RoutineMetric

OFAC 50% Sanctions Rule Calculator

Automate complex cascading mathematical attributions under OFAC, EU, and UK sanctions frameworks. Build multi-tiered corporate structures to evaluate whether indirect holdings result in an entity being deemed blocked under the aggregate 50% ownership rules.

Core Parameters

If an intermediate owns <50% of a downstream node, its contribution is treated as 0% for strict US OFAC compliance.

Corporate Entity Nodes

This node is a directly designated Specially Designated National (SDN) / Blocked Party.
Direct Owners / Shareholding
%
Aggregate Sanctioned: 60.0%
Direct Owners / Shareholding
%
Aggregate Sanctioned: 40.0%
Target
Direct Owners / Shareholding
%
%
Aggregate Sanctioned: 50.0%

Evaluation Summary

Target Entity Under Analysis

Target Operations Inc

50.0%Sanctioned
BLOCKED ENTITY

This entity is considered blocked under the 50% rules because its aggregate sanctioned ownership is ≥ 50%.

Compliance Attribution Trace

Analyzing ownership structure for "Target Operations Inc":
• Owner "Beta Holdings LLC" is BLOCKED (recursively ≥ 50% or SDN). Under OFAC cascading logic, its entire interest in the next tier is treated as 100% blocked. Contribution: 100.00% × 50.00% = 50.00%
• Owner "Gamma Investments" is NOT blocked (< 50%). Under strict OFAC rules, its interest contributes 0.00% to downstream aggregate blocked percentages.
Total calculated aggregate sanctioned ownership for "Target Operations Inc" = 50.00%.
👉 STATUS: BLOCKED. Aggregate sanctioned ownership (50.00%) is ≥ 50%. This entity's downstream interest is treated as 100% blocked.

This trace documents the cascading calculation logic for your regulatory audit files. If any intermediate holding node crosses 50%, its downstream direct shareholding is recursively amplified to 100% in compliance with legal precedents.

Understanding the OFAC 50% Sanctions Rule & Cascading Ownership

The Office of Foreign Assets Control (OFAC) of the US Department of the Treasury administers a crucial guideline known as the 50 Percent Rule. Under this rule, any entity that is owned 50% or more, either directly or indirectly, in the aggregate by one or more blocked persons is automatically considered blocked. It is irrelevant whether the entity itself appears on the Specially Designated Nationals (SDN) list. Similar regulatory standards apply across European Union (EU) and United Kingdom (HM Treasury) jurisdictions, though calculations can diverge on non-blocked intermediate holdings.

The Non-Intuitive Nature of Cascading Mathematics

Standard commercial mathematics is often misleading when assessing corporate ownership chains. Compliance professionals must utilize a recursive process called cascading attribution.

If a designated SDN owns 60% of Intermediate Holding A, Holding A is automatically deemed blocked because 60% is greater than or equal to 50%. Since Holding A is blocked, its interest in any subsidiary (e.g., 50% of Target Co) is treated as a 100% blocked interest, not a proportional interest. Therefore, Target Co inherits a 50% aggregate blocked interest, rendering Target Co blocked as well.

Conversely, if the SDN owns 40% of Holding A, Holding A is not blocked. Under strict OFAC rules, since Holding A itself is not blocked, its 50% ownership in Target Co passes down 0% blocked interest. However, under EU and UK guidance, or as a conservative US compliance posture, investigators may look at the proportional aggregate (40% × 50% = 20%) or review control-based parameters.

Key Factors for Sanctions Due Diligence

  • Aggregation: If SDN A owns 25% of a company and SDN B owns 25%, the company is blocked (25% + 25% = 50% total blocked ownership).
  • Direct vs. Indirect: Both direct equity relationships and intermediate shell entities must be meticulously mapped and calculated.
  • Control Standards: Beyond strict numerical percentages, if an SDN possesses executive control, power of attorney, or voting dominance, sanctions risks may be triggered regardless of minority equity stakes.