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What is the OFAC 50% Rule?

OFAC’s rule that property and interests in property of an entity owned 50% or more in the aggregate, directly or indirectly, by one or more blocked persons are considered blocked.

Last Reviewed: 2026-09-19Plain-English reference · not legal advice

Plain-English Summary

An entity can be blocked under OFAC’s 50 Percent Rule even when the entity’s own name does not appear on the SDN List. The rule is based on ownership by blocked persons, including aggregate and qualifying indirect ownership. It should not be generalized to every sanctions designation, export-control list, or situation where a blocked person merely exercises control without the required ownership.

Why This Matters

Name-only screening can miss an unlisted entity whose ownership makes its property and interests in property blocked. OFAC therefore expects organizations to account for relevant ownership information when assessing counterparties. The analysis can require looking through intermediate entities and aggregating ownership held by blocked persons.

Explanation Depth

Concept Explanation

A company does not have to be named on the SDN List to be blocked. If blocked owners together own at least half of it, OFAC treats the company’s property as blocked too. The rule is about ownership, not simply influence or a similar company name.

When You'll See This in SecurePoint

SecurePoint ownership traversal currently defaults to shadow mode. Ownership results can be surfaced and recorded for analyst review, but they do not change risk or automatically block by default. Any organization configured for enforced ownership behavior is deployment-specific and should be verified rather than assumed.

What You Should Do Next

Identify direct and indirect owners, determine whether any owners are blocked persons, and aggregate qualifying ownership according to OFAC’s guidance. If blocked persons own 50% or more in the aggregate, treat the entity as blocked for OFAC purposes unless an applicable authorization or other rule changes the result. Escalate uncertain ownership chains for documented review.

What Can Go Wrong

Do not treat control, board influence, or a minority ownership interest as automatically satisfying the 50 Percent Rule. Do not apply the OFAC ownership rule to a BIS list merely because the party is restricted under another regime. Also do not evaluate each blocked owner in isolation when their interests must be aggregated.

Sources & References

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Legal Disclaimer

This glossary entry is provided for educational and informational purposes only and does not constitute legal advice. SecurePoint USA is not a law firm, does not provide legal representation, and this system is not a replacement for qualified sanctions or export control counsel. While we strive to present accurate, up-to-date summaries of regulatory terms, regulations are complex and subject to change. Always consult with your institution's legal team or a certified compliance professional before making legal or operational determinations.