diff --git a/src/main/java/org/folio/rest/core/exceptions/ErrorCodes.java b/src/main/java/org/folio/rest/core/exceptions/ErrorCodes.java
index 527424401..766e54128 100644
--- a/src/main/java/org/folio/rest/core/exceptions/ErrorCodes.java
+++ b/src/main/java/org/folio/rest/core/exceptions/ErrorCodes.java
@@ -111,7 +111,7 @@ public enum ErrorCodes {
   PO_LINE_HAS_RELATED_APPROVED_INVOICE_ERROR("poLineHasRelatedApprovedInvoice", "Composite POL related invoice lines contains lines which has status APPROVED for the current fiscal year, invoice line ids: %s"),
   MULTIPLE_FISCAL_YEARS("multipleFiscalYears", "Order line fund distributions have active budgets in multiple fiscal years."),
   INSTANCE_INVALID_PRODUCT_ID_ERROR("instanceInvalidProductIdError", "Instance connection could not be changed, the chosen instance contains an invalid Product ID."),
-  FUND_LOCATION_RESTRICTION_VIOLATION("fundLocationRestrictionViolation", "One of the funds is restricted to be used for one of the locations."),
+  FUND_LOCATION_RESTRICTION_VIOLATION("fundLocationRestrictionViolation", "One of the locations is restricted to be used by all funds."),
   ENCUMBRANCES_FOR_RE_ENCUMBER_NOT_FOUND("encumbrancesForReEncumberNotFound", "The encumbrances were correctly created during the rollover or have already been updated."),
   CLAIMING_CONFIG_INVALID("claimingConfigInvalid", "Claiming interval should be set and greater than 0 if claiming is active"),
   TEMPLATE_NAME_ALREADY_EXISTS("templateNameNotUnique", "Template name already exists");
diff --git a/src/main/java/org/folio/service/orders/flows/update/open/OpenCompositeOrderFlowValidator.java b/src/main/java/org/folio/service/orders/flows/update/open/OpenCompositeOrderFlowValidator.java
index 31a65b5a6..67668011a 100644
--- a/src/main/java/org/folio/service/orders/flows/update/open/OpenCompositeOrderFlowValidator.java
+++ b/src/main/java/org/folio/service/orders/flows/update/open/OpenCompositeOrderFlowValidator.java
@@ -4,7 +4,6 @@
 import static org.folio.rest.jaxrs.model.CompositePurchaseOrder.WorkflowStatus.PENDING;
 
 import java.util.ArrayList;
-import java.util.Collection;
 import java.util.List;
 import java.util.stream.Collectors;
 
@@ -129,24 +128,37 @@ public Future<Void> checkFundLocationRestrictions(List<CompositePoLine> poLines,
   }
 
