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Rule change makes more companies vulnerable to U.S. sanctions

WASHINGTON (Reuters) - Companies even partly owned by individuals sanctioned by the U.S. government could find themselves blacklisted as the result of a rule change announced on Wednesday by the Treasury Department.

Treasury, which is responsible for applying and enforcing U.S. sanctions, has had the power to blacklist any company in which a U.S.-sanctioned individual owned at least a 50 percent stake.

Under the new rule, companies could see their assets frozen and be prevented from doing business in the United States if the aggregate ownership stakes of all individuals sanctioned by the U.S. government reached the 50 percent threshold.

Douglas Jacobson, a lawyer in Washington who specializes in trade and sanctions, said the amendment "represents a significant change" that would force firms to re-evaluate which entities could be blocked under U.S. law.

Any company owned by at least two of the three U.S.-sanctioned Russian billionaires, Gennady Timchenko and Boris and Arkady Rotenberg, for example, could be blacklisted even if each stakeholder only had a 25 percent interest.

The United States added the three men, who are close to Russian President Vladimir Putin, to its sanctions list in March after Russia rushed to consolidate its annexation of Ukraine's Crimea region.

U.S. sanctions were expanded to include Russian banks and energy and defense companies in recent months, as part of an effort to punish Russia for what the United States and other Western nations view as its role in fueling a separatist rebellion in eastern Ukraine.

(Reporting by Anna Yukhananov; Editing by Paul Simao)

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