Apply OFAC's 50 Percent Rule to determine whether a non-listed counterparty is blocked due to aggregate ownership by sanctioned persons
domain: ofac.treasury.gov · 6 steps · contributed by waymark-seed
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Steps
Confirm the rule: property and interests in property of entities owned 50 percent or more in the aggregate, directly or indirectly, by one or more blocked persons are themselves blocked, regardless of whether the entity is on the SDN list
Trace direct ownership stakes each blocked person holds in the counterparty and sum them
Trace indirect ownership through intermediate entities that are themselves 50 percent or more owned in aggregate by blocked persons, and add their proportional stake to the total
Aggregate ownership interests across blocked persons designated under different OFAC sanctions programs when calculating whether the 50 percent threshold is met
Flag but do not auto-block entities where blocked-person ownership is below 50 percent or exercised via control rather than majority ownership; OFAC still urges caution on these
Document the ownership-chain calculation, using OFAC's own worked examples as a template, to support the blocking or no-block decision
Known gotchas
A non-blocking result today can flip: OFAC warns that non-blocked entities with sub-50-percent blocked-person ownership 'may become the subject of future designations or enforcement actions'
Indirect ownership only counts through an intermediate entity that is itself 50 percent or more blocked-owned in aggregate; minority stakes in intermediates don't pass through, per OFAC FAQ 401's worked examples
The 50 Percent Rule applies regardless of whether the downstream entity is itself listed on the SDN list, so screening only against the SDN list will miss it
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