OFAC Screening Due Diligence

The obligation to investigate a potential sanctions match instead of dismissing it without review or letting the payment proceed.

TL;DR

TL;DR: Due diligence means a possible match is reviewed before action, not waved through. A flagged counterparty is investigated and documented rather than ignored.

What Due Diligence Requires

When screening surfaces a potential match against the SDN List, due diligence is the step that determines whether the match is real. It means comparing identifiers, checking ownership under the 50 Percent Rule, and recording a disposition. Dismissing a match without review is not due diligence.

Why the Obligation Is Strict

OFAC operates under strict liability, meaning intent is not required for a violation. Because of that, the burden falls on the party moving money to show they looked before they paid. Skipping the review because the name is only a partial match does not remove the risk.

Due Diligence for Agent Payments

An AI agent that pays a counterparty acts as the screening point. The 4-Gate Agent Payment Protocol maps this: SCREEN, then SCORE, then STOP, then STAMP. kya_verify (know your agent) and risk_score give the agent a way to document the review it performed before it approved or blocked a transfer.

Practical Guidance

• Treat every partial match as reviewable, not dismissible.
• Document the reason a match was cleared or blocked.
• Escalate unclear cases to a compliance human instead of auto-approving.