Government Compliance
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Exclusions checks and FOIA-friendly audit trails for public sector.
Oct 19, 2025
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Compliance Intelligence
The OFAC 50% Rule
Decoded for Operations
How aggregated ownership screening protects high-security facilities from inadvertent violations—and how to implement it without slowing operations.
Updated Oct 20, 2025
•8 min read
Rule Postponed
Update
November 10, 2025
BIS Affiliates Rule Postponed: The 50% rule enforcement is paused for one year after the Trump–Xi summit. The pause is active now, but the rule is expected to snap back on November 10, 2026.
SecurePoint USA will implement full BIS 50% rule enforcement once the rule resumes. Until then, ownership screening continues with escalation workflows.
Affiliates Rule Paused
BIS stayed the Affiliates Rule for one year starting November 10, 2025 after the U.S.–China trade summit.
Return Expected 2026
Expect the Affiliates Rule to resume on November 10, 2026—use the pause to harden ownership workflows.
Ownership Screening Still Critical
Even during the pause, teams must resolve Red Flag 29 scenarios and keep Entity/MEU ownership look-through.
Previous Alert
Original BIS 50% Rule (Effective Sept 30)
BIS aligned with OFAC’s long-standing 50% rule, applying Entity List and MEU List restrictions to majority-owned foreign affiliates. A temporary general license (TGL) through November 28, 2025 provides time to map ownership, shore up controls, and seek required licenses before the rule restarts.
50% Aggregate Ownership
Any entity 50%+ owned (directly or indirectly) by Entity List or MEU List parties inherits their restrictions.
Temporary General License
A 60-day TGL (through Nov 28, 2025) lets exporters assess affiliates, gather attestations, and file licenses.
Red Flag 29
Exporters now have explicit duty to resolve ownership uncertainty; unresolved cases need a BIS license.
What is the 50% Rule?
OFAC's 50 Percent Rule treats any entity owned 50% or more by one or more Specially Designated Nationals as blocked—even if the entity isn't listed. BIS extends the same logic to Entity List and MEU List ownership (currently postponed until November 2026).
"If Person A (blocked) owns 30% and Person B (blocked) owns 25%, the entity is 55% blocked—and must be treated as sanctioned."
What Screening Must Capture
Three non-negotiable requirements for compliance
Aggregate Ownership Detection
Spot when multiple listed parties collectively cross 50%, even if no single owner holds a majority.
Deep Ownership Chains
Trace two-hop subsidiaries and shell structures that inherit Entity List or MEU status.
Immutable Audit Trail
Document every ownership lookup, escalation, and license decision to survive BIS audits.
SecurePoint USA
Intelligent Screening Architecture
Built for high-security environments where speed and accuracy must coexist.
Entity Enrichment
Cross-reference visitors and vendors with corporate registries to expose hidden parents instantly.
Intelligent Adjudication
Decision-makers see applied thresholds, diagrams, and evidence without leaving the queue.
Adaptive Policy Engine
Toggle Entity List vs. MEU rules by feature flag to simulate 2026 requirements while staying fast today.
Continuous Monitoring
Automated re-screening detects ownership changes for recurring contractors and vendors.
Operational Playbook
Four steps to bulletproof compliance
01
Entity Capture
Implement at check-in
Capture legal names, parent orgs, and beneficial owners at check-in or vendor onboarding.
02
Ownership Verification
Policy-based triggers
Request attestations or registry docs for high-risk affiliates; map at least two ownership layers.
03
Compliance Escalation
Automated workflow
Escalate unresolved Red Flag 29 cases for license evaluation or hold decisions.
04
Audit Documentation
One-click export
Generate export-ready packets showing ownership lookups, attestations, and BIS responses.
Why This Matters for Your Facility
Regulatory violations carry severe penalties: civil fines up to $330k per violation, criminal exposure, and facility access restrictions.
Reputational damage compounds: failed audits can trigger contract reviews, clearance investigations, and stakeholder scrutiny.
Operational efficiency matters: SecurePoint USA automates complex ownership analysis so throughput stays high even under BIS scrutiny.
Stay compliant. Stay fast. Stay secure.
Ready to Streamline Your Screening?
Schedule a demo to see how SecurePoint USA handles complex ownership structures in real time—without adding friction to your check-in process.
Pending Feature
Full enforcement resumes November 2026Compliance Playbook During the Pause
A 4–5 minute readiness checklist to stay audit-ready while the rule is postponed.
- Extend screening beyond CSL hits to include ownership graphs and parent lookups.
- Increase re-screen cadence; even 1% changes can push a subsidiary past the 50% threshold.
- Update SOPs and LMS modules to reflect the paused-but-returning Affiliates Rule.
- Refresh contract clauses with licensing/termination language ahead of 2026.
- Document escalation paths for Entity/MEU overlaps and Red Flag 29 resolutions.