Frequently Asked Questions

398. Does OFAC consider entities over which one or more blocked persons exercise control, but of which they do not own 50 percent or more in the aggregate, to be blocked pursuant to OFAC’s 50 Percent Rule?

Answer

No.  OFAC’s 50 Percent Rule speaks only to ownership and not to control.  An entity that is controlled (but not owned 50 percent or more) by one or more blocked persons is not considered automatically blocked pursuant to OFAC’s 50 Percent Rule.  OFAC may, however, designate the entity under an available sanctions criteria or otherwise identify the entity as blocked property if determined to be controlled by one or more designated persons and add the entity to OFAC’s List of Specially Designated Nationals and Blocked Persons (SDN List). 

OFAC urges caution when considering a transaction with an entity that is not a blocked person (a non-blocked entity) in which one or more blocked persons have a significant ownership interest that is less than 50 percent or which one or more blocked persons may control by means other than a majority ownership interest.  Such non-blocked entities may become the subject of future designations or enforcement actions by OFAC.  In addition, persons should be cautious in dealing with such a non-blocked entity to ensure that they are not, for example, dealing with a blocked person representing the non-blocked entity, such as entering into a contract that is signed by a blocked person.  Please also note that some sanctions programs (e.g., the Crimea region of Ukraine, Cuba, Iran, North Korea, Syria, and Venezuela) block certain persons without an OFAC designation; these blockings are based on criteria separate from OFAC’s 50 Percent Rule, such as the blocking of persons that meet the definition of a blocked government. 

Date Released
August 11, 2020