General Note on the Calculation of "Indirect" Ownership Interests for the Purposes of the "50% Rule" (System Ed. Note)

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TURBOFAC Commentary (1293 words)

General Note on the Calculation of "Indirect" Ownership Interests for the Purposes of the "50% Rule" (System Ed. Note)

The way that "indirect ownership interests" of blocked persons are calculated for the purposes of OFAC's "50% rule" is extremely idiosyncratic. OFAC has provided useful guidance for "indirect ownership" calculations in FAQ # 401, a part of which is reproduced below. For context, we first draw attention to the particular way in which OFAC's notion of "indirect ownership" differs from the concept in other contexts.

Using the term "Covered Person" to refer to SDNs and "Subject Entity" to refer to entities to which one is applying the 50% rule in order to see if the entity is blocked, if (blocked) Covered Person A owns 10% of Subject Entity B, and Subject Entity B owns 80% of Subject Entity C, what is the indirect ownership interest held...