Final exam · 12 questions · pass at 10/12

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12 questions across all 3 chapters. Score 10 or better and claim a free, verifiable certificate of completion you can add to your LinkedIn profile. Retake it as often as you like.

01 Chapter 1 What event prompted the US Treasury to establish the Office of Foreign Funds Control in 1940?

A Japan's attack on Pearl Harbor and the entry of the US into the Pacific War B The start of the Korean War and China's intervention in the conflict C The Cuban Missile Crisis and the threat of nuclear escalation D Nazi Germany's invasion of Norway and the need to protect occupied nations' assets

02 Chapter 1 When China entered the Korean War in 1950, President Truman responded by taking which action that directly shaped OFAC's creation?

A Passing the International Emergency Economic Powers Act through Congress B Declaring a national emergency and ordering the freeze of all Chinese and Korean assets under US control C Imposing selective sanctions on Chinese defense contractors only D Establishing a new UN sanctions committee to coordinate allied responses

03 Chapter 1 An analyst at a compliance conference describes a sanctions program that restricts all economic activity with a specific country, including trade, finance, and investment. What category does this fall under?

A Secondary sanctions, which apply to non-US persons doing business with the target B Selective sanctions, which target specific sectors while allowing general trade C Comprehensive sanctions, which prohibit virtually all dealings with the target country D Multilateral sanctions, which require UN Security Council approval

04 Chapter 1 Which two mechanisms does OFAC primarily use to enforce US foreign policy and national security objectives?

A Asset blocking and trade restrictions applied to designated targets B Criminal prosecution and civil asset seizure through federal courts C Export license revocation and financial institution charter suspension D Import tariffs and foreign investment screening under CFIUS

05 Chapter 2 A compliance officer is asked to explain the two sources of authority behind OFAC sanctions programs. What is the correct answer?

A The UN Security Council and the Financial Action Task Force B Acts of Congress and presidential emergency powers, including orders issued under IEEPA C The Federal Reserve and the Financial Stability Oversight Council D The State Department and the Department of Justice jointly

06 Chapter 2 Your bank's screening system returns a high-confidence match against the SDN list for a counterparty in an inbound wire. What is the required course of action?

A Reject the payment and return the funds to the originating institution without further action B Place a 30-day hold on the funds and conduct enhanced due diligence before deciding C Allow the transaction to process and file a Suspicious Activity Report within 24 hours D Block the funds immediately, report the blocking to OFAC within 10 business days, and retain the assets

07 Chapter 2 Which of the following best describes the range of parties included on the SDN list?

A Entities owned or controlled by targeted governments, as well as individuals and organizations designated under non-country-specific programs such as terrorism and narcotics trafficking B Only foreign heads of state and senior government officials of sanctioned countries C Financial institutions that have received regulatory enforcement actions for AML failures D All foreign companies with majority state ownership in any country

08 Chapter 2 As of August 2021, how many active OFAC sanctions programs were in place?

A 12 programs, covering the major state sponsors of terrorism B 24 programs, split evenly between country and non-country designations C 36 programs, ranging from comprehensive country programs to selective thematic programs D 48 programs, each requiring a separate compliance module

09 Chapter 3 A payment arrives at your institution with a name that partially matches an SDN entry, but your investigation cannot definitively confirm the counterparty is the designated party. What is the correct treatment?

A Reject the payment and return the funds to the originating institution pending further investigation B Block the funds and file a 10-day OFAC report while investigation continues C Process the payment and document your inconclusive findings in the case file D Hold the funds for 10 business days and then release them if no confirmation arrives

10 Chapter 3 Your institution blocks a transaction after confirming an SDN match on a Tuesday morning. By which day must you report the blocking to OFAC?

A Within 10 business days of the date the funds were blocked B Within 30 calendar days of the date of the original transaction C Within 5 business days of your internal compliance committee approval D Within 60 calendar days of the date the SDN designation was first published

11 Chapter 3 A regional logistics company asks whether OFAC sanctions apply to it, since it is not a bank. What is the accurate answer?

A No, OFAC rules apply only to banks and broker-dealers registered with the SEC B Yes, all US persons including non-financial businesses must comply with OFAC sanctions C Only if the company has annual revenues above $10 million or operates internationally D Only if the company holds a federal money transmission license

12 Chapter 3 What are the maximum individual penalties for an OFAC sanctions violation?

A A $1 million civil fine and up to 10 years in prison B A $5 million civil fine and up to 20 years in prison C A $20 million civil fine and up to 30 years in prison D A $50 million civil fine and a lifetime ban from the financial industry

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