Certified AML FinTech Compliance Associate (CAFCA) Practice Test

Question: 1 / 400

What is the effect of sanctions on financial institutions?

Increased transaction volume

Institutions must comply to prevent facilitating transactions with sanctioned entities

Sanctions impose legal and operational obligations on financial institutions to avoid conducting business with targeted individuals, entities, or countries. Therefore, institutions must comply with these sanctions to ensure they do not facilitate transactions that involve sanctioned parties. This compliance involves rigorous monitoring of transactions, customers, and counterparties to detect and prevent any dealings that could violate sanctions.

Failure to adhere to these requirements can lead institutions to significant legal consequences, including fines and reputational damage. Consequently, the obligation to comply underscores the fundamental responsibility that financial institutions have in maintaining the integrity of the financial system and adhering to regulatory mandates.

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Restrictions on customer deposits

Higher interest rates for loans

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