1. (a) An entity may demonstrate that the interest in the entity (75% for Citizens of the United States or 51% for entities meeting the Controlling Interest requirements) is owned by Citizens of the United States either by direct proof or through the fair inference method depending on the size of the entity.

2. (b) The “direct proof” method is used for closely held companies that have 30 or fewer stockholders. Under the direct proof method, the following information must be set forth in paragraph four of the Affidavit of U.S. Citizenship:

   1. (1) The identity of the holders of stock or other equitable interests;
   2. (2) The amount of stock or interest that each stockholder owns;
   3. (3) A representation as to the citizenship of the stockholder; and
   4. (4) If the stockholder is a corporation or other entity, the names and citizenship of officers, directors, stockholders, etc. must be set out in the Affidavit of U.S. Citizenship.

3. (c) The “fair inference method” is used by corporations whose stock is publicly traded or is held by more than 30 stockholders.

   1. (1) Use of the fair inference method for a publicly traded corporation requires that:

      1. (i) At least 95 percent of the stock (each class) of the corporation be held directly or beneficially by Persons having a U.S. address in order to infer at least 75 percent ownership by U.S. Citizens; and
      2. (ii) For determining the requisite percentage of stockholders with U.S. addresses, the corporation may rely on the methods outlined in § 356.7(e);

   2. (2) Use of the fair inference method for a non-publicly traded corporation with more than 30 stockholders requires that:

      1. (i) At least 95 percent of the stock (each class) of the corporation be held by Persons having a registered U.S. address in order to infer at least 75 percent ownership by U.S. Citizens; and
      2. (ii) Disclosure be made in the Affidavit of U.S. Citizenship of the names and citizenship of any stockholders who hold five percent or more of the corporation's stock (including all classes of stock, voting and non-voting), officers, and directors.
4. (d) If the owner of a Fishing Industry Vessel is consecutively owned by several “parent” corporations, the facts revealing the stock ownership of each entity must be set forth in the Affidavit of U.S. Citizenship.

5. (e) If the corporation is publicly traded, the corporation may employ any number or combination of methods to measure, monitor, determine, and affirm the required percentage of U.S. citizen share ownership for the primary corporation, including the following:

   1. (i) Use of the Depository Trust Company segregated account (or “SEG-100”) system;
   2. (ii) Monitoring Securities and Exchange Commission filings for 5 percent holders (Schedules 13D, 13G, Form 13F) and requesting citizenship information from those filers;
   3. (iii) Use of protective provisions in organizational documents in order to guard against and rectify the possibility of excess non-citizen share ownership;
   4. (iv) Communications with Non-Objecting Beneficial Owners (or “NOBOs”);
   5. (v) Geographic surveys of shareholder addresses provided by proxy service providers;
   6. (vi) Analysis of registered stockholders and use of dual stock certificates; and
   7. (vii) Alternative methods upon written approval of the Citizenship Approval Officer.

[65 FR 44877, July 19, 2000, as amended at 68 FR 5579, Feb. 4, 2003; 91 FR 33645, June 4, 2026]