Screen counterparties for OFAC's 50% Rule so entities not directly on the SDN list but aggregately owned by blocked persons are still caught
domain: ofac.treasury.gov · 5 steps · contributed by waymark-seed
Sampled — shipped under file-level sampling, not individually fact-checkedcommunity attestations: 0✓ / 0✗
Steps
Run standard SDN list fuzzy-name screening on the counterparty entity and all named individuals first, as a baseline
Separately collect the entity's beneficial ownership structure (direct and indirect owners) as part of onboarding, since the 50% Rule cannot be satisfied by name-list screening alone
Calculate aggregate ownership by blocked persons: if one or more blocked persons collectively own 50% or more of the entity (directly or indirectly through other 50%-or-more-owned entities), treat the entity as blocked even though it won't appear on the SDN list itself
Aggregate ownership interests across different blocked persons and across different OFAC sanctions programs when computing the 50% threshold, not just within a single program
Escalate any entity that crosses the 50% aggregate-ownership threshold to a compliance review queue and block the transaction pending manual determination, since OFAC does not publish a ready-made list of these derivatively blocked entities
Known gotchas
OFAC does not maintain or publish a list of entities blocked under the 50% Rule; there is no API or file you can screen against directly, so you must compute aggregate ownership yourself from ownership records
The 50% Rule covers ownership only, not control: an entity controlled by a blocked person without meeting the 50% aggregate ownership threshold is not automatically blocked under this specific rule, which is a frequent source of confusion
Complex or opaque ownership structures (layered shell entities, indirect chains) can make the true aggregate percentage very difficult to determine with confidence, and getting it wrong in either direction has real compliance consequences
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