Exam CGSS Topic 5 Question 72 Discussion

Actual exam question for ACAMS's CGSS exam
Question #: 72
Topic #: 5
"Al-Falah Company", registered in Dubai, wants to open an account at a financial institution. Through due diligence, the compliance team finds out that "El-Fallah Investments", based in Iraq, is under UN sanctions for facilitating terrorism financing. The listed Chief Executive Officer (CEO) of the sanctioned entity is not the same as the CEO of the potential client. How should the compliance team proceed?

Suggested Answer: B Vote an answer

Sanctions and Compliance Domains state that when entities share similar names, regions, or other characteristics with a sanctioned party - even when executive leadership differs - the institution must perform enhanced due diligence to rule out affiliation, ownership, or control links.
The similarity in names ("Al-Falah" vs. "El-Fallah"), geographic proximity, and the involvement of UN-sanctioned terrorism-related activity require deeper investigation. Compliance teams must confirm corporate records, ownership structure, purpose, and possible indirect connections before making a determination.
Automatic rejection is premature without evidence. Onboarding without further investigation is inappropriate.
Reference:
Name similarity and geographic proximity as sanctions escalation triggers.
Requirements for enhanced due diligence when possible indirect links exist.

by Augus at Mar 25, 2026, 06:45 AM

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