Nesting Doll Sanctions

'Nesting doll' sanctions evasion refers to the practice of designated entities controlling — but not formally owning — a series of non-designated intermediaries through which they conduct transactions. The name comes from the Russian matryoshka doll: each intermediary looks clean on the surface but is ultimately controlled by the designated entity.

How the 50 Percent Rule addresses this

OFAC's 50 Percent Rule looks through layers of ownership: if one or more SDNs collectively own 50% or more of an entity, that entity itself is blocked — even if no single SDN's ownership exceeds 50%. This catches the nesting doll pattern at the formal ownership level. For informal control without ownership, OFAC can separately designate the intermediary.