"The 50 percent rule is how OFAC determines whether companies not appearing on the SDN list are considered blocked because they are owned by other companies or people who do appear on the SDN list.
Persons whose property and interest in property are blocked pursuant to an executive order or regulations that are administered by OFAC are considered to have an interest in all property of an entity in which such blocked persons own, whether that’s individually or in the aggregate, directly or indirectly, a 50 percent or greater interest. That means if person A owns 50 percent of company X, company X is also blocked even though company X does not appear on the SDN list. If company X is blocked and it owns 50 percent of company Y, company Y is also considered blocked, even if that entity doesn’t appear on the SDN list. Those entities that don’t appear on the OFAC SDN list are sometimes referred to as shadow blocked entities because they do not actually appear on the list, but are still considered blocked and U.S. persons are prohibited from transacting with them."