CFCS Terrorist Financing & Sanctions Compliance Flashcards
6 cards from real CFCS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CFCS Terrorist Financing & Sanctions Compliance flashcards as text
Which OFAC program specifically targets organizations and individuals linked to designated foreign terrorist organizations operating in the US context?
Answer: Specially Designated Nationals (SDN) List
OFAC's SDN List consolidates all sanctioned individuals and entities across programs, including terrorist organizations, and prohibits US persons from transacting with any listed party.
What is a 'false positive' in the context of sanctions screening and why does it matter?
Answer: A legitimate transaction incorrectly flagged as a match to a sanctions list
False positives occur when screening systems flag legitimate customers or transactions as potential sanctions matches, requiring manual review and potentially delaying legitimate business.
Under OFAC regulations, what is the standard for liability when a US financial institution processes a transaction involving a sanctioned party?
Answer: Strict liability — violations can occur even without knowledge or intent
OFAC sanctions violations are subject to strict liability, meaning civil penalties can be imposed regardless of whether the institution knew or intended to violate sanctions.
What is 'correspondent banking' and why is it a particular terrorist financing risk?
Answer: Arrangements where one bank holds accounts for another bank to process transactions, potentially obscuring the ultimate originator of funds
Correspondent banking relationships allow banks to process transactions on behalf of other institutions, creating layering opportunities where the ultimate beneficial owner of funds can be obscured.
What is the primary purpose of the Egmont Group in the context of terrorist financing?
Answer: Facilitating information sharing and cooperation among Financial Intelligence Units (FIUs) globally
The Egmont Group is an international network of Financial Intelligence Units that facilitates the secure exchange of financial intelligence to combat money laundering and terrorist financing.
Which US statute specifically criminalizes providing 'material support' to designated foreign terrorist organizations?
Answer: 18 U.S.C. § 2339B (Material Support to Terrorist Organizations)
18 U.S.C. § 2339B prohibits knowingly providing material support or resources to a designated foreign terrorist organization, including financial services.