A compliance officer was recently reviewing transactional data for an international charity and found transactions that present a higher risk. Which reason is cause for terminating the banking…

Question

Options

• AThe charity has had a high a high turnover rate of official positions
• BThe charity has several incoming international funds transfers
• CThe flow of funds both in and out are complex and hard to trace
• DThe charity is headquartered in a country on the Office of Foreign Assets Control list

• A
  3% (1)
• B
  12% (4)
• C
  3% (1)
• D
  82% (27)

Explanation

The Office of Foreign Assets Control (OFAC) is a US agency that administers and enforces economic and trade sanctions based on US foreign policy and national security goals. OFAC has a list of sanctions programs and country information for various regions and topics, such as Russia, Iran, North Korea, Cuba, and more. If a charity is headquartered in a country on the OFAC list, it means that the US government has imposed restrictions or prohibitions on transactions or dealings with that country, its government, entities, or individuals. This poses a high risk of violating the sanctions regulations and exposing the bank to legal, regulatory, or reputational consequences. Therefore, the bank may decide to terminate the banking relationship with the charity to avoid such risks.

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