Exam CGSS Topic 5 Question 4 Discussion

Actual exam question for ACAMS's CGSS exam
Question #: 4
Topic #: 5

In accordance with the Office of Foreign Assets Control 50% Rule, which entities would be considered sanctioned even if not listed on the Specially Designated National (SDN) List? (Select Three.)

A. A company with an SDN holding a 98% stake in it B. A company with an SDN holding a 35% stake in it, and another SDN holding a 15% stake in it C. A company with an SDN holding a 20% stake in it, and another SDN holding a 25% stake in it D. A company with an SDN holding a 12% stake in it, another SDN holding an 18% stake in it, and another SDN holding a 28% stake in it E. A company with an SDN holding a 45% stake in it, and another SDN holding a 3% stake in it F. A company with 10 SDNs, each holding a 4% stake in it

Suggested Answer: A,B,D Vote an answer

Under the OFAC 50% Rule, an entity must be treated as a Specially Designated National (SDN) - even if not named on the SDN List - when:
One SDN owns 50% or more of the entity, OR
Multiple SDNs collectively own 50% or more of the entity (ownership must be aggregated).
Applying this rule:
A: 98% ownership by a single SDN → Blocked (exceeds 50%).
B: 35% + 15% = 50% aggregate ownership by two SDNs → Blocked (meets 50%).
C: 20% + 25% = 45%, which does not meet the threshold → Not blocked.
D: 12% + 18% + 28% = 58% aggregate ownership by SDNs → Blocked (exceeds 50%).
E: 45% + 3% = 48%, which is below 50% → Not blocked.
F: 10 SDNs × 4% = 40%, which is below 50% → Not blocked.
Thus, only A, B, and D meet or exceed the 50% aggregate ownership requirement defined by OFAC.
Reference:
OFAC "50 Percent Rule" Guidance: Entities owned 50% or more, directly or indirectly, singly or in the aggregate by one or more SDNs, are considered blocked.
OFAC Ownership and Control Interpretive Guidance detailing aggregation of SDN ownership percentages.

by Erica at Mar 09, 2026, 07:05 AM

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