OFAC 50 Percent Rule
An entity owned 50 percent or more, alone or in aggregate, by sanctioned persons is sanctioned too, without appearing on any list.
OFAC's 50 Percent Rule, set out in guidance of August 13, 2014, extends blocking to entities owned, directly or indirectly, 50 percent or more by one or more designated persons, adding up their stakes. The entity appears on no list: whoever deals with it must rebuild the ownership chain. The European Union applies a close test, ownership of more than 50 percent or control. For insurance, the rule turns screening into an investigation: a claim payee, a shipowner or a guaranteed debtor can be blocked while its own name is clean. It also explains why a restructuring of the capital can be enough to take a company out of a sanctions program, and hence why the date on which the shareholding is read matters as much as the name being checked.
Designated on April 6, 2018 together with Oleg Deripaska, En+ and Rusal were delisted on January 27, 2019, after their shareholder cut his stake in En+ to 44.95 percent, below the 50 percent threshold.
- OFAC, Revised Guidance on Entities Owned by Persons Whose Property and Interests in Property Are Blocked, 13 August 2014
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