OFAC's 50 Percent Rule: screen owners and record the review

A company check does not screen its owners

Start an ownership review with verified information about who owns the company. SanctionsKit can screen the company and each known owner against selected lists. It does not discover those owners from the company name. In New screening, choose organization for the company and use the sources or policy your review requires.

Screen each relevant owner as a separate person or business. For ongoing relationships, save the subjects in Counterparties. Keep their screening references with the ownership assessment and review candidates in Review queue. A company no-match cannot resolve a possible match for one of its owners.

Record the ownership work alongside the list results

A permitted policy editor can add Ownership and control under Required external checks in Screening policies. Include instructions, then select that policy for the screening. After the outside assessment is done, use Additional information in the case to record its status, evidence reference and reason.

Leave that task open while evidence or legal analysis is missing. SanctionsKit saves the record beside the screening result; it does not obtain ownership data or calculate the conclusion. Finish required checks and any independent approval before completing the case.

What does OFAC's 50 Percent Rule mean?

Under OFAC's rule, an entity can be blocked even when its name is absent from the SDN List. The test includes direct or indirect ownership of 50 percent or more in total by one or more blocked persons. OFAC's FAQs 399 and 401 explain how stakes and ownership chains are assessed.

The SDN name check answers a different question from the ownership investigation. Keep both results and the legal reasoning. A no-match for the company's name says nothing by itself about who owns it.

Example: add the relevant blocked owners' stakes

In this invented example, blocked person A owns 30 percent of Cedar Finch Components and blocked person B owns 20 percent. Together they own 50 percent. On those assumptions, the company is blocked under the stated OFAC rule even if its own name search returns no match.

First prove the facts behind the calculation: the owners' identities, relevant interests and date of the ownership evidence. An unverified spreadsheet or shared name cannot do that. OFAC's aggregation rule also covers relevant owners blocked under different programs. See FAQ 399 below.

Example: follow the ownership chain

Suppose blocked person A owns 50 percent of fictional Holding Company B, which owns 50 percent of Operating Company C. In OFAC's FAQ 401 example, B is blocked and its stake makes C blocked too. Multiplying the stakes to get 25 percent misses how that rule applies.

Real groups can have many layers and owners. Map the relevant links and keep evidence for each one. Use the authority's full guidance for the actual structure. This example explains why a name check is not enough; it is not a calculator for every ownership chain or country.

Keep control and the proposed activity in view

OFAC FAQ 398 distinguishes control from ownership under the 50 Percent Rule. Control alone does not automatically block a company under that rule. It may still matter under other restrictions or where a blocked person acts for the company.

A stake below 50 percent is therefore not a general permission to transact. The program, parties and activity can raise other questions. UK, EU and Swiss ownership-and-control rules must be assessed on their own terms, rather than treated as copies of OFAC's test.

Keep a record another analyst can check

Record the assessment date, the ownership links you verified and any branches you could not resolve. Unknown ownership is not zero ownership. The checklist below helps keep the evidence and remaining work visible without turning an incomplete chart into a finished conclusion.

• Identify the relevant jurisdiction, restriction, and activity being assessed.
• Collect reliable ownership evidence for the subject and relevant intermediate entities.
• Identify and screen the relevant owners using known facts, then resolve potential identity matches.
• Record the source and date for each ownership stake and any unresolved inconsistency.
• Apply the relevant aggregation and indirect-ownership rules with appropriate legal review.
• Record the conclusion, its scope, responsible reviewer, and triggers for reassessment.

Use the software for the part it performs

SanctionsKit checks submitted subjects against chosen sources and provides match evidence. It does not obtain ownership data, research a group structure, add stakes or decide who controls a company. A shared address or similar name does not prove an ownership link.

Describe the name result precisely, such as no potential match in the selected sources. Store the ownership conclusion with the separate investigation that supports it. The screening limitations guide explains other questions left outside the list check.

Frequently asked questions