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573. A person designated under E.O. 13661 or E.O. 13662, or blocked by operation of law pursuant to OFAC’s 50 percent rule on April 6, 2018 as a result of such a designation holds an ownership interest of less than fifty percent in a U.S. company. In such a scenario, how does the U.S. company comply with U.S. sanctions?


If one or more blocked persons in such a scenario does not hold a 50 percent or more interest in the U.S. company, the U.S. company is not itself blocked, but the U.S. company must block all property and interests in property in which the blocked person has an interest. See OFAC’s 50 percent rule guidance. Depending on the nature of the property blocked by the U.S. company, the U.S. company may be able to continue operating, but any payments, dividends, or disbursement of profits to the blocked person would be prohibited and, to the extent such payments are required, must be placed in a blocked account at a U.S. financial institution. If a U.S. company is in such a scenario, the U.S. company is encouraged to contact OFAC to determine whether a license or other authorization is required.

Date Released
April 6, 2018