CGSS Sample Questions & Answers
Governance and enforcement of sanctions programs carries the biggest share, ahead of due diligence and screening technology tied for second, with evasion techniques, identity concealment, and investigations and asset freezes filling out the rest.
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- Question 1Intermediate
Sanctions Screening · Screening Concepts and Technology
During a sanctions screening system validation, an auditor notes that the system is configured to generate alerts only on 'Exact Matches'. This configuration is most likely to result in which type of risk?
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Correct answer: A
Exact match configuration requires the name to be identical character-for-character. It fails to catch variations, misspellings, or transliteration differences (e.g., 'Mohammad' vs 'Mohammed'), leading to False Negatives where sanctioned entities slip through undetected. Best practice requires 'Fuzzy Matching'.
- Question 2Intermediate
Sanctions Investigations and Asset Freezing · Asset Freezing and Reporting
A compliance officer at a European bank identifies a transaction involving a company listed on the US Sectoral Sanctions Identifications (SSI) List. The transaction involves providing 90-day financing for energy equipment. Under Directive 2 (Energy Sector), new debt with a maturity of greater than 60 days is prohibited.
What is the appropriate immediate action for the bank?
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Correct answer: B
Sectoral Sanctions (SSI List) typically prohibit specific types of transactions (like dealing in new debt > X days) but do NOT block the entity's assets entirely. Unlike SDN list matches which require blocking (freezing), transactions violating sectoral constraints are generally 'Rejected' (returned), provided the entity is not also on the SDN list.
- Question 3Advanced
Governance and Enforcement · Key Concepts of Sanctions
Which of the following describes the key difference between the EU and US approaches to sanctions ownership and control?
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Correct answer: C
While the US (OFAC) uses the 50% Rule (aggregating ownership), it generally does not treat entities controlled (but not owned 50%+) by SDNs as automatically blocked by operation of law (though they advise caution). The EU explicitly considers entities 'controlled' by a sanctioned person as subject to asset freezes, regardless of the specific ownership percentage.
- Question 4Intermediate
Sanctions Evasion Techniques · Trade-Related Evasion Techniques
A trade finance officer notices a Bill of Lading (BL) where the vessel name is listed as 'GHOST' but the IMO number corresponds to a vessel named 'OCEAN PRIDE' which was recently sanctioned. The port of loading has been changed manually on the document. This scenario best illustrates which sanctions evasion technique?
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Correct answer: B
This is a classic example of trade-based evasion using documentary fraud. The evader alters the vessel name on the documents to bypass name screening, but the unique IMO number (which stays with the ship) reveals the true identity. Manual alterations to ports or vessel names are major red flags.
- Question 5Intermediate
Sanctions Due Diligence · Beneficial Ownership Calculation
When conducting sanctions due diligence on a new corporate client, which of the following actions is MOST critical to identifying potential indirect sanctions risks?
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Correct answer: B
Effective sanctions due diligence requires 'unwrapping' the corporate structure to find the Ultimate Beneficial Owners (UBOs). Sanctioned individuals often hide behind layers of shell companies. Screening only the immediate client entity would miss indirect ownership risks (e.g., 50% rule violations).
- Question 6IntermediateSelect 2
Governance and Enforcement · Licensing and Permitted Activities
Select TWO features that are characteristic of 'General Licenses' issued by OFAC. (Select TWO)
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Correct answers: B, C
General Licenses are published in the regulations and authorize a specific type of activity for a class of persons without needing to apply. They are 'self-executing,' meaning if you meet the criteria, you can proceed.
While you don't need prior approval, General Licenses often mandate strict record-keeping and sometimes require filing reports (e.g., humanitarian exports) to confirm the license was used.
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