Many of our clients have heard of the OFAC 50 Percent Rule — but aren’t entirely sure what it really means or how it affects their business. The rule is both significant and far-reaching, with implications that extend well beyond the surface. In this post, we’ll break down what the rule actually is, explain why it requires deeper due diligence, and outline practical steps your organisation can take to identify and mitigate hidden sanctions risks.
The Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury enforces economic and trade sanctions based on U.S. foreign policy and national security goals. Among its most critical and far-reaching regulations is its 50 Percent Rule, introduced in 2014.
Any entity that is owned 50 percent or more, directly or indirectly, by one or more blocked (i.e. sanctioned) persons is itself considered a blocked person—even if it is not explicitly listed on OFAC’s Specially Designated Nationals (SDN) List.
This rule ensures that sanctioned individuals cannot circumvent restrictions through affiliated businesses or layered corporate structures.
Note: While OFAC’s rule does not formally apply to “control,” OFAC may still designate entities under broader sanctions programmes based on influence or other factors.
Indirect ownership is defined as a situation where the blocked person holds ownership through other entities that are themselves 50% or more owned by the blocked person.
This means firms must examine all levels of the ownership chain, which may involve:
Failure to identify a blocked entity—even unintentionally—can lead to:
At Themis, we understand the complexities of complying with the OFAC 50 Percent Rule and the critical importance of getting it right. That’s why we’ve built our platform to help organisations meet these compliance obligations with confidence and efficiency.
A key element of this is the enhancement of Themis Search through the integration of Dow Jones’ specialised OFAC 50 Percent data into Themis’ comprehensive financial crime dataset. This integration further strengthens our ability to support clients in navigating complex regulatory landscapes and in meeting compliance challenges. In today’s increasingly intricate financial environment, standardising due diligence and forging partnerships that unite best-in-class data sources are essential to combating financial crime effectively.
Themis provides clients with action able insights and automated tools to manage sanctions risks effectively:
OFAC’s 50 Percent Rule underscores the evolving complexity of global sanctions regimes. As enforcement intensifies and ownership structures become more opaque, the cost of inadequate due diligence rises. Themis empowers clients with the tools and intelligence to stay compliant, proactive, and protected. Don’t let hidden ownership structures become hidden liabilities.
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Many clients have heard of the OFAC 50 Percent Rule but aren’t sure how it affects them. It’s far-reaching, with hidden sanctions risks. This post explains the rule, why it demands deeper due diligence, and steps to identify and mitigate those risks.
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