By SanctionsAI team · Updated 2026-08-09

How to block and reject OFAC-prohibited transactions

When sanctions screening identifies a match, you must either block or reject the transaction. The difference matters.

Block vs. Reject

ActionWhenWhat happensReporting
BlockSDN property or sanctioned jurisdictionFunds frozen in blocked account10 business days
RejectCannot process, no blocked propertyFunds returned to sender10 business days

When to block

Transaction involves SDN-listed person or comprehensively sanctioned jurisdiction (Iran, North Korea, Syria, Cuba, Crimea). Funds placed in blocked interest-bearing account.

Blocking procedure

Step 1: Freeze funds immediately. Step 2: Notify customer (without SAR tipping off). Step 3: File OFAC blocking report within 10 business days. Step 4: File annual report by September 30. Step 5: Maintain records 5 years.

Do NOT release blocked funds without specific OFAC authorization.

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Frequently Asked Questions

What is blocking vs. rejecting?
Blocking freezes funds (SDN matches). Rejecting returns funds (cannot process but no blocked property).
When must I file a blocking report?
Within 10 business days of blocking. Annual report by September 30.
Can I release blocked funds?
Only with specific OFAC authorization (a license).
What happens to interest on blocked accounts?
Interest accrues to the blocked account. Funds remain blocked until OFAC authorizes release.

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