Acams CGSS Exam Practice Test Instant Access

Question 1

A compliance officer at a US company discovers one of its European subsidiaries was altering the end-user's location information for certain dual-use goods ultimately being sent to Iran. Which should be the next step?

AInform management that there would be no issue since the foreign affiliated subsidiary attested that sanctions due diligence was performed.

BAdvise the subsidiary to conduct this activity through another non-US financial institution to avoid sanctions violations in the future.

CCease shipments of goods from the US to sanctioned jurisdiction and implement a more robust sanctions compliance program.

DIdentify the purchase of dual-use goods as permissible since it involved a non-US subsidiary and shipped to non-US person.

Answer : C

US sanctions and export-control laws apply to US companies and their owned or controlled foreign subsidiaries. Shipping dual-use items to Iran and falsifying end-user location information constitutes a serious sanctions violation and potential export-control breach.

Sanctions and Compliance Domains emphasize that upon discovery of such activity, the company must immediately cease the shipment of goods to sanctioned destinations and strengthen its sanctions compliance program. This must include enhanced oversight, stricter internal controls, and remediation of misconduct.

Reliance on subsidiary attestations or attempts to route transactions through non-US institutions does not eliminate US sanctions liability.

US sanctions applicability to foreign subsidiaries of US companies.

Requirements for ceasing prohibited exports and implementing remediation.

Export-control restrictions on dual-use goods and falsification of end-use information.

Question 2

According to the 2019 Wolfsberg Guidance on Sanctions Screening, which is related to the fundamental pillars of sanctions screening programs?

AExternal audit

BRisk assessment

CRisk management

DExternal reporting

Answer : B

The Wolfsberg 2019 Guidance identifies risk assessment as a foundational component of sanctions screening programs. Screening systems, list management, and alert handling must reflect the institution's assessed sanctions risk exposure.

External audit and reporting are relevant compliance functions but are not listed as fundamental pillars of screening programs in the Wolfsberg framework. Risk management is a broader corporate discipline, while screening specifically starts with a clear sanctions risk assessment.

Wolfsberg 2019 Guidance on Sanctions Screening fundamentals.

Requirement that screening be risk-based and aligned with sanctions risk assessment outcomes.

Question 3

Which are true regarding compliance with EU sanctions? (Select Two.)

AEU sanctions have extraterritorial implications; thus, all countries are required to comply with EU sanctions.

BEU sanctions compliance has a broader scope than US sanctions compliance.

CAll EU nationals, persons residing in the EU, or persons conducting business in the EU are required to comply with EU sanctions.

DForeign nationals who are residing in the EU are not required to follow EU sanctions.

EEU sanctions are applicable within the territory of the EU, including its airspace.

Answer : C, E

EU sanctions apply to:

* All EU nationals,

* All persons within the territory of the EU, including foreign nationals residing or operating within the EU,

* All EU legal entities, regardless of where they operate, and

* Any business conducted within the EU or using EU jurisdictional touchpoints.

EU sanctions do not have general extraterritorial effect. Unlike US sanctions (which can apply based on currency, goods origin, or facilitation), EU sanctions apply within EU territory, including airspace, and to EU persons globally.

EU sanctions do not automatically have a broader scope than US sanctions; in many cases, US sanctions have the broader reach.

EU sanctions territorial and personal scope definitions.

Applicability to EU territory, nationals, and persons operating in the EU.

Question 4

A wire transfer alerts for a potential match in a region known for transshipment bordering a sanctioned jurisdiction. The payment field information does not match the transport document or invoice list. The customer refuses to provide any explanatory information. Which is the most appropriate next step?

AConvene a compliance committee to formally reprimand the customer for refusing to cooperate with an ongoing investigation in an effort to obtain the explanatory information.

BReject the transaction, noting the discrepancies contained in the description of goods on the transport document, the invoice, and the payment order.

CRequest that law enforcement serve a subpoena to the customer requiring the production of the requested explanatory information.

