Controlled entity
(2) Controlled entity. Solely for purposes of this paragraph (b), a controlled entity means an entity that is separate in form from a foreign sovereign or that otherwise constitutes a separate juridical entity, provided that (i) The entity is wholly owned and controlled by one or more foreign sovereigns directly or indirectly through one or more controlled entities; (ii) The entity's net earnings are credited to its own account or to other accounts of one or more foreign sovereigns, with no portion of its income inuring to the benefit of any private person as defined in paragraph (b)(3) of this section; and (iii) The entity's assets vest in one or more foreign sovereigns upon dissolution. (3) Inurement to the benefit of private persons. Solely for purposes of this paragraph (b) (i) Income does not inure to the benefit of private persons if such persons (within the meaning of section 7701(a)(1)) are the intended beneficiaries of a governmental program carried on by a foreign sovereign, and the program activities constitute governmental functions under the regulations under section 892. (ii) Income is considered to inure to the benefit of private persons if such income benefits (A) Private persons through the use of a governmental entity as a conduit for personal investment; (B) Private persons through the use of a governmental entity to conduct a commercial business, such as a commercial banking business, that provides financial services to private persons; or (C) Private persons who divert such income from its intended use by exerting influence or control through means explicitly or implicitly approved of by the foreign sovereign.