CGSS EXAM PREP QUESTIONS AND ANSWERS
2026 STUDY GUIDE
◉ 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 complex sanctions landscape.
◉ Define embargo. Answer: An embargo is an official government
action to ban trade or commercial activity with a specific country,
sometimes involving a specific trade product (e.g., a grain embargo or an
oil embargo).
◉ How do blockades differ from sanctions? Answer: Blockades involve
the deployment of military resources by land, air, or sea, by a country or
coalition to prevent the movement of goods or people into or out of a
targeted country. Sanctions, on the other hand, involve legal actions that
are punitive or restrictive.
◉ What is the intended impact of economic sanctions on targets?
Answer: Economic sanctions, which can include trade sanctions and
financial sanctions, are intended to impact targets by limiting the target
country's exports, restricting its imports, or impeding finance (including
reducing aid). Economic sanctions apply to property, a term that is very
broadly defined to include much more than money and trade goods. In
,the US, the terms "property" and "property interest" include checks,
merchandise, trademarks, annuities, and a broad array of other interests,
as defined in US law. This broad definition includes virtually all
financial or commercial activity. Although there are sanctions, such as
travel bans, that do not involve property, economic sanctions have by far
the most implications for sanctions compliance programs.
◉ How do thematic sanctions differ from economic sanctions? Answer:
Sanctions can target activities or geography. Thematic sanctions focus
on particular issues or concerns that may cut across geographic
boundaries, such as counter-narcotics sanctions. In contrast, geographic
sanctions target specific countries or regions, such as North Korea and
Crimea. Examples of thematic sanctions include the strengthening of
human or labor rights, freeing of captured citizens, and reversal of land
captures. Although the EU has historically imposed geographic
sanctions, in recent years, it has also adopted thematic sanctions,
including those promoting human rights.
◉ What is a sanctions regime? Answer: A sanctions regime is a set of
sanctions that have a common nexus or theme. Sanctions regimes are
either referred to by the issuer of the set of sanctions or by the intended
purpose of the set of sanctions. For example, the "OFAC sanctions
regime" or the "North Korea sanctions regime." Depending on the
context, a sanctions regime may be limited to unilateral sanctions or may
include multilateral sanctions.
◉ What is the role of the International Atomic Energy Agency (IAEA)?
Answer: The UN's Treaty on the Non-Proliferation of Nuclear Weapons
,(NPT) established the International Atomic Energy Agency (IAEA) to
monitor compliance with the terms of the treaty. The IAEA periodically
inspects the facilities and operations of member nations that have
concluded nuclear safeguards agreements with the Agency. It seeks to
build confidence and trust among member nations, which helps to
prevent the development of fissile material for military use.
◉ What is the Non-Proliferation Treaty (NPT)? Answer: The UN's
Treaty on the Non-Proliferation of Nuclear Weapons, commonly known
as the Non-Proliferation Treaty (NPT), was signed in 1968 and went into
effect in March 1970. The NPT solidified the commitment of signing
countries to prevent the spread of nuclear weapons. Its goal was to
minimize the risk of the use of nuclear weapons in conflict, which could
result in significant destruction. Likewise, the NPT sought to keep the
weapons out of the hands of rogue nations and terrorists.
◉ What is the goal of the Kimberley Process Certification Scheme?
Answer: The Kimberley Process Certification Scheme was established
by the UN in 2003 to establish trade controls over conflict diamonds
(i.e., uncut diamonds mined in an area of armed conflict and traded
illicitly to finance the fighting). Within the process, governments are
required to implement controls on the import and export of diamonds to
certify and control the trade, as well as create a documentary trail as to
the extraction and refinement processes.
◉ What precipitated passage of the Magnitsky Act in the US? Answer:
In the US, the Magnitsky Act allows for unilateral, global sanctions to be
imposed on human rights offenders and corrupt actors. Assets can be
, frozen and offenders can be barred from entering the US. The act
originated from the mistreatment of attorney and auditor Sergei
Magnitsky by Russian officials while he was in a Moscow prison for
investigating fraud related to Russian tax officials. The law allows the
US to sanction foreign government officials involved in human rights
abuses anywhere in the world, including those found involved with the
assassination of the Washington Post reporter Jamal Khashoggi in 2018.
◉ Define the concept of money laundering. Answer: Money laundering
is the process of concealing or disguising the existence, source,
movement, destination, or illegal application of illicitly derived property
or funds to make them appear legitimate. Money laundering typically
involves a three-part system: placement of funds into a financial system;
layering of transactions to disguise the source, ownership, and location
of the funds; and integration of the funds into society in the form of
holdings that appear legitimate. The definition of money laundering
varies in each country where it is recognized as a crime.
◉ What is the significance of the USA PATRIOT Act to the field of anti-
money laundering? Answer: The Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 (USA PATRIOT Act) was enacted on October 26,
2001. This historic US law brought about momentous changes in the
anti-money laundering field, including more than 50 amendments to the
Bank Secrecy Act. Title III of the act, the International Money
Laundering Abatement and Anti-Terrorist Financing Act of 2001,
contains most, but not all, of its anti-money laundering-related
provisions.
