diff --git a/lib/core-integration/src/Test/Integration/Framework/TestData.hs b/lib/core-integration/src/Test/Integration/Framework/TestData.hs
index 92d0e0a764d..2a72ffb654a 100644
--- a/lib/core-integration/src/Test/Integration/Framework/TestData.hs
+++ b/lib/core-integration/src/Test/Integration/Framework/TestData.hs
@@ -101,6 +101,7 @@ module Test.Integration.Framework.TestData
     , errMsg403TemplateInvalidDuplicateXPub
     , errMsg403TemplateInvalidScript
     , errMsg403InvalidConstructTx
+    , errMsg403ForeignTransaction
     ) where
 
 import Prelude
@@ -637,6 +638,13 @@ errMsg400ScriptNotUniformRoles :: String
 errMsg400ScriptNotUniformRoles =
     "All keys of a script must have the same role: either payment or delegation."
 
+errMsg403ForeignTransaction :: String
+errMsg403ForeignTransaction = mconcat
+    [ "The transaction to be submitted is foreign to the current wallet "
+    , "and cannot be sent. Submit a transaction that has either input, output "
+    , "or withdrawal belonging to the wallet."
+    ]
+
 --------------------------------------------------------------------------------
 -- Transaction metadata
 --------------------------------------------------------------------------------
diff --git a/lib/core-integration/src/Test/Integration/Scenario/API/Shelley/TransactionsNew.hs b/lib/core-integration/src/Test/Integration/Scenario/API/Shelley/TransactionsNew.hs
index d95b4b6adc9..79f72c06041 100644
--- a/lib/core-integration/src/Test/Integration/Scenario/API/Shelley/TransactionsNew.hs
+++ b/lib/core-integration/src/Test/Integration/Scenario/API/Shelley/TransactionsNew.hs
@@ -174,6 +174,7 @@ import Test.Integration.Framework.DSL
 import Test.Integration.Framework.TestData
     ( errMsg403Collateral
     , errMsg403Fee
+    , errMsg403ForeignTransaction
     , errMsg403InvalidConstructTx
     , errMsg403MinUTxOValue
     , errMsg403NotDelegating
@@ -2155,7 +2156,8 @@ spec = describe "NEW_SHELLEY_TRANSACTIONS" $ do
                   ]
         forM_ scenarios $ \(title, foreignWallet) -> it title $ \ctx -> runResourceT $ do
             wa <- fixtureWallet ctx
-            wb <- foreignWallet ctx
+            wb <- fixtureWallet ctx
+            wF <- foreignWallet ctx
 
             -- Construct tx
             payload <- mkTxPayload ctx wb $ minUTxOValue (_mainEra ctx)
@@ -2172,12 +2174,11 @@ spec = describe "NEW_SHELLEY_TRANSACTIONS" $ do
             signedTx <- getFromResponse Prelude.id <$>
                 request @ApiSerialisedTransaction ctx signEndpoint Default toSign
 
-            -- Submit tx (from wb)
-            submittedTx <- submitTxWithWid ctx wb signedTx
+            -- Submit tx (from wF)
+            submittedTx <- submitTxWithWid ctx wF signedTx
             verify submittedTx
                 [ expectResponseCode HTTP.status403
-                , expectErrorMessage "Transaction cannot be submitted as it is foreign to\
-                                     \ this wallet. Please submit it from the wallet it belongs to."
+                , expectErrorMessage errMsg403ForeignTransaction
                 ]
 
     describe "TRANS_NEW_SUBMIT_02 - Submitting on foreign Byron wallet is forbidden" $ do
diff --git a/lib/core/src/Cardano/Wallet/Api/Server.hs b/lib/core/src/Cardano/Wallet/Api/Server.hs
index b86e14fc3c3..46915034856 100644
--- a/lib/core/src/Cardano/Wallet/Api/Server.hs
+++ b/lib/core/src/Cardano/Wallet/Api/Server.hs
@@ -2349,6 +2349,8 @@ submitTransaction
 submitTransaction ctx apiw@(ApiT wid) apitx@(ApiSerialisedTransaction (ApiT sealedTx)) = do
     ttl <- liftIO $ W.getTxExpiry ti Nothing
     apiDecoded <- decodeTransaction @_ @s @k @n ctx apiw apitx
+    when (isForeign apiDecoded) $
+        liftHandler $ throwE ErrSubmitTransactionForeignWallet
     let ourOuts = getOurOuts apiDecoded
     let ourInps = getOurInps apiDecoded
 
@@ -2370,7 +2372,6 @@ submitTransaction ctx apiw@(ApiT wid) apitx@(ApiSerialisedTransaction (ApiT seal
     nl = ctx ^. networkLayer
     ti = timeInterpreter nl
 
-
     isOutOurs (WalletOutput _) = True
     isOutOurs _ = False
     toTxOut (WalletOutput (ApiWalletOutput (ApiT addr, _) (Quantity amt) (ApiT tmap) _)) =
@@ -2399,6 +2400,20 @@ submitTransaction ctx apiw@(ApiT wid) apitx@(ApiSerialisedTransaction (ApiT seal
         let generalInps = apiDecodedTx ^. #inputs
         in map toTxInp $ filter isInpOurs generalInps
 
+    isForeign apiDecodedTx =
+        let generalInps = apiDecodedTx ^. #inputs
+            generalWdrls = apiDecodedTx ^. #withdrawals
+            generalOuts = apiDecodedTx ^. #outputs
+            isInpForeign (WalletInput _) = False
+            isInpForeign _ = True
+            isOutForeign (WalletOutput _) = False
+            isOutForeign _ = True
+            isWdrlForeign (ApiWithdrawalGeneral _ _ context) = context == External
+        in
+            all isInpForeign generalInps &&
+            all isOutForeign generalOuts &&
+            all isWdrlForeign generalWdrls
+
 joinStakePool
     :: forall ctx s n k.
         ( ctx ~ ApiLayer s k