Meaning and transaction use
OFAC FAQ 5 advises reviewing the relevant list or sanctions nexus and comparing identifiers when evaluating an alert. It recognises that some restrictions can affect unlisted targets. OFAC FAQ 401 explains that entities owned 50% or more in aggregate, directly or indirectly, by blocked persons are considered blocked under its rule. [S1] [S2]
Proposed review method: retain a dated transaction snapshot and the official source used for each check. Match legal names and identifiers, map relevant ownership and document alert resolution. Refer unresolved questions about jurisdiction, restrictions or authorisations to the responsible compliance function before execution.
Worked example
Illustrative OFAC direct-ownership example only. Assume a supplier is owned 30% by blocked person A, 25% by blocked person B and 45% by persons assumed unblocked for this calculation. Assume the stated ownership is verified and the OFAC rule is relevant to the transaction.
Scroll the table horizontally to view all columns.
| Owner category | Direct stake | Treatment in example |
|---|---|---|
| Blocked person A | 30% | Included |
| Blocked person B | 25% | Included |
| Other owners | 45% | Excluded from blocked total |
| Aggregate blocked ownership | 55% | 30% + 25% |
On those assumptions, 55% aggregate blocked ownership meets OFAC's 50 Percent Rule even if the supplier is absent from a name-search result. The responsible reviewer must determine transaction handling under the applicable rules, including any valid authorisation. This example is not clearance for any real party.
Proposed transaction review process
Identify the applicable framework
Document transaction parties, locations, payment route and the basis for assessing relevant regimes.
Check identities and ownership
Use reliable identifiers and ownership evidence to investigate potential matches and relevant interests.
Review the transaction restrictions
Assess the actual activity and any claimed licence, exemption or other authorisation with the responsible function.
Retain and refresh the decision
Record source dates, reviewer conclusions and changes requiring renewed checks before execution.
Evidence checklist
Transaction snapshot
Counterparties, intermediaries, goods, route and payment instructions.
Identity and ownership
Legal names, registration identifiers, ownership chart and supporting records.
Screening record
Sources, date, search parameters, alerts and evidence used to resolve matches.
Decision and authority
Reviewer determination, escalation record and verified scope of any relied-upon authorisation.
Decision framework
| Situation | Proposed action |
|---|---|
| A similar name generates an alert | Compare identifiers and supporting records through the approved match-review process. |
| Ownership evidence is incomplete | Keep the issue unresolved and obtain the information needed for the applicable analysis. |
| The route or counterparty changes | Refresh the affected checks before relying on the earlier decision. |
| A party supplies a claimed authorisation | Verify its authenticity, scope, conditions and validity with the responsible reviewers. |
Common errors to check
- Treating an absent name match as complete sanctions clearance.
- Ignoring relevant ownership because the immediate counterparty is unlisted.
- Reusing a decision after material transaction information changes.
- Relying on a licence claim without checking its scope and conditions.
Prepare the transaction for compliance review
Assemble the party, ownership, goods and payment-route evidence before a trade-finance discussion. The relevant institution and legal or compliance advisers must determine the applicable restrictions and execution requirements.
Discuss the transactionPrimary references and editorial scope
- OFAC FAQ 5: Evaluating sanctions-screening matches
Match assessment, identifiers and sanctions nexuses beyond a name-list result. Reference checked 17 September 2026. - OFAC FAQ 401: The 50 Percent Rule
Aggregate blocked ownership and indirect ownership treatment. Reference checked 17 September 2026.
General transaction education using US OFAC guidance checked on 17 September 2026. Other regimes have separate requirements. The example and workflow are illustrative; current rules and transaction facts must be reviewed at execution.
General business information. Obtain advice appropriate to the legal, tax, accounting and financing facts. No offer, lender commitment or transaction outcome is represented. All worked examples use expressly assumed figures. Editorial draft date: 17 September 2026.
