OFAC 50 Percent Rule Calculator

How the 50 Percent Rule Adds Up Ownership

An entity is treated as blocked when blocked persons own 50 percent or more of it in total. That total counts the stakes they hold directly and the stakes held through companies they own 50 percent or more of.

Under the OFAC Revised Guidance published on August 13, 2014, any entity owned in the aggregate, directly or indirectly, 50 percent or more by one or more blocked persons is considered a blocked person. This status applies whether or not the entity appears by name on the Office of Foreign Assets Control (OFAC) Specially Designated Nationals and Blocked Persons List (SDN List). A U.S. person generally may not engage in transactions with that entity unless OFAC authorizes the transaction.

To determine whether an entity reaches this threshold, the calculator follows three specific aggregation rules:

1. Under OFAC FAQ 399, ownership stakes of all blocked persons are aggregated across the entity. Stakes owned by persons blocked under different OFAC sanctions programs are added together. If Blocked Person X holds 25 percent and Blocked Person Y holds 25 percent of Entity A, Entity A is blocked.
2. Under OFAC FAQ 401, indirect ownership means a blocked person owns shares of an entity through intermediate entities that are themselves 50 percent or more owned in the aggregate by blocked persons. If an intermediate entity is 50 percent or more owned by blocked persons, that intermediate entity is treated as blocked.
3. When an intermediate entity is treated as blocked, its entire ownership percentage in the downstream company counts toward the target's total. If an intermediate entity is not blocked, none of its downstream ownership passes through under the rule. For example, Blocked Person X owns 30 percent of Entity A, and Entity A owns 100 percent of Entity B. Entity B is not blocked by the rule alone, because Entity A is not blocked.

These aggregation mechanics match the official examples published by OFAC:

• In OFAC FAQ 401 Example 3, Blocked Person X owns 50 percent of Entity A and 10 percent of Entity B. Entity A owns 40 percent of Entity B. Entity A is blocked because X owns 50 percent of it. Because Entity A is blocked, its 40 percent stake in Entity B counts in full, which combines with X's direct 10 percent stake to place Entity B at 50 percent blocked ownership. Entity B is treated as blocked.
• In OFAC FAQ 401 Example 4, Blocked Person X owns 50 percent of Entity A and 25 percent of Entity B. Entity A and Entity B each own 25 percent of Entity C. Entity A is blocked and passes its full 25 percent stake. Entity B is only 25 percent owned by X, so Entity B is not blocked and passes 0 percent. Entity C reaches 25 percent blocked ownership and is not blocked by the 50 percent rule alone.
• In OFAC FAQ 401 Example 5, Blocked Person X owns 25 percent of Entity A and 25 percent of Entity B. Entities A and B each own 50 percent of Entity C. Because neither intermediate entity is 50 percent or more owned by X, neither Entity A nor Entity B is blocked, and Entity C shows 0 percent blocked ownership from the rule.

In our internal analysis at Cuban Insights, we checked the calculator against all five worked examples in OFAC FAQ 401 and the aggregation example in FAQ 399. It returns OFAC's stated answer for each one.

How to Use the Calculator

Enter your counterparty structure directly into the worksheet to evaluate direct and intermediate ownership:

1. Type the target entity's name into the input field labelled "Company you are checking".
2. Select any of the buttons labelled "Load OFAC FAQ 401 example:" 1, 2, 3, 4, or 5 to populate the worksheet with OFAC's published test cases. On first load, the chart holds Example 3.
3. Enter direct owners under the section "Owners of the company", filling in "Owner name", "% held", and selecting the appropriate option under "This owner is". The three available choices are "A blocked person (SDN-listed or blocked)", "A company (enter who owns it)", or "Not blocked". Use the "Remove" button on any row to delete that owner.
4. If an owner is a corporate entity, select "A company (enter who owns it)" to reveal the nested section "Who owns this company?". Check the box labelled "It is itself on the SDN list" if the intermediate company is directly designated. Otherwise, add its owners by filling in "Owner of this company" and "% held", then choose "Yes, blocked person" or "No" under "Blocked?". Use the "Add owner of this company" button to record additional shareholders at this level.
5. Select "Add owner" to insert additional direct owners into the main corporate tier.
6. Review the live calculation output. The result says whether the entity is treated as blocked or is not blocked by the 50 Percent Rule alone. It shows the direct blocked stakes, the stakes held through blocked companies and the 50% threshold. A line for each counted stake follows, plus a note for any intermediate company with blocked owners whose stake did not pass through.
7. Use the "Copy worksheet" button to copy the text summary, or select "Print / save as PDF" to generate a permanent compliance document. You can reset the worksheet at any time using the "Clear" button.

The calculator runs entirely in your web browser, and none of the entered data is transmitted across an external network. The tool acts as a planning aid and does not constitute legal advice. It cannot independently verify corporate ownership percentages or confirm whether an individual owner is an SDN.

When a Company Below 50 Percent Needs Care

An entity that remains below the 50 percent blocked ownership threshold can still present compliance exposure.

Under OFAC FAQ 398, the 50 percent rule speaks only to ownership, not control. An entity that is controlled but not owned 50 percent or more by blocked persons is not automatically blocked by operation of law. However, OFAC retains authority to designate such an entity under applicable sanctions authorities. OFAC explicitly urges caution when dealing with non-blocked entities in which blocked persons hold a significant ownership stake below 50 percent, or where blocked persons exercise control through other means.

Under OFAC FAQ 400, U.S. persons are prohibited from entering into contracts signed by a blocked individual. That holds even when the signer acts for an entity that is not blocked. When your inputs establish a blocked ownership percentage between 0 and 50 percent, the calculator displays a caution reminding users of these FAQ 398 and FAQ 400 limitations.

Cuba Rules the Calculator Does Not Apply

The 50 percent rule calculator calculates property interests under standard ownership tests, but it does not account for independent country-level criteria.

Under OFAC FAQ 398, certain sanctions programs block persons without a specific OFAC designation based on separate regulatory criteria. These programs include Cuba, Iran, North Korea, Syria, Venezuela, and the Crimea region of Ukraine. For Cuba, certain persons are blocked without an OFAC designation on criteria separate from the 50 percent rule.

Screen every counterparty and owner against the SDN list using the OFAC Cuba sanctions checker. The SDN list includes Cuba designations under the Cuban Assets Control Regulations (CACR) program tag CUBA, as well as designations under Executive Order 14404 of May 1, 2026, tagged as CUBA-EO14404. Additional screening must be conducted against State Department Cuba lists using the Cuba Restricted List checker and the Cuba prohibited hotels checker.

When Blocked Ownership Falls Below 50 Percent

Under OFAC FAQ 402, if blocked persons divest their holdings so that their aggregate ownership falls below 50 percent, the entity is no longer automatically blocked under the 50 percent rule.

The divestment transaction must occur entirely outside U.S. jurisdiction and cannot involve U.S. persons. Property that was properly blocked by a U.S. person while the entity remained 50 percent or more owned stays blocked. OFAC does not recognize unlicensed transfers of previously blocked property.

Records to Keep

Under 31 CFR §501.601, full records of every transaction subject to sanctions provisions must be kept available for examination for at least 10 years.

The printable output generated by the tool is titled the "OFAC 50 Percent Rule Worksheet". This document provides a formal compliance record that includes the date of calculation, a "Prepared by" line, the target company name, the individual owner tiers, and the final percentage determination. Save the printed worksheet or the copied text output directly into your compliance file, and work out the report due date with the OFAC blocked property report deadline tool.