2016 Letter From Treasury to Sen. Wyden re: 50 Percent Rule

Date issued: Dec. 13 2016

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TURBOFAC Commentary (247 words)

Notes:

1) Refer to the second-to-last paragraph in the Treasury letter (PDF file contains surrounding letters sent from the Senator).

There is little in the way of statements attributable to OFAC and/or Treasury that speak to the actual purpose of the 50% rule, which makes interpretation of the rule difficult at the margins. If, for example, the purpose of the 50% rule were that 50% ownership acts as a reasonable proxy for control, one might wonder whether a 50% ownership of voting interests triggers the 50% rule (even where there is no majority ownership by total shares). Here, in response to a question from the Senator erroneously presupposing that "U.S. persons are not permitted to do business with individuals or entities 50 percent or more owned or controlled, directly or indirectly, by an SDN," the former Treasury Secretary states...