The OFAC 50 per cent Rule and the new BIS 50 per cent Rule are similar but distinct.

The OFAC 50 Per cent Rule and the new BIS 50 Per cent Rule are identical in concept but differ in:

• Scope,
• Enforcement context, and
• Regulatory implications.

Here's a breakdown of the key differences and similarities:

OFAC 50 Per cent Rule (U.S. Department of the Treasury).

Purpose: Prevent sanctioned individuals/entities from evading sanctions via ownership structures.

Key Features:

• Applies to entities owned 50% or more, directly or indirectly, in aggregate by one or more persons on the Specially Designated Nationals (SDN) List.
• Such entities are automatically considered blocked, even if not explicitly listed.
• Control is not a factor; only ownership matters.
• Applies across all OFAC sanctions programs (e.g., Iran, North Korea, terrorism, cybercrime).
• Businesses must conduct due diligence to identify ownership links to SDNs.
• OFAC does not publish a list of entities blocked under the 50% rule; compliance is the responsibility of the private sector.

BIS 50 Per cent Rule (U.S. Department of Commerce – Bureau of Industry and Security).

Purpose: Close loopholes in export controls by extending restrictions to affiliates of listed entities.

Key Features:

• Applies to entities owned 50% or more, directly or indirectly, in aggregate by one or more entities on the Entity List or Military End-User (MEU) List.
• These entities are automatically subject to the same export restrictions as listed entities, even if not named.
• Introduced via an Interim Final Rule effective September 29, 2025.
• Aligns with OFAC’s rule but applies to export control regulations under the Export Administration Regulations (EAR).
• Introduces a new “Red Flag” for minority ownership or other ties (e.g., shared board members), requiring enhanced due diligence.
• Exporters must affirmatively determine ownership before proceeding with transactions.
• Violations are subject to strict liability.

Key Differences:

References:

[1] ofacblockedfundslawyers.com https://ofacblockedfundslawyers.com/ofac-rule-fifty-percent/

[2] National Law Review https://natlawreview.com/article/us-bureau-industry-and-security-amends-export-administration-regulations-add-50