OFAC screening for smart contract wallets

Smart contract wallets automate transfers, so screening must run inside the contract's flow before any funds move.

TL;DR

TL;DR: Smart contract wallets should screen every counterparty against the SDN List before a transfer executes, because automation does not remove sanctions exposure: enforcement is strict liability.

Why smart contract wallets carry exposure

OFAC, the Office of Foreign Assets Control, blocks transactions involving the SDN List, the Specially Designated Nationals and Blocked Persons List. A smart contract wallet that sends funds automatically to a listed address still creates a violation: intent is not required, and civil penalties start at $356,000 per violation.

Screening before execution

sanctionsai.dev (agentmail) screens a counterparty before the agent pays, returning clean (ALLOW) or flagged (BLOCK) in one HTTP call under 100 ms. Because the check is fast, it can sit in the pre-execution path of a smart contract wallet without slowing the transaction meaningfully.

Handling the 50 Percent Rule

Remember the 50 Percent Rule: entities 50% or more owned by a blocked person are also blocked. A wallet controlled by such an entity is treated as blocked even if the listed person is not named on the wallet itself. The risk_score tool can flag elevated exposure, and dispute_open lets a user challenge a false positive.

Recording decisions on chain or off

Whether you store the decision on chain or off, keep it somewhere auditable. The STAMP step of the 4-Gate sequence gives each screening decision a durable record. That record is what you will point to if a transfer is ever questioned, showing the wallet was screened and the result was clean.