OFAC Sanctions Screening Obligation

The legal requirement for US persons to check counterparties against sanctions lists before transacting.

TL;DR

TL;DR: US persons must check counterparties against OFAC sanctions lists before transacting, and under strict liability a missed check is a violation even without intent.

Where the obligation comes from

OFAC programs prohibit transactions with blocked parties, and the obligation to avoid those transactions effectively requires checking who you are dealing with. The obligation applies to US persons, which includes citizens, residents, and entities, and extends to the payment flows they operate. The 50 Percent Rule broadens it further: entities owned 50 percent or more by a blocked person are also blocked. The obligation applies before the transaction, which is why screening is built into the payment flow rather than performed afterward.

Strict liability changes the stakes

Screening is not optional diligence; it is the mechanism for meeting a strict liability standard. Intent is not required for a violation, and civil penalties start at $356,000 per violation. A party that never looked at a list is in no better position than one that looked and ignored it, because the violation is the transaction itself. The obligation also applies continuously: a party who was clean last month can be designated this month.

Meeting the obligation for agents

For AI agents that pay on their own, the obligation is met programmatically or not at all. sanctionsai.dev screens the counterparty in one HTTP call, returning ALLOW or BLOCK before funds move. Payment rails like x402, AP2, ACP, and Coinbase AgentKit move money but do not screen, so the obligation falls to the developer who adds the check.