2026 STUDY GUIDE
◉ 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 complex sanctions landscape.
◉ Define embargo. Answer: An embargo is an official government
action to ban trade or commercial activity with a specific country,
sometimes involving a specific trade product (e.g., a grain embargo or an
oil embargo).
◉ How do blockades differ from sanctions? Answer: Blockades involve
the deployment of military resources by land, air, or sea, by a country or
coalition to prevent the movement of goods or people into or out of a
targeted country. Sanctions, on the other hand, involve legal actions that
are punitive or restrictive.
◉ What is the intended impact of economic sanctions on targets?
Answer: Economic sanctions, which can include trade sanctions and
financial sanctions, are intended to impact targets by limiting the target
country's exports, restricting its imports, or impeding finance (including
reducing aid). Economic sanctions apply to property, a term that is very
broadly defined to include much more than money and trade goods. In
,the US, the terms "property" and "property interest" include checks,
merchandise, trademarks, annuities, and a broad array of other interests,
as defined in US law. This broad definition includes virtually all
financial or commercial activity. Although there are sanctions, such as
travel bans, that do not involve property, economic sanctions have by far
the most implications for sanctions compliance programs.
◉ How do thematic sanctions differ from economic sanctions? Answer:
Sanctions can target activities or geography. Thematic sanctions focus
on particular issues or concerns that may cut across geographic
boundaries, such as counter-narcotics sanctions. In contrast, geographic
sanctions target specific countries or regions, such as North Korea and
Crimea. Examples of thematic sanctions include the strengthening of
human or labor rights, freeing of captured citizens, and reversal of land
captures. Although the EU has historically imposed geographic
sanctions, in recent years, it has also adopted thematic sanctions,
including those promoting human rights.
◉ What is a sanctions regime? Answer: A sanctions regime is a set of
sanctions that have a common nexus or theme. Sanctions regimes are
either referred to by the issuer of the set of sanctions or by the intended
purpose of the set of sanctions. For example, the "OFAC sanctions
regime" or the "North Korea sanctions regime." Depending on the
context, a sanctions regime may be limited to unilateral sanctions or may
include multilateral sanctions.
◉ What is the role of the International Atomic Energy Agency (IAEA)?
Answer: The UN's Treaty on the Non-Proliferation of Nuclear Weapons
,(NPT) established the International Atomic Energy Agency (IAEA) to
monitor compliance with the terms of the treaty. The IAEA periodically
inspects the facilities and operations of member nations that have
concluded nuclear safeguards agreements with the Agency. It seeks to
build confidence and trust among member nations, which helps to
prevent the development of fissile material for military use.
◉ What is the Non-Proliferation Treaty (NPT)? Answer: The UN's
Treaty on the Non-Proliferation of Nuclear Weapons, commonly known
as the Non-Proliferation Treaty (NPT), was signed in 1968 and went into
effect in March 1970. The NPT solidified the commitment of signing
countries to prevent the spread of nuclear weapons. Its goal was to
minimize the risk of the use of nuclear weapons in conflict, which could
result in significant destruction. Likewise, the NPT sought to keep the
weapons out of the hands of rogue nations and terrorists.
◉ What is the goal of the Kimberley Process Certification Scheme?
Answer: The Kimberley Process Certification Scheme was established
by the UN in 2003 to establish trade controls over conflict diamonds
(i.e., uncut diamonds mined in an area of armed conflict and traded
illicitly to finance the fighting). Within the process, governments are
required to implement controls on the import and export of diamonds to
certify and control the trade, as well as create a documentary trail as to
the extraction and refinement processes.
◉ What precipitated passage of the Magnitsky Act in the US? Answer:
In the US, the Magnitsky Act allows for unilateral, global sanctions to be
imposed on human rights offenders and corrupt actors. Assets can be
, frozen and offenders can be barred from entering the US. The act
originated from the mistreatment of attorney and auditor Sergei
Magnitsky by Russian officials while he was in a Moscow prison for
investigating fraud related to Russian tax officials. The law allows the
US to sanction foreign government officials involved in human rights
abuses anywhere in the world, including those found involved with the
assassination of the Washington Post reporter Jamal Khashoggi in 2018.
◉ Define the concept of money laundering. Answer: Money laundering
is the process of concealing or disguising the existence, source,
movement, destination, or illegal application of illicitly derived property
or funds to make them appear legitimate. Money laundering typically
involves a three-part system: placement of funds into a financial system;
layering of transactions to disguise the source, ownership, and location
of the funds; and integration of the funds into society in the form of
holdings that appear legitimate. The definition of money laundering
varies in each country where it is recognized as a crime.
◉ What is the significance of the USA PATRIOT Act to the field of anti-
money laundering? Answer: The Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 (USA PATRIOT Act) was enacted on October 26,
2001. This historic US law brought about momentous changes in the
anti-money laundering field, including more than 50 amendments to the
Bank Secrecy Act. Title III of the act, the International Money
Laundering Abatement and Anti-Terrorist Financing Act of 2001,
contains most, but not all, of its anti-money laundering-related
provisions.
