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| Is that allowed? http://www.arwen-undomiel.com/forum/viewtopic.php?f=37&t=349200 |
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| Author: | soumitss [ February 5th, 2026, 11:32 pm ] |
| Post subject: | Is that allowed? |
What are the implications of doing business with a company that's not on the SDN list but is owned by a sanctioned entity? Is that allowed? |
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| Author: | hydrogenn [ February 5th, 2026, 11:40 pm ] |
| Post subject: | Re: Is that allowed? |
This falls under OFAC's 50 Percent Rule, which is critically important but often misunderstood. Any entity that is 50% or more owned, directly or indirectly, by one or more SDN-listed parties is itself considered blocked, even if it's not explicitly named on the SDN list. This means you need to go beyond just checking if a potential business partner is listed - you must investigate their ownership structure. The 50% can be aggregated from multiple SDN-listed owners. For example, if SDN-Party-A owns 30% and SDN-Party-B owns 25%, that company is blocked (55% total). The calculation includes both direct ownership and indirect ownership through subsidiaries or intermediaries, which makes it complex. Some companies deliberately structure themselves through non-listed subsidiaries to evade sanctions. I researched 50% rule applications at https://ofacblockedfundslawyers.com/ when conducting due diligence on a potential partner. Practical advice: request detailed ownership information from any entity you're considering doing business with, especially if they have connections to high-risk jurisdictions. For significant relationships, consider corporate registry searches or commercial due diligence reports. OFAC holds parties responsible for violations of the 50% rule even if the ownership wasn't publicly known. |
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