OFAC FAQ (Current) # 399 - 50% Rule

Date issued: Aug. 13 2014

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TURBOFAC Commentary (1459 words)

Notes:

An entity owned by multiple blocked persons (hereinafter the “Subject Entity”) is a person blocked pursuant to the 50% rule, even if the ownership is by persons blocked pursuant to unrelated sanctioned programs. The open question addressed in this comment concerns the determination of the programs pursuant to which the Subject Entity is blocked, which would normally have an impact on the exemptions and licenses for which the Subject Entity is eligible.

This represents a somewhat gray area of the law insofar as we are unaware of OFAC directly addressing the central question with definitive guidance. That question is under what circumstances will minority ownership by a person blocked pursuant to a certain sanctions program result in a Subject Entity in which it has a minority stake being considered blocked pursuant to the same sanctions programs as the minority owner.

First, consider the text of the...