OFAC Cross-Program Addition of General Licenses for US Government Official Business and 50 Percent Rule Interpretive Update

Mechanism

OFAC promulgated this final rule effective 21 December 2022 as the second of two companion rulemakings published together (the first being FR Doc 2022-27639, which standardised NGO and agricultural/medical humanitarian GLs). FR Doc 2022-27564 addressed two structurally distinct but administratively paired items:

1. General Licenses for US Government Official Business

Added a standardised general license across all 30 amended CFR parts authorising transactions ordinarily incident to the official business of the United States government. Prior to this rulemaking, programs varied in whether they explicitly licensed USG diplomatic, consular, and operational activity. The rule also added — or updated — GLs for official business of certain designated international organisations and entities, covering bodies such as the United Nations and affiliated humanitarian coordination mechanisms. These additions eliminate the need for case-by-case specific licensing of routine government diplomatic or programmatic activities within sanctioned-country perimeters.

The 30 CFR parts amended span virtually the entire OFAC sanctions library:

• Financial crime / narcotics: Parts 510 (North Korea), 597 (Foreign Narcotics Kingpin), 591

(Transnational Criminal Organizations), 555 (Narcotics Trafficking)

• Bilateral country sanctions: Parts 525 (Cuba), 560/561 (Iran), 536 (Western Balkans),

539 (Belarus), 541 (Burma/Myanmar), 542 (Central African Republic), 544 (DRC), 546 (Ethiopia), 547 (Côte d'Ivoire), 548 (Iraq), 549 (Lebanon), 551 (Libya), 552 (Mali), 562 (South Sudan), 569 (Nicaragua), 576 (Somalia), 579 (Sudan), 582 (Syria), 584 (Venezuela), 585 (Zimbabwe)

• Thematic/cross-cutting: Parts 558 (Rough Diamonds), 583 (Foreign Terrorist Organizations),

594 (Global Terrorism / SDGT), 596 (WMD Proliferators), 598 (GLOMAG — Global Magnitsky)

2. 50 Percent Rule Interpretive Update

OFAC added or updated the 50 Percent Rule interpretive provision in each amended CFR part. The rule codifies at the regulatory level the longstanding OFAC guidance that an entity in which one or more blocked persons own, in the aggregate, a direct or indirect interest of 50 percent or more is itself treated as blocked — regardless of whether that entity is separately named on the SDN or other OFAC lists. The update ensures this foundational principle appears consistently across the entire CFR program library rather than only in some programs, closing potential interpretive gaps where a program's regulations had been silent.

The rule also includes technical corrections to CFR cross-citations to comply with updated Federal Register publication requirements, with no substantive policy effect.

Downstream implications

• US government agencies, contractors, and entities conducting official diplomatic, consular,

development, or programmatic work in sanctioned jurisdictions no longer require case-by-case OFAC specific licenses for qualifying activities in any of the 30 amended programs.

• The codified 50 Percent Rule interpretive across all programs removes interpretive asymmetry

where compliance officers had to rely on informal OFAC guidance for programs that lacked the explicit regulatory text; the rule now provides clear regulatory grounding for blocking determinations involving indirectly owned entities.

• Financial institutions processing payments related to USG contracts or international-organisation

operations in sanctioned jurisdictions gain a consistent regulatory safe-harbour across all major OFAC programs.

• The companion rule (FR Doc 2022-27639, slug 2022-12-21-us-ofac-cross-program-humanitarian-general-licenses)

extended equivalent GL treatment to NGO transactions and agricultural/medical commodity provisions — together the two rules substantially rationalised OFAC's GL architecture.

Open questions

• Individual program regulations may still contain program-specific definitions that limit

which USG entities or activities qualify under the new standard GL language — operational compliance requires confirming alignment with each program's specific authorising EO or statute.

• The 50 Percent Rule codification does not alter OFAC's pre-existing administrative ability to

narrow or expand the rule via guidance — watch for program-specific FAQ updates that may create carve-outs or tighten the interpretive.