OFAC Beneficial Ownership Glossary Part 1
Core terms for identifying the people who ultimately own or control an entity that may be subject to OFAC sanctions.
TL;DR
TL;DR: Beneficial ownership refers to the natural person who ultimately owns or controls an entity, even when a different name appears on paper. Under the 50 Percent Rule, any entity 50% or more owned by a blocked person is itself treated as blocked.
What beneficial ownership means
Beneficial ownership looks past legal titles and shell structures to find the human being who really benefits from or controls an asset. A corporate counterpary may list one name as its owner while a sanctioned person quietly controls it behind layers of intermediaries. OFAC's 50 Percent Rule closes that gap: if one or more blocked persons together own 50% or more of an entity, that entity is also blocked, even if it is not itself named on the SDN List.
Why it matters for agent payments
An AI agent paying a corporate counterparty must look through to the beneficial owner, not just the billing name. Screening only the surface entity misses the blocked person behind it. A screening API such as sanctionsai.dev applies ownership logic alongside direct name matching, and its live data covers 19,218 SDN names across 16 jurisdictions, synced hourly.
Terms covered in Part 1
- Beneficial owner: the natural person who ultimately owns or controls an entity.
- 50 Percent Rule: aggregation of blocked ownership that also blocks the entity.
- Shell company: a legal entity with little or no real activity.