By · · last updated 2026-08-08

The OFAC 50% Rule, Explained

An entity owned 50% or more by blocked persons is itself blocked — even if never listed. How the rule works, how it fails, and how to screen for it.

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OFAC's 50-percent rule is the compliance detail that catches teams who screen names but not ownership.

The rule

An entity that is owned 50% or more, individually or in the aggregate, by one or more blocked persons is itself treated as blocked — even if the entity never appears on the SDN list.

How it fails

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Name-only screening passes the shell company: no match on the entity's name. The blocked owner sits one level up in the ownership chain. The 50% aggregate test is the layer that catches it.

What to screen

For corporate counterparties: gather ownership data, screen each owner against the SDN list, apply the aggregate threshold. This is where sanctions screening meets KYB.

The practical shape

Wallet screening (947 addresses) covers the payment path; name screening (19,218 names) covers counterparties; ownership screening covers the 50% gap. Three layers, one compliance posture.

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