A payment can be commercially genuine and still require enhanced review because of the parties, goods, ownership, end use, or payment route. Compliance therefore begins before the transfer instruction.
This checklist belongs to our China Payments cluster; the foreign-exchange side of the same question is covered separately.
Screen the parties
Identify and verify:
Importer and beneficial owners
Supplier and beneficial owners
Beneficiary-account owner
Manufacturer when different from the seller
Freight forwarder and customs broker where relevant
Agents, distributors, and collection entities
Banks and financial intermediaries in the proposed route
Names should be screened against applicable sanctions and restricted-party lists. For US-connected trade, the Consolidated Screening List brings together several Commerce, State, and Treasury restrictions, but it does not replace legal analysis of the relevant program.
Understand the goods and end use
Generic descriptions such as “electronics,” “parts,” or “equipment” may be insufficient. Determine:
Exact product
Quantity and value
Harmonized or commodity code when available
Manufacturer
Origin and destination
End user
End use
Whether the item is controlled, dual use, restricted, or subject to licensing
US export controls can apply to exports, reexports, and certain foreign-produced items. A payment provider's willingness to transmit funds does not establish that the underlying shipment is legally permitted.
Verify ownership and affiliates
Restrictions may extend beyond the exact name typed into a payment instruction. The US Commerce Department announced an affiliates rule under which entities at least 50% owned by one or more Entity List or Military End-User List entities can themselves become subject to restrictions. In November 2025 the Department suspended that rule for one year, to November 2026, so check its current status with the Bureau of Industry and Security before relying on it. Ownership matters either way: the 50% rule in OFAC sanctions programs continues to apply.
OFAC's China-related programs are not a blanket prohibition on ordinary trade with China. Their scope varies. For example, the Chinese Military-Industrial Complex program focuses on specified securities-related prohibitions rather than automatically banning every commercial payment to every listed company's affiliate. Apply the actual rule, not a country-level assumption.
Review the payment flow
Map:
Source of funds
v
Funding account
v
FX or stablecoin conversion, if any
v
Sending institution
v
Intermediaries
v
Beneficiary bank and account
v
Contractual supplier
Explain every entity that touches the funds. Undisclosed collection accounts, nested payment providers, unrelated beneficiaries, and unexplained refunds create risk.
Own funds or customer funds
An importer paying its own invoice is different from a platform collecting money from many importers and paying their suppliers. The second model may trigger money-transmission, payment-services, safeguarding, AML, and licensing obligations in one or more jurisdictions.
Keep an audit file
Retain corporate checks, screening results, invoice, contract, shipping evidence, beneficiary verification, bank correspondence, approvals, and the rationale for unusual features. Records should show what was known when the payment was approved.
Request a compliance-structure review
Provide the complete flow of funds, all legal entities, ownership, goods, origin and destination, currencies, rails, customer-versus-own-funds status, transaction size, monthly volume, and proposed provider roles.
Related guides
Last reviewed: 1 October 2026.