Beneficial Ownership and Sanctions
The OFAC 50-percent rule explained — and why ownership screening is part of the stack.
Overview
OFAC's 50-percent rule means an entity owned 50% or more, individually or in aggregate, by one or more blocked persons is itself blocked — even if the entity never appears on the SDN list.
How it works
- Identify the owners of the counterparty entity
- Check each owner against the SDN list
- If blocked owners hold 50%+ (individually or combined), the entity is blocked
The screening gap
Name-only screening misses ownership structures. Entity-level screening with ownership lookup closes it — this is where sanctions screening and KYB meet.
The agent implication
An agent paying a corporate counterparty needs the ownership screen, not just the name. The 50-percent rule applies to agent-initiated payments like any other.