One key aspect of the Office of Foreign Assets Control's extraterritorial reach includes the blocking of certain non-United States initiated transactions for or through the United States (U.S.) for benefit of a restricted person or entity.
Under which three circumstances are U.S. banks required to block transactions? (Choose three.)
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A. B. C. D. E.ABD
The Office of Foreign Assets Control (OFAC) is a department of the U.S. Treasury responsible for enforcing U.S. economic sanctions programs. OFAC has extraterritorial reach, meaning it can regulate transactions that occur outside the U.S. if they involve U.S. persons, U.S. banks, or U.S. territory.
Under certain circumstances, U.S. banks are required to block transactions involving a restricted person or entity. OFAC's regulations require U.S. banks to block transactions under the following three circumstances:
A. Transactions to, or going through, a blocked entity: U.S. banks are required to block transactions that are directly to or through a blocked person or entity. This means that if OFAC has designated a person or entity as blocked, U.S. banks cannot process any transactions that involve that person or entity, regardless of the purpose of the transaction.
B. Transactions by or on behalf of a blocked individual or entity: U.S. banks are required to block transactions that are initiated or facilitated by a blocked person or entity, or that are done on their behalf. This means that if a blocked person or entity is trying to send money or receive money through a U.S. bank, the bank is required to block the transaction.
D. Transactions in connection with a transaction in which a blocked individual or entity has an interest: U.S. banks are required to block transactions that are related to a transaction in which a blocked person or entity has an interest. This means that if a U.S. bank knows or has reason to know that a transaction is related to a blocked person or entity, the bank is required to block the transaction.
C and E are not correct answers.
C. Those that are by or on behalf of a blocked individual and a licensed entity: This answer is incorrect because if an individual is blocked, any transaction initiated by or on behalf of that individual would be blocked regardless of whether a licensed entity is involved.
E. Those that are in connection with a transaction in which a blocked individual or entity has no interest: This answer is incorrect because OFAC's regulations require U.S. banks to block transactions that are related to a transaction in which a blocked person or entity has an interest, regardless of whether the blocked person or entity has an interest in the actual transaction being processed.