In April, the US Treasury Office of Foreign Assets Control (OFAC), which administers US sanctions, updated its Specially Designated Nationals (SDN) list to include Russian nationals who allegedly interfered with the 2016 US election.
The key problem this raises for corporates across the globe, and not just in the US, is how to identify which companies are controlled by SDNs.
An SDN is typically an individual acting on behalf of a sanctioned country. SDNs can also be individuals involved in cross-border activities such as terrorism and drug trafficking. US persons are prohibited from dealing with anyone listed as an SDN.
Under US and EU rules, a company is ‘sanctioned by extension’ if an explicitly sanctioned person or entity owns 50% or more of it, either directly or indirectly. The impact extends across the globe, affecting anyone who does business with a US company.
In the case of the Russian individuals targeted by the latest round of US sanctions in April, Bureau van Dijk was able to identify that these new SDNs are the 50% owners of more than 1,300 corporate holdings. About 10% of these are private companies are registered in the US.
Bureau van Dijk has developed a tool within its Orbis database that generates snapshot lists of companies that are sanctioned by extension. We also monitor changes in ownership, which you can subscribe to alerts for.
For example, using Orbis we've managed to track the ownership of a US registered company to one of the newly appointed SDNs (see image).
No other resource provides this level of data or detail for this type of research challenge.
Request a free trial of Orbis, or see our OFAC and the 50% rule podcast.