Summary: Part II draws on recent enforcement actions to illustrate how OFAC applies this approach in practice. It highlights the heightened expectations placed on professional service providers and explains why ownership screening alone can no longer be treated as a complete compliance exercise.
Link to Case Studies Case Studies
A consistent theme across OFAC’s recent enforcement actions is that professional service providers, investment managers, law firms, accountants, and fiduciaries, cannot hide behind procedural box-ticking. These parties sit close to the assets and the people who control them, and OFAC expects them to use that vantage point. Being “better positioned” to spot when a sanctioned person pulls the strings means bearing a corresponding duty to act on that knowledge. Obtaining a legal opinion that confirms no blocked person appears on the ownership register will not provide protection where the firm has access to information, or should have sought information, pointing to continued control or economic benefit by a sanctioned party.
Link to The IPI Partners Case The IPI Partners Case
The December 2025 settlement with IPI Partners, a private equity firm based in Chicago, offers perhaps the clearest illustration of what OFAC now expects from professional service providers.
IPI managed investments sourced from a sanctioned Russian oligarch over four years. The funds were channelled through a personal representative who acted as the oligarch’s proxy. IPI’s senior leadership knew the oligarch was the beneficial source and had reason to know he retained decision-making authority, notwithstanding his absence from the formal ownership structure.
The firm settled for apparent violations of Ukraine and Russia related sanctions. The critical finding was not a failure of ownership screening, any formal analysis would likely have cleared the counterparty, but that IPI possessed actual knowledge that the economic reality diverged from the legal structure and continued the relationship regardless.
Link to The GVA Capital Case The GVA Capital Case
In June 2025, OFAC imposed a $215,988,868 civil penalty on GVA Capital Ltd., a San Francisco-based venture capital firm. GVA managed investments for a sanctioned Russian oligarch between April 2018 and May 2021, channelling them through the oligarch’s nephew. The firm had prior knowledge of this proxy arrangement.
Unlike IPI, the GVA case involved not merely “reason to know”, but actual demonstrated knowledge of the blocked person’s sanctioned status. The penalty was further compounded by GVA’s failure to comply with an OFAC subpoena, transforming a compliance failure into a catastrophic enforcement event.
The case sends a pointed message: using family members as intermediaries will not insulate firms from liability. OFAC’s interpretation of “interest” implies that the nephew’s role as a go-between was legally irrelevant — the funds remained blocked property regardless of whose name was on the paperwork.
Several other enforcement and blocking actions further illustrate how OFAC applies this substance-over-form approach in practice:
- In June 2022, OFAC blocked Heritage Trust, a Delaware-based trust linked to designated Russian oligarch Suleiman Kerimov. Despite multiple layers of legal structures and front persons designed to sever the connection, OFAC determined that Kerimov maintained a continuing interest. The funds had originally entered the US financial system through entities Kerimov controlled before his designation, and subsequent reshuffling through shell companies did not change the underlying reality.
- Vladimir Potanin was designated in December 2022. Before that, he had been the ultimate beneficial owner of Sentimare Enterprises Limited, a Cyprus-based entity. He transferred ownership to four foundations in Liechtenstein, each naming one of his minor children as sole beneficiary. In June 2024, the US designated both Sentimare and the four foundations, claiming that Potanin still controlled them. Critically, OFAC had already reached that conclusion before the formal designations, it had blocked the foundations’ funds from moving through US financial institutions well in advance.
- In December 2025, OFAC settled with an individual who had served as fiduciary of a family trust belonging to a blocked person. According to the agency, the fiduciary should have reasonably recognised, based on the history of dealings, that the sanctioned party was using a proxy to retain effective control over trust decisions. The blocked person held no formal ownership stake, but OFAC concluded that a property interest persisted nonetheless.
Link to Why the 50 Percent Rule No Longer Saves You Why the 50 Percent Rule No Longer Saves You
The numbers tell their own story. In 2025, roughly 65% of OFAC enforcement actions were classified as “egregious” — a sharp increase from 42% the year before and well above the 0-35% range seen in earlier years. OFAC also issued three Penalty Notices in 2025, compared to just one in the 2020-2024 period. The agency is clearly prepared to impose severe consequences.
For more than ten years, the 50 Percent Rule served as a clear dividing line. If no sanctioned party held half or more of an entity, the entity was not considered blocked, and most practitioners treated the compliance analysis as complete at that point. Ownership screening was both the first and last step.
The March 2026 Advisory does not abolish that rule. OFAC acknowledges that a standard ownership analysis will still suffice in straightforward situations. But where the circumstances point to opaque structures, use of proxies, or other indicators that a sanctioned party remains involved, a mechanical ownership check will not suffice. A sanctioned person’s connection to property can take the form of control, economic benefit, decision-making power, or continued use, none of which require holding a single share.
The 50 Percent Rule, therefore, remains a necessary starting point, but it is no longer where the analysis ends. Where a sanctioned party has divested on paper, OFAC expects firms to conduct meaningful due diligence to satisfy themselves that the transfer was genuine and not merely a rearrangement of legal formalities. The red flags discussed above provide the framework for making that assessment.