Asset freeze definition

Asset freeze is the term used in United Kingdom, European Union and United Nations instruments for what US practice calls blocking. The two limbs matter equally: you may not deal with what the target already has, and you may not make anything new available to them, directly or indirectly.

The words “owned, held or controlled” and “indirectly” are what give the freeze reach beyond the named party. A company that is not itself listed can be caught because a listed person controls it, and a payment to an unlisted intermediary can breach the second limb if the benefit reaches the listed person at the end of the chain.

Where this term is used

What are nominee directors and nominee shareholders? — A nominee is formally recorded as a company's director or shareholder but acts on an undisclosed party's instructions. The register names the nominee; the decisions belong to someone else.
What is ownership threshold structuring? — Arranging shareholdings so that designated parties own less than the percentage at which ownership is automatically attributed, while control of the entity stays where it was.
What are third-country bank accounts and how are they used? — Holding accounts in a jurisdiction unconnected to the restricted party, the goods or the contract, so that payments reach and leave the restricted economy without ever appearing to touch it.

Related terms

Blocking — Freezing property and interests in property of a designated person that come within a jurisdiction, so it cannot be transferred, paid, withdrawn or otherwise dealt in.
The 50 percent rule — OFAC guidance that any entity owned fifty per cent or more, directly or indirectly, by one or more blocked persons is itself blocked, whether or not it is named.
Beneficial owner — The natural person who ultimately owns or controls an entity, or on whose behalf a transaction is conducted, regardless of whose name appears on the register.

Where this term is used

Related terms

Sources