OFAC changes the definition of “blocked person”

19.08.2014

The Department of the Treasury's Office of Foreign Assets Control (OFAC) revised guidance on companies that owned by the persons whose property rights or/and interest in property were blocked.

Amendments to the guidance are dealing with those companies, which are owned 50 percent or more in the aggregate by more than one blocked person. So called “blocked persons” are persons who are in the sanction lists of the US Treasury.

According to the new guidance, entity, 50% of which is owned by a blocked person or 50% or more in aggregate is owned by several blocked persons, shall gain the status of blocked person itself. Therefore, citizens and residents of USA shall refrain from any cooperation with such entity.

OFAC also published new “FAQs” with regards to the implementation of new guidance.

Source: http://www.treasury.gov/resource-center/sanctions/Documents/licensing_guidance.pdf, http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/ques_index.aspx#50_percent

Expert’s opinion

The number of objects to be sanctioned has been expanded. It makes sense to check whether there is a threat from it.

And if amongst the owners of your company are "blocked persons" - output them and / or divide the ownership.

The same goes for "politically exposed person" - they have long been under the scrutiny of financial monitoring.

Yaroslav Lomakin ( Managing Partner, Honest&Bright)