Post 9/11
This department consolidated various security functions from different federal agencies into a single department
Department of Homeland Security
Comprehensive, jurisdictional programs that prohibit transactions with a particular country (e.g., Iran, North Korea, Syria)
Country-based sanctions
OFAC is part of this department
US Department of the Treasury
The process by which bad actors disguise the origins of illicit funds
Money Laundering
A set of additional screening measures implemented to assess and monitor high risk customers or business relationships
Enhanced Due Diligence (EDD)
These are two examples of how sanctions compel bad actors to cease illicit activities
- Deprivation of economic resources
- Naming and shaming
These sanctions target specific individuals who are associated with regimes that are considered problematic (e.g., Venezuela)
Regime-based sanctions
This is a list of individuals and entities located throughout the world that are blocked based on the various sanctions programs administered by OFAC
SDN List
The three stages of money laundering
- Placement
- Layering
- Integration
True or false: FinClusive customers can order an EDD report via API
True
These are three examples of the tangible consequences that can be imposed by sanctions
- Prohibiting financial transactions
- Freezing of assets
- Bans and restrictions on various activities, such as travel
Prohibitions on dealings with individuals or entities who are usually involved in some specific type of bad conduct (e.g., drug trafficking program)
Conduct-based sanctions
SDN stands for _________
Specially Designated Nationals
The stage of money laundering in which funds are returned as "clean" money that can be spent on tangible assets like real estate or cars
Integration
True or false: EDD reports are required to include adverse media screening
False
This act criminalized the financing of terrorism
The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, better known as the USA PATRIOT Act
Limited restrictions on particular types of activity with targeted entities (e.g., sanctions imposed specific types of transactions with Russian targets in the wake of the annexation of Crimea)
Sectoral Sanctions
This rule stipulates that any entity owned in the aggregate, directly or indirectly, 50% or more by one or more blocked persons, is itself considered blocked
OFAC 50% Rule
The stage of money laundering in which multiple transactions are conducted with the goal of further disguising the origin of funds
Layering
True or false: ideally, every customer should be subject to EDD in order to minimize risk
False
This executive order authorized sanctions against individuals and groups involved in terrorism
Executive Order 13224
These sanctions seek to impact the behavior of non-US persons by threatening their access to the US financial system or US markets for dealing with parties who are subject to primary sanctions
Secondary sanctions
These persons must comply with OFAC regulations
All US persons must comply with OFAC regulations, in addition to foreign subsidiaries owned or controlled by US companies
The underlying criminal act that generates the funds for subsequent illegal activity
Predicate offense
Under this methodology, an organization identifies, assesses, and understands the money laundering and terrorist financing risk to which they are exposed, and take appropriate mitigation measures in accordance with the level of risk
Risk-Based Approach