an immediate legal effect, and AML
regulations do not.
✔✔Which of the following is an example of dual-use goods? - ✔✔Lasers that have uses
in medical technology and in the construction industry
✔✔Which of the following would be considered a red flag in a customer's paperwork? -
✔✔The paperwork states the shipment is of heavy machinery, but the shipment is
refrigerated.
✔✔Automated screening tools can detect many red flags, but which of the following red
flags usually requires human assessment to find? - ✔✔There is an abnormal shipping
route for the product and destination.
Concealing the final destination or transshipment: The shipping route is abnormal for
the product or the destination.
✔✔What was significant about the 2017 case of Access USA Shipping LLC? -
✔✔Access USA set up an internal straw buyer to help a client evade sanctions.
Access also offered a "personal shopper" program. In this scheme, the company
presented an Access employee to the US companies from which goods were
purchased. Access falsely claimed that the employee was actually the buyer. When
sellers expressed concerns or reluctance to sell to foreign buyers, Access falsely
presented an employee as the end user. In effect, Access set up a straw buyer for a
fee. The company made these purchases in the name of Eric Baird, who was then CEO
of Access
, Another way of concealing the final destination of goods happens when sanctions
evaders use an agent or straw buyer in an unsanctioned jurisdiction.
Concealing an End User's Identity
The sanctions evader may use a straw buyer in another jurisdiction to buy the
merchandise and then complete a separate shipment or purchase after the export has
occurred. • The evader may falsify the name of the purchaser or end user to avoid
detection. • The evader may falsely state the purpose or intended use of the item in
purchase orders, transport documentation, and other documents related to the
transaction
KEY TAKEAWAYS • This case illustrates the importance of truly knowing a customer.
Had the US companies done thorough due diligence when selling to Access or any of
their foreign customers, they would have discovered the nature of the warehouse and
likely uncovered the third-party nature of the shipping arrangement. • In spite of detailed
export regulations, documentation requirements, licensing, and so on, those determined
to flout the regulations will find a structure that allows them to do so, even if only for a
limited time. • Any business engaged in trade must conduct thorough due diligence,
particularly if the business trades in any controlled merchandise
✔✔What was significant about the Technopromexport case? - ✔✔The case involved a
state-owned company concealing the final destination of goods.
known the violation of contract terms was possible—unless Siemens did not perform
sufficient due diligence on its buyer. • Siemens had no ability to force compliance with
the contract once the goods had been delivered
Since Technopromexport is state-owned, its actions are likely to fall in line with those of
the Russian government. Therefore, Siemens should have
✔✔n which of these situations would transshipment most likely be legal? - ✔✔When a
large ship cannot navigate a small river and goods must be moved from the ship to a
fleet of truck
✔✔A shipper conceals sanctioned goods by placing them underneath crates of
vegetables that will be unsellable if held at port for too long or inspected too roughly.
What is the name of this type of sanctions evasion? - ✔✔Consolidation of goods
A method of sanctions evasion in which a person or organization either groups small
shipments into one larger shipment or mixes restricted items in with other goods and
does not declare those restricted items in shipping documentatio
✔✔In March 2015, Commerzbank agreed to pay $1.45 billion in fines for violation of US
laws and New York state law. Which of these actions would likely have resulted in a
lower fine? - ✔✔Commerzbank's US employees having completed the voluntary self-
disclosures
✔✔What lesson can financial professionals learn from the 2014 case of Alex and Gary
Tsai - ✔✔It is essential to have a thorough knowledge of a customer's identity and his or
her connection to other entities.
✔✔Why was the BNP Paribas case of May 2015 especially significant? - ✔✔It was the
first time a US court convicted and sentenced a financial institution for violating the
country's sanctions.
✔✔Which of the following is an important difference between AML regulations and
sanctions? - ✔✔In most cases, sanctions have an immediate legal effect, and AML
regulations do not.
✔✔Which of the following is an example of dual-use goods? - ✔✔Lasers that have uses
in medical technology and in the construction industry
✔✔Which of the following would be considered a red flag in a customer's paperwork? -
✔✔The paperwork states the shipment is of heavy machinery, but the shipment is
refrigerated.
✔✔Automated screening tools can detect many red flags, but which of the following red
flags usually requires human assessment to find? - ✔✔There is an abnormal shipping
route for the product and destination.
Concealing the final destination or transshipment: The shipping route is abnormal for
the product or the destination.
✔✔What was significant about the 2017 case of Access USA Shipping LLC? -
✔✔Access USA set up an internal straw buyer to help a client evade sanctions.
Access also offered a "personal shopper" program. In this scheme, the company
presented an Access employee to the US companies from which goods were
purchased. Access falsely claimed that the employee was actually the buyer. When
sellers expressed concerns or reluctance to sell to foreign buyers, Access falsely
presented an employee as the end user. In effect, Access set up a straw buyer for a
fee. The company made these purchases in the name of Eric Baird, who was then CEO
of Access
, Another way of concealing the final destination of goods happens when sanctions
evaders use an agent or straw buyer in an unsanctioned jurisdiction.
Concealing an End User's Identity
The sanctions evader may use a straw buyer in another jurisdiction to buy the
merchandise and then complete a separate shipment or purchase after the export has
occurred. • The evader may falsify the name of the purchaser or end user to avoid
detection. • The evader may falsely state the purpose or intended use of the item in
purchase orders, transport documentation, and other documents related to the
transaction
KEY TAKEAWAYS • This case illustrates the importance of truly knowing a customer.
Had the US companies done thorough due diligence when selling to Access or any of
their foreign customers, they would have discovered the nature of the warehouse and
likely uncovered the third-party nature of the shipping arrangement. • In spite of detailed
export regulations, documentation requirements, licensing, and so on, those determined
to flout the regulations will find a structure that allows them to do so, even if only for a
limited time. • Any business engaged in trade must conduct thorough due diligence,
particularly if the business trades in any controlled merchandise
✔✔What was significant about the Technopromexport case? - ✔✔The case involved a
state-owned company concealing the final destination of goods.
known the violation of contract terms was possible—unless Siemens did not perform
sufficient due diligence on its buyer. • Siemens had no ability to force compliance with
the contract once the goods had been delivered
Since Technopromexport is state-owned, its actions are likely to fall in line with those of
the Russian government. Therefore, Siemens should have
✔✔n which of these situations would transshipment most likely be legal? - ✔✔When a
large ship cannot navigate a small river and goods must be moved from the ship to a
fleet of truck
✔✔A shipper conceals sanctioned goods by placing them underneath crates of
vegetables that will be unsellable if held at port for too long or inspected too roughly.
What is the name of this type of sanctions evasion? - ✔✔Consolidation of goods
A method of sanctions evasion in which a person or organization either groups small
shipments into one larger shipment or mixes restricted items in with other goods and
does not declare those restricted items in shipping documentatio
