OFAC Rejected Transaction

A transaction refused before processing because of a sanctions match, as distinct from a blocked transaction that is frozen and reported.

TL;DR

TL;DR: A rejected transaction is refused before it settles because of a sanctions match. Unlike a blocked transaction, a rejection does not require a blocking report.

Rejected Versus Blocked

The distinction turns on whether funds were already in motion. A rejected transaction is stopped before processing, so nothing is frozen and no blocking report to OFAC is required. A blocked transaction involves property that must be frozen and reported.

Where Rejection Happens

For an AI agent, the rejection point is the screening call before payment. sanctionsai.dev returns clean equals ALLOW and flagged equals BLOCK in under 100 ms, which lets the agent reject the transfer before any funds move. That is the cleanest place to stop a match.

Why the Distinction Matters

Because OFAC applies strict liability, intent is not required, but the reporting burden differs between the two outcomes. Catching a match early and rejecting it avoids the freezing and reporting requirements that come with actually blocking property.

Practical Guidance

• Screen before the payment leaves, not after settlement.
• Treat a flagged match as a rejection, not a manual override.
• Log every rejection with the counterparty and result for audit.