This is so because, through its 50 percent ownership of Entity A, Blocked Person X is considered to indirectly own 25 percent of Entity C and through its 50 percent ownership of Entity B, Blocked Person X is considered to indirectly own another 25 percent of Entity C.
Entities A and B each own 25 percent of Entity C. Entity A's 50 percent ownership of Entity B in turn makes Entity B a blocked person.Įxample 2: Blocked Person X owns 50 percent of Entity A and 50 percent of Entity B. In addition, Blocked Person X's 50 percent ownership of Entity A makes Entity A a blocked person. This is so because Blocked Person X owns, indirectly, 50% of Entity B.
Please refer to the examples below for further guidance on determining whether an entity is blocked pursuant to OFAC's 50 Percent Rule.Įxample 1: Blocked Person X owns 50 percent of Entity A, and Entity A owns 50 percent of Entity B. Please see FAQ 116 for additional guidance on due diligence standards for intermediary parties to wire transfers. OFAC urges persons considering a potential transaction to conduct appropriate due diligence on entities that are party to or involved with the transaction or with which account relationships are maintained in order to determine relevant ownership stakes. "Indirectly," as used in OFAC's 50 Percent Rule, refers to one or more blocked persons' ownership of shares of an entity through another entity or entities that are 50 percent or more owned in the aggregate by the blocked person(s).