On August 13, OFAC broadened the scope of its sanctions programs by revising a rule on the ownership of entities by targeted individuals. Effective upon publication, the new guidance on the so-called "50 percent rule" states that an entity is subject to OFAC sanctions if any combination of sanctioned individuals collectively owns at least 50 percent of it. For instance, if Blocked Person X owns 25 percent of Entity A and Blocked Person Y owns 35 percent of Entity A, then Entity A is blocked, because Entity A is owned 50 percent or more in the aggregate by blocked persons. Previously, the 50 percent rule required a single sanctioned person to own 50 percent or more of an entity for it also to be subject to sanctions. The change brings US sanctions into alignment with EU sanctions, which also aggregate the interests of blocked persons.
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