CAMS Sanctions and OFAC Compliance 3

Question 1

What is a 'Consolidated Sanctions List' and where should compliance officers look to screen customers?

Accepted Answer

A compilation of multiple OFAC sanctions lists (SDN, SSI, FSE, etc.) plus other relevant lists like EU, UN, and UK sanctions, used for comprehensive screening

Answer

A combined list maintained jointly by FinCEN and OFAC of all financial criminals in the U.S.

Answer

A list maintained by individual banks of their own prohibited customers

Answer

A combined list of all SAR subjects reported to FinCEN

Question 2

What is 'correspondent banking' sanctions risk and how should banks manage it?

Accepted Answer

The risk that correspondent relationships will be used to process transactions on behalf of sanctioned parties who are customers of the respondent bank, managed through due diligence on the respondent bank's compliance program

Answer

The risk that correspondent banks will charge excessive fees for international transfers

Answer

The risk that correspondent banks will share confidential SAR data inappropriately

Answer

The risk that correspondent banks in high-risk countries will be de-risked by U.S. institutions

Question 3

What must a financial institution do within 10 business days of identifying blocked property under OFAC regulations?

Accepted Answer

File a Blocked Property Report with OFAC

Answer

Release the funds to law enforcement

Answer

File a SAR with FinCEN

Answer

Return the funds to the originating institution

Question 4

What is a 'general license' under OFAC sanctions programs?

Accepted Answer

A pre-authorized permission for broad categories of transactions that would otherwise be prohibited, applicable to all eligible parties without individual application

Answer

A license that all financial institutions must obtain to conduct international transactions

Answer

A license issued to specific companies to trade with sanctioned countries

Answer

A license for AML officers to access OFAC enforcement databases

Question 5

How do 'secondary sanctions' on Iran affect non-U.S. financial institutions?

Accepted Answer

Non-U.S. institutions that engage in significant transactions with Iran may be denied access to the U.S. financial system and face other U.S. penalties

Answer

They have no effect on non-U.S. institutions operating entirely outside the United States

Answer

They require non-U.S. institutions to file reports directly with OFAC

Answer

They apply only to institutions that have a U.S. correspondent banking relationship

Question 6

What is a 'specific license' from OFAC and when would an institution seek one?

Accepted Answer

An individual authorization granted by OFAC to a specific applicant to engage in a transaction that would otherwise be prohibited, typically for humanitarian, legal, or diplomatic purposes

Answer

A license for operating a specific type of financial institution under U.S. law

Answer

A certification that a specific transaction has been cleared of sanctions concerns

Answer

A license required for each wire transfer to a high-risk country