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Understanding OFAC Sanctions: Key Points to Consider
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) regulates and enforces economic sanctions against countries, entities, and individuals deemed to be involved in activities that threaten national security or foreign policy interests. In this article, we will summarize key points from OFAC’s FAQ section related to sanctions and blocked persons.
Key Points to Keep in Mind
1. OFAC’s 50 Percent Rule
- Applies only to ownership, not control
- An entity controlled by one or more blocked persons but owned less than 50 percent is not automatically considered blocked
2. Blocked Entities
- Non-blocked entities with significant ownership interests held by blocked persons may become subject to future designations or enforcement actions by OFAC
3. Transactions Involving Blocked Persons
- U.S. persons should exercise caution when dealing with non-blocked entities involving blocked individuals, as transactions may still be prohibited even if the blocked person is acting on behalf of a non-blocked entity
4. Ownership Calculation
- For the purpose of calculating aggregate ownership, the interests of persons blocked under different OFAC sanctions programs are aggregated
5. Due Diligence
- U.S. persons should conduct due diligence to determine relevant ownership stakes when considering transactions with entities that may be involved or party to a transaction
6. Blocked Entities through Indirect Ownership
- An entity owned indirectly by one or more blocked persons is considered blocked if the blocked person owns, directly or indirectly, 50 percent or more of the entity
Additional Considerations
If you have any specific questions or need further clarification on these points, please let me know and I’ll do my best to assist you. It’s essential to stay informed about OFAC sanctions and regulations to ensure compliance with U.S. laws and avoid potential risks.