What is a blocked transaction?

A blocked transaction is one where funds are frozen because of a sanctions match, not simply declined and returned.

TL;DR

TL;DR: A blocked transaction is a payment or transfer frozen because a counterparty matched the SDN List. Unlike a rejected transaction, blocked funds must be reported to OFAC within 10 business days.

Blocked vs. rejected

Both outcomes stop a payment, but they mean different things. A rejected transaction is declined before value moves, so nothing is held. A blocked transaction occurs when a sanctions match freezes the funds, meaning the property is now subject to OFAC's blocking rules rather than simply sent back to the sender.

How screening produces a block

sanctionsai.dev (agentmail) screens a counterparty before an AI agent pays. The result is clean or flagged: clean means ALLOW, and flagged means BLOCK. When the check returns flagged, the agent should not complete the transfer, which avoids creating a blocked transaction in the first place.

Why the distinction matters

Under OFAC, sanctions enforcement is strict liability: intent is not required. Civil penalties start at $356,000 per violation. Because blocked funds carry a separate reporting duty, the best control is to catch the match before the money moves, using a single HTTP call that returns in under 100 ms.

Handling a blocked transaction correctly

If a transfer is already blocked, do not attempt to move or return the funds on your own. OFAC's blocking rules require the property to be held and reported, so work with counsel. The cleaner path is prevention: screen first with sanctionsai.dev, so the payment never completes against a listed party in the first place.