STEP-06-STATE-MACHINE-EX-ST-01.md

Version: 1.0 Status: DRAFT Date: 2026-02-09

1. Purpose of the State Machine

This state machine governs the lifecycle of Settlement under EX-ST-01, ensuring governance control, separation of confirmation, verification, and proof, and auditability. It is implementation-agnostic and does not define payment methods or accounting logic.

2. Canonical State List

• INITIATED
• PAYMENT_EVIDENCE_SUBMITTED
• UNDER_VERIFICATION
• VERIFIED
• ANCHORED
• SETTLED
• REJECTED
• CANCELLED

3. State Definitions

| State | Governance Meaning | Allowed Roles | Mandatory Records | Explicit Prohibitions | |--------------------------|--------------------------------------------------------|------------------------|----------------------------------|------------------------------------------------------| | INITIATED | Settlement process formally started | Payer Authority | Settlement Request Record | No payment evidence submitted | | PAYMENT_EVIDENCE_SUBMITTED | Payment evidence formally submitted | Payer Authority | Proof of Payment Record | No verification before evidence | | UNDER_VERIFICATION | Payment evidence under independent review | Financial Verifier | Verification Record | No confirmation, no anchoring | | VERIFIED | Payment evidence verified as valid | Financial Verifier | Verified Settlement Record | No settlement confirmation, no anchoring | | ANCHORED | Settlement record hash anchored for proof only | Oversight/Audit Role | Anchoring Proof | No settlement confirmation, no payment | | SETTLED | Settlement confirmed and closed | Oversight/Audit Role | Settlement Confirmation Record | No further changes, no anchoring | | REJECTED | Settlement rejected due to nonconformity or error | Financial Verifier | Rejection Record | No settlement, no anchoring, no confirmation | | CANCELLED | Settlement process cancelled before completion | Payer Authority | Cancellation Record | No settlement, no anchoring, no confirmation |

4. State Transitions (Conceptual)

| From State | To State | Triggering Condition | Responsible Role | Required Evidence | |--------------------------|---------------------------|-------------------------------------|----------------------|----------------------------------| | INITIATED | PAYMENT_EVIDENCE_SUBMITTED| Payment evidence submitted | Payer Authority | Proof of Payment Record | | PAYMENT_EVIDENCE_SUBMITTED| UNDER_VERIFICATION | Verification initiated | Financial Verifier | Verification Record | | UNDER_VERIFICATION | VERIFIED | Verification completed, valid | Financial Verifier | Verified Settlement Record | | UNDER_VERIFICATION | REJECTED | Verification failed | Financial Verifier | Rejection Record | | VERIFIED | ANCHORED | Anchoring initiated | Oversight/Audit Role | Anchoring Proof | | ANCHORED | SETTLED | Settlement confirmation | Oversight/Audit Role | Settlement Confirmation Record | | Any (pre-terminal) | CANCELLED | Cancellation by authority | Payer Authority | Cancellation Record |

5. Governance Invariants

• Contract finalization under EX-CT-01 MUST be completed before INITIATED.
• Verification, confirmation, and anchoring MUST be performed by separate roles.
• No settlement may occur without independent verification.
• Anchoring MUST be proof only and MUST NOT imply correctness or approval.
• No implicit or automatic transitions are allowed.
• No single-person settlement confirmation.

6. Terminal States

• SETTLED (final, immutable)
• CANCELLED (final, immutable)

7. Audit & Traceability Requirements

• All state transitions MUST be logged with actor, timestamp, and evidence reference.
• All records MUST be immutable after SETTLED or CANCELLED.
• Full traceability from contract to settlement MUST be maintained.

8. Anchoring Positioning

• Only hashes of verified settlement records MAY be anchored.
• Anchoring is cryptographic proof ONLY and MUST NOT imply approval or correctness.
• No anchoring of payment or accounting data.

9. UNDEFINED Items

• Specific regulatory requirements for financial verification: UNDEFINED
• Organizational policy for settlement cancellation: UNDEFINED
• Retention period for settlement records: UNDEFINED