CGSS Chapter 5: Sanctions Investigations
Generally, what is involved in a sanctions investigation? - Answer- A sanctions investigation is the
process of obtaining, evaluating, recording, and storing information about an individual or legal
entity with whom one is conducting business, in response to an alert indicating a possible
sanctions violation.
Investigations often begin with simple checks before progressing to further investigation such as
1) account review
2) customer outreach
3) possible escalation to the compliance function.
As one of the first steps in an investigation, what is a simple check? - Answer- Simple checks are
one of the first steps in an investigation.
Essentially, they are the initial actions taken to discount or confirm a sanctions link.
An example of a simple check includes comparing data about a sanctions target with a firm's
Know Your Customer (KYC) data.
What are the five steps comprising a typical sanctions investigation? - Answer- Although the
details of every investigation are unique, most investigations share a common process. Case
investigation teams and alert management teams often use a five-step decision tree to determine
which alerts can reasonably be discounted and which alerts warrant an investigation:
1) Determine whether a sanctions restriction applies to
the case under investigation.
2) Determine what types of restrictions the applicable
sanctions impose.
3) Determine whether the sanctions that might apply
have actually been violated.
4) Determine how the sanctions violation occurred.
5) Record and document the findings.
Define mirror trade. - Answer- A mirror trade is a type of trade that involves buying securities in
one currency and then selling identical ones in another currency.
What is the difference between primary and secondary sources of information in a sanctions
compliance context? - Answer- Primary sources of information provide direct evidence about
sanctions and sanctions targets. Sanctions instruments and official sanctions lists published by
government bodies and their regulators represent a critical type of primary source. These key
primary sources encompass various types of documents, including key legal documents, key
sanctions lists, key trade activity lists, and transaction activity.
Secondary sources contain information that has generally already appeared in primary
documents. Commonly used secondary sources include corporate registers, third-party
databases, and media publications.
Generally, what is involved in a sanctions investigation? - Answer- A sanctions investigation is the
process of obtaining, evaluating, recording, and storing information about an individual or legal
entity with whom one is conducting business, in response to an alert indicating a possible
sanctions violation.
Investigations often begin with simple checks before progressing to further investigation such as
1) account review
2) customer outreach
3) possible escalation to the compliance function.
As one of the first steps in an investigation, what is a simple check? - Answer- Simple checks are
one of the first steps in an investigation.
Essentially, they are the initial actions taken to discount or confirm a sanctions link.
An example of a simple check includes comparing data about a sanctions target with a firm's
Know Your Customer (KYC) data.
What are the five steps comprising a typical sanctions investigation? - Answer- Although the
details of every investigation are unique, most investigations share a common process. Case
investigation teams and alert management teams often use a five-step decision tree to determine
which alerts can reasonably be discounted and which alerts warrant an investigation:
1) Determine whether a sanctions restriction applies to
the case under investigation.
2) Determine what types of restrictions the applicable
sanctions impose.
3) Determine whether the sanctions that might apply
have actually been violated.
4) Determine how the sanctions violation occurred.
5) Record and document the findings.
Define mirror trade. - Answer- A mirror trade is a type of trade that involves buying securities in
one currency and then selling identical ones in another currency.
What is the difference between primary and secondary sources of information in a sanctions
compliance context? - Answer- Primary sources of information provide direct evidence about
sanctions and sanctions targets. Sanctions instruments and official sanctions lists published by
government bodies and their regulators represent a critical type of primary source. These key
primary sources encompass various types of documents, including key legal documents, key
sanctions lists, key trade activity lists, and transaction activity.
Secondary sources contain information that has generally already appeared in primary
documents. Commonly used secondary sources include corporate registers, third-party
databases, and media publications.
