1-1 What is the purpose of sanctions? 1-1 Sanctions are measures or actions taken against a target to influence its behavior, policies, and/or actions. Sanctions can restrict trade, financial transactions, diplomatic relations, and movement. Also referred to as restrictive measures, sanctions can be specific or general in their implementation and enforcement. 1-2 What is sanctions compliance? 1-2 Sanctions compliance is the act of adhering to the sanctions-related legislation, regulations,...

3-1 Describe customer due diligence (CDD) as part of risk management. 3-1 Customer due diligence (CDD) is a set of internal controls that enable a financial institution to establish a customer's identity, predict with relative certainty the types of transactions in which the customer is likely to engage, and assess the extent to which the customer exposes the institution to a range of risks (i.e., money laundering and sanctions). Organizations need to know their customers through CDD to gu...

5-1 Generally, what is involved in a sanction’s investigation? 5-1 A sanctions investigation is the process of obtaining, evaluating, recording, and storing information about an individual or legal entity with whom one is conducting business, in response to an alert indicating a possible sanctions violation. Investigations often begin with simple checks before progressing to further investigation such as account review, customer outreach, and possible escalation to the compliance function...

2-1 What is sanctions evasion? 2-1 Sanctions evasion is the deliberate attempt to remove or conceal the involvement of sanctioned places, entities, or individuals in a transaction or series of transactions. When sanctions evasion is successful, a business that would have been flagged, taxed, restricted, or prohibited is allowed to proceed unhindered. 2-2 Define counterparty and explain how an institution establishes a counterparty relationship. 2-2 A counterparty is the other side of a tra...

4-1 In general, what is the role of screening in an effective sanction’s compliance program? 4-1 Sanctions screening is one of the key controls of an effective sanction’s compliance program. In simple terms, screening involves checking information obtained about a person, entity, goods, or services against sanctions lists that prohibit making funds or financial services available and/ or restrict or prohibit trade in certain goods or services. When screening generates an alert, the data ...