   private Future<Void> validateLocationRestrictions(CompositePoLine poLine, List<Fund> funds) {
-    List<String> polLocationIds = poLine.getLocations().stream().map(Location::getLocationId).toList();
-    for (Fund fund : funds) {
-      if (Boolean.TRUE.equals(fund.getRestrictByLocations()) && !CollectionUtils.containsAll(fund.getLocationIds(), polLocationIds)) {
-        String poLineId = poLine.getId();
-        String fundId = fund.getId();
-        Collection<String> restrictedLocations = CollectionUtils.subtract(polLocationIds, fund.getLocationIds());
-        logger.error("For POL {} fund {} is restricted to be used for locations {}", poLineId, fundId, restrictedLocations);
-        List<Parameter> parameters = List.of(
-          new Parameter().withKey("poLineId").withValue(poLineId),
-          new Parameter().withKey("poLineNumber").withValue(poLine.getPoLineNumber()),
-          new Parameter().withKey("fundId").withValue(fundId),
-          new Parameter().withKey("fundCode").withValue(fund.getCode()),
-          new Parameter().withKey("restrictedLocations").withValue(restrictedLocations.toString())
-        );
-        return Future.failedFuture(new HttpException(422, ErrorCodes.FUND_LOCATION_RESTRICTION_VIOLATION, parameters));
-      }
+    // TODO: will be removed in scope of https://folio-org.atlassian.net/browse/MODORDERS-981
+    // as we'll obtain funds once before the processing and check on emptiness
+    if (CollectionUtils.isEmpty(funds)) {
+      logger.info("No funds found for PO Line {}, skipping fund-location restrictions check.", poLine.getId());
+      return Future.succeededFuture();
+    }
+
+    List<String> restrictedLocations = poLine.getLocations()
+      .stream()
+      .map(Location::getLocationId)
+      .filter(locId -> isRestrictedByAllFunds(funds, locId))
+      .toList();
+
+    if (restrictedLocations.isEmpty()) {
+      return Future.succeededFuture();
     }
-    return Future.succeededFuture();
+
+    String poLineId = poLine.getId();
+    logger.error("For POL {} locations {} are restricted to be used by all funds", poLineId, restrictedLocations);
+    List<Parameter> parameters = List.of(
+      new Parameter().withKey("poLineId").withValue(poLineId),
+      new Parameter().withKey("poLineNumber").withValue(poLine.getPoLineNumber()),
+      new Parameter().withKey("restrictedLocations").withValue(restrictedLocations.toString())
+    );
+    return Future.failedFuture(new HttpException(422, ErrorCodes.FUND_LOCATION_RESTRICTION_VIOLATION, parameters));
+  }
+
+  private boolean isRestrictedByAllFunds(List<Fund> funds, String locationId) {
+    return funds
+      .stream()
+      .allMatch(fund -> Boolean.TRUE.equals(fund.getRestrictByLocations()) && !fund.getLocationIds().contains(locationId));
   }
 
 }
diff --git a/src/test/java/org/folio/service/orders/flows/update/open/OpenCompositeOrderFlowValidatorTest.java b/src/test/java/org/folio/service/orders/flows/update/open/OpenCompositeOrderFlowValidatorTest.java
index 7a70fa1bd..57ffd2883 100644
--- a/src/test/java/org/folio/service/orders/flows/update/open/OpenCompositeOrderFlowValidatorTest.java
+++ b/src/test/java/org/folio/service/orders/flows/update/open/OpenCompositeOrderFlowValidatorTest.java
@@ -47,7 +47,7 @@ public void testCheckFundLocationRestrictions(VertxTestContext vertxTestContext)
 
     // given
     List<String> fundIds = List.of("F1", "F2");
-    List<String> locationIds = List.of("L1", "L2", "L3");
+    List<String> locationIds = List.of("L1", "L2", "L3", "L4", "L5", "L6");
     CompositePoLine poLine = new CompositePoLine()
       .withId("ID")
       .withPoLineNumber("number")
@@ -59,8 +59,8 @@ public void testCheckFundLocationRestrictions(VertxTestContext vertxTestContext)
       );
     Mockito.when(fundService.getFunds(fundIds, requestContext)).thenReturn(
       Future.succeededFuture(List.of(
-        new Fund().withId("F1").withCode("FC").withRestrictByLocations(true).withLocationIds(List.of("L1", "L2", "L3", "L4")),
-        new Fund().withId("F2").withCode("FC").withRestrictByLocations(true).withLocationIds(List.of("L2"))
+        new Fund().withId("F1").withCode("FC").withRestrictByLocations(true).withLocationIds(List.of("L1", "L2", "L3")),
+        new Fund().withId("F2").withCode("FC").withRestrictByLocations(true).withLocationIds(List.of("L2", "L3", "L4"))
       ))
     );
 
@@ -76,9 +76,7 @@ public void testCheckFundLocationRestrictions(VertxTestContext vertxTestContext)
         List<Parameter> expectedParameters = List.of(
           new Parameter().withKey("poLineId").withValue(poLine.getId()),
           new Parameter().withKey("poLineNumber").withValue(poLine.getPoLineNumber()),
-          new Parameter().withKey("fundId").withValue("F2"),
-          new Parameter().withKey("fundCode").withValue("FC"),
-          new Parameter().withKey("restrictedLocations").withValue("[L1, L3]")
+          new Parameter().withKey("restrictedLocations").withValue("[L5, L6]")
         );
         assertEquals(FUND_LOCATION_RESTRICTION_VIOLATION.toError().withParameters(expectedParameters), exception.getError());
         vertxTestContext.completeNow();