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5:00Sanctions Screening: How a Payment Gets Frozen Mid-Flight
A $40,000 wire leaves New York for Dubai and stops dead at a correspondent bank. Nobody declined it for lack of funds. An automated filter matched a name to a government list, and now the money is legally stuck.
Every cross-border payment passes through a silent checkpoint. Before a wire settles, banks run the message against government sanctions lists, principally the U.S. Treasury's OFAC SDN List (Specially Designated Nationals), plus the UK's OFSI consolidated list, the EU list, and UN designations. The screening is automated and runs in real time or near-real time on both inbound and outbound payments, because OFAC's rule is blunt: faster settlement never reduces the obligation. If a payment can't be cleared by the filter before it settles, it must be held.
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