diff --git a/keep-enclave/enclave/src/vsock_server.rs b/keep-enclave/enclave/src/vsock_server.rs
index 94ab2dbf..a74fd006 100644
--- a/keep-enclave/enclave/src/vsock_server.rs
+++ b/keep-enclave/enclave/src/vsock_server.rs
@@ -3,7 +3,7 @@
 use crate::error::{EnclaveError, Result};
 use crate::kms::{EncryptedWallet, EnclaveKms};
 use crate::policy::{PolicyConfig, PolicyDecision, PolicyEngine, SigningContext};
-use crate::signer::EnclaveSigner;
+use crate::signer::{EnclaveSigner, PsbtAnalysis};
 use bitcoin::Network;
 use serde::{Deserialize, Serialize};
 use std::time::{SystemTime, UNIX_EPOCH};
@@ -448,13 +448,44 @@ impl VsockServer {
             }
         };
 
+        if let Some(denied) =
+            self.enforce_destination_policies(&analysis, &req.key_id, total_spend, timestamp)
+        {
+            return denied;
+        }
+
+        match self.signer.sign_psbt(&req.key_id, &req.psbt, network) {
+            Ok((signed_psbt, signed_inputs, _)) => {
+                self.policy_engine.record_operation(&req.key_id);
+                EnclaveResponse::SignedPsbt {
+                    psbt: signed_psbt,
+                    signed_inputs,
+                }
+            }
+            Err(e) => EnclaveResponse::Error {
+                code: ErrorCode::SigningFailed,
+                message: e.to_string(),
+            },
+        }
+    }
+
+    /// Evaluate the policy engine against each non-change destination. Returns the
+    /// error response to send back if any destination is denied or requires
+    /// approval, or `None` when every destination is allowed.
+    fn enforce_destination_policies(
+        &mut self,
+        analysis: &PsbtAnalysis,
+        key_id: &str,
+        total_spend: u64,
+        timestamp: u64,
+    ) -> Option<EnclaveResponse> {
         for dest in &analysis.destinations {
             if dest.is_change {
                 continue;
             }
             let addr = dest.address.as_deref();
             let ctx = SigningContext {
-                key_id: &req.key_id,
+                key_id,
                 amount_sats: Some(total_spend),
                 destination: addr,
                 event_kind: None,
@@ -464,33 +495,20 @@ impl VsockServer {
             match self.policy_engine.evaluate(&ctx) {
                 PolicyDecision::Allow => {}
                 PolicyDecision::Deny(reason) => {
-                    return EnclaveResponse::Error {
+                    return Some(EnclaveResponse::Error {
                         code: ErrorCode::PolicyDenied,
                         message: format!("Destination {:?} denied: {}", addr, reason),
-                    };
+                    });
                 }
                 PolicyDecision::RequireApproval => {
-                    return EnclaveResponse::Error {
+                    return Some(EnclaveResponse::Error {
                         code: ErrorCode::PolicyDenied,
                         message: format!("Destination {:?} requires approval", addr),
-                    };
-                }
-            }
-        }
-
-        match self.signer.sign_psbt(&req.key_id, &req.psbt, network) {
-            Ok((signed_psbt, signed_inputs, _)) => {
-                self.policy_engine.record_operation(&req.key_id);
-                EnclaveResponse::SignedPsbt {
-                    psbt: signed_psbt,
-                    signed_inputs,
+                    });
                 }
             }
-            Err(e) => EnclaveResponse::Error {
-                code: ErrorCode::SigningFailed,
-                message: e.to_string(),
-            },
         }
+        None
     }
 
     fn handle_set_policy(&mut self, config: PolicyConfig) -> EnclaveResponse {