Discuss Acams CGSS Exam Topic 2 Question 16

ABC Industries is a legal entity owned by Entity X (30%), Entity Y (25%), and Entity Z (45%). Entity X is a Specially Designated National (SDN) under OFAC sanctions, and Entity Y is owned (80%) by an OFAC SDN. Is ABC Industries a blocked entity under OFAC sanctions?

AYes; ABC Industries is a blocked entity due to ownership by one OFAC SDN.

BNo; ABC Industries is not a blocked entity since aggregate OFAC SDNs' ownership is below 50%.

CNo; ABC Industries is not a blocked entity since it is not listed as an OFAC SDN.

DYes; ABC Industries is a blocked entity due to aggregate ownership (50%) by two OFAC SDNs.

Suggested Answer: D

OFAC's 50 Percent Rule requires aggregation of ownership by SDNs and entities owned 50% or more by SDNs.

Ownership breakdown:

* Entity X (SDN) 30%

* Entity Y (owned 80% by an SDN) treated as an SDN contributes 25%

* Total SDN-derived ownership = 30% + 25% = 55%

Since aggregate SDN ownership exceeds 50%, ABC Industries is automatically considered a blocked entity, even though Entity Z is not sanctioned.

Options B and C are incorrect because explicit listing is not required---ownership triggers blocking. Option A is incorrect because one SDN at 30% alone is insufficient, but combined ownership is.

OFAC 50 Percent Rule (aggregation principle).

Treatment of entities majority-owned by SDNs as SDNs for ownership calculations.

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16 comments · newest first

Essie 3 days ago

I think it's A. SDN ownership matters.

Lorean 8 days ago

B is safer. Just below the threshold.

Mari 13 days ago

A feels right. SDNs can't own anything.

Amos 18 days ago

D is tricky. Two SDNs add up to 50%.

Verona 23 days ago

C makes sense too. Not listed as SDN.

Quinn 29 days ago

I lean towards B. Total ownership is under 50%.

Rose 1 month ago

I think it's A. SDN ownership matters.

Mertie 1 month ago

A) is correct, ownership matters!

Johnathon 1 month ago

Not sure about this one, seems complicated.

Lauryn 2 months ago

Wait, isn't 50% the cutoff?

Evangelina 2 months ago

I think it's definitely a blocked entity.

Luke 2 months ago

ABC Industries has 55% ownership by OFAC SDNs.

Kayleigh 2 months ago

I’m a bit confused; I thought if you add up the ownership percentages, it could lead to a blocked status. So maybe option D could be correct?

Valentine 2 months ago

I’m leaning towards option B because I recall that just having one SDN doesn’t automatically mean the entity is blocked if the ownership is under that threshold.

Georgeanna 3 months ago

I think I saw a practice question similar to this where aggregate ownership was key. If the total ownership by SDNs is below 50%, then it might not be blocked, right?

Refugia 3 months ago

I remember studying that if an entity is owned more than 50% by SDNs, it can be blocked, but I'm not sure about the specifics here.

Acams CGSS Exam - Topic 2 Question 16 Discussion