DProvide the counterparty bank with an executed mutual legal assistance treaty to gather the requested explanatory information.

Answer : B

Sanctions and Compliance Domains provide that a financial institution must not execute a transaction when significant unresolved discrepancies exist, especially in high-risk transshipment regions. When:

* documentation does not match payment details, and

* the customer refuses to provide required information,

the institution cannot proceed. Without clarity, the transaction may involve diversion, routed shipments, or indirect dealings with sanctioned entities.

Rejection is appropriate because blocking only applies when a confirmed sanctions match exists. Reprimanding customers, forcing subpoenas, or engaging mutual legal assistance procedures are not required or appropriate steps in sanctions transaction handling.

Reference from Sanctions and Compliance Domains:

Requirements to reject a transaction when discrepancies cannot be resolved.

Need for customer cooperation in sanctions investigations.

Standards for handling high-risk transshipment-related alerts.

Question 5

A compliance analyst at a UK-based company is reviewing a transaction alert for Entity A. A representative provided documentation that a UK Asset Freeze individual reduced their stake in Entity A from 70% to 30% shortly after they became subject to sanctions. Which steps should the analyst recommend first?

AAllow the transaction to proceed and thoroughly document the provided information verifying the reduction in ownership by a sanctioned individual.

BConduct enhanced due diligence on Entity A to verify the provided documentation regarding the reduction of ownership by a sanctioned individual.

CReject the transaction and report it to the competent authority.

DAllow the transaction to proceed and remove Entity A from the screening filters.

Answer : B

Under UK OFSI rules, entities owned or controlled by a designated person remain subject to asset freeze restrictions. A reduction in ownership from above 50% to below 50%, particularly when occurring immediately after designation, requires enhanced due diligence to determine whether the divestment is genuine or merely an attempt to evade sanctions.

Sanctions and Compliance Domains emphasize the need for verification when documentation claims ownership reduction. Institutions must confirm authenticity, timing, beneficiaries of the transfer, and any continuing control influence by the designated person.

Approving the transaction before verification, removing screening, or rejecting without confirming details contradicts UK sanctions compliance expectations. Enhanced due diligence is the required first step.

Reference from Sanctions and Compliance Domains:

OFSI ownership and control criteria, including obligations when ownership reductions occur post-designation.

Requirements for enhanced due diligence to confirm legitimacy of divestment or restructuring.

Risk indicators of sanctions evasion through rapid ownership structure changes.

Question 6

Which has an obligation to accept and carry out UN Security Council Resolutions?

AAll members of the UN

BOnly permanent members of the Security Council

COnly members of the Security Council

DOnly countries that are targets of the resolution

Answer : A

Under the UN Charter, all United Nations member states are obligated to accept and carry out decisions of the UN Security Council. Sanctions and Compliance Domains emphasize that UN Security Council Resolutions issued under Chapter VII are binding on all UN members, not just Security Council members or targeted states.

Only member states have this obligation. Permanent membership or targeted status does not change the scope of obligation.

Reference from Sanctions and Compliance Domains:

UN Charter obligations for all Member States to implement Security Council Resolutions.

Binding nature of Chapter VII resolutions across all UN members.

Question 7

A financial institution's decision to adjust the degree of sensitivity of a screening tool should be based on its transaction volume and:

Anumber of staff.

Bpersonnel training.

Crisk assessment.

Dmanagement commitment.

Answer : C

Sanctions and Compliance Domains state that screening calibration must be tied directly to a financial institution's sanctions risk assessment, which evaluates products, customer base, geography, delivery channels, and transaction volume. Sensitivity adjustments must be justified by an institution's assessed sanctions exposure.

Staff levels or training do not determine screening thresholds; these are operational considerations. Management commitment supports governance but does not form the technical basis for calibration decisions.

Screening calibration tied to sanctions risk assessments.

Threshold adjustments must reflect actual sanctions exposure and transaction characteristics.

Acams Certified Global Sanctions Specialist CGSS Exam Practice Test