OFAC sanctions screening explained

A plain-language explanation of what OFAC sanctions screening is and how it fits into payment flows.

TL;DR

TL;DR: Sanctions screening is a lookup that checks a counterparty against the US Treasury SDN List before a payment, returning a clean or flagged result.

The basic idea

OFAC, the Office of Foreign Assets Control at the US Treasury, publishes the SDN List of Specially Designated Nationals and Blocked Persons. Transacting with anyone on that list is illegal, and liability is strict, meaning intent is not required. Screening is the step that checks a counterparty against that list before money moves.

How the check works

In practice, screening is one API call. sanctionsai.dev accepts a counterparty, such as a wallet address or a name, and returns ALLOW or BLOCK in under 100 ms. The check runs against 19,218 SDN names, 947 OFAC-listed crypto wallets, and 16 jurisdictions, synced hourly so results reflect the current list.

Why it matters for payments

Without screening, a payment has no guard against a sanctioned destination. With it, a clean counterparty is allowed and a flagged one is blocked before settlement. Because civil penalties start at $356,000 per violation, the cost of skipping the check far outweighs the cost of running it.