OFAC False Positive Glossary Part 1

What a false positive is in sanctions screening, and how agents handle a flag that is wrong.

TL;DR

TL;DR: A false positive is a screening match that is not a real hit, a name that looks like a listed party but is a different person or entity. Handling them well avoids both blocked good payments and missed real ones.

What a false positive is

In sanctions screening, a false positive occurs when a name or identifier matches the SDN List, the Specially Designated Nationals and Blocked Persons List, but the counterparty is not actually the listed party. Common names and transliteration differences are frequent causes.

Why false positives matter

Every false positive treated as a true hit blocks a legitimate payment and wastes review time. But over-correcting, by loosening matching to avoid false positives, risks the opposite problem: a false negative that lets a real listed party through. Because OFAC enforcement is strict liability and penalties start at $356,000 per violation, the cost of a miss is severe.

How agents should handle them

The sanctionsai.dev API screens a counterparty before an agent pays and returns ALLOW for clean or BLOCK for flagged in one call under 100 ms. When a flag looks wrong, use dispute_open to open a review rather than silently overriding the block. Not documented: the product's specific false positive rate.