OFAC screening for payment infrastructure

Payment infrastructure providers must screen at every hop, from originator through intermediaries to beneficiary.

TL;DR

TL;DR: Payment infrastructure should screen each participant in the chain, originator, intermediaries, and beneficiary, not just the sender.

The full chain

A payment chain is rarely two parties. A transaction can pass through an originator, one or more intermediaries, and a beneficiary, and any of them can be a blocked party. OFAC's strict-liability standard applies to the whole chain, and civil penalties start at $356,000 per violation, so screening only the sender leaves real exposure.

Intermediary risk

Intermediaries are the easy place to miss a hit. A processor or correspondent that appears mid-flow can be a Specially Designated National, and the 50 Percent Rule can block an intermediary owned 50% or more by a blocked person. Screening each hop, against both the 19,218 SDN names and the 947 OFAC-listed crypto wallets, closes that gap.

A hop-level control

A hop-level control is practical because a screening API returns ALLOW or BLOCK in under 100 ms, fast enough to run at each step without slowing settlement. Log each result so the full chain is documented. Infrastructure that screens every hop builds the audit trail regulators expect.

Coverage at each hop

Define coverage per hop so nothing is skipped. The originator, each intermediary, and the beneficiary all get screened against the SDN list and the wallet list, with the 50 Percent Rule applied. A hop-level log entry, timestamped with the ALLOW or BLOCK result, is what proves the coverage existed.