Affiliation means a relationship between two or more entities, except for CDQ groups, in which one directly or indirectly owns or controls a 10 percent or greater interest in, or otherwise controls, another, or a third entity directly or indirectly owns or controls a 10 percent or greater interest in, or otherwise controls, both. For the purpose of this definition, the following terms are further defined:
(1) Entity. An entity may be an individual, corporation, association, partnership, joint-stock company, trust, or any other type of legal entity, except for a CDQ group, any receiver, trustee in bankruptcy or similar official or liquidating agent, or any organized group of persons whether incorporated or not, that holds direct or indirect interest in:
(i) Quota share (QS), processor quota share (PQS), individual fishing quota (IFQ), or individual processing quota (IPQ); or,
(ii) For purposes of the economic data report (EDR), a vessel or processing plant operating in CR fisheries.
(2) Indirect interest. An indirect interest is one that passes through one or more intermediate entities. An entity's percentage of indirect interest in a second entity is equal to the entity's percentage of direct interest in an intermediate entity multiplied by the intermediate entity's direct or indirect interest in the second entity.
(3) Controls a 10 percent or greater interest. An entity controls a 10 percent or greater interest in a second entity if the first entity:
(i) Controls a 10 percent ownership share of the second entity, or
(ii) Controls 10 percent or more of the voting stock of the second entity.
(4) Otherwise controls.
(i) A PQS or IPQ holder otherwise controls QS or IFQ, or a QS or IPQ holder, if it has:
(A) The right to direct, or does direct, the business of the entity which holds the QS or IFQ;
(B) The right in the ordinary course of business to limit the actions of or replace, or does limit or replace, the chief executive officer, a majority of the board of directors, any general partner or any person serving in a management capacity of the entity which holds the QS or IFQ;
(C) The right to direct, or does direct, the transfer of QS or IFQ;
(D) The right to restrict, or does restrict, the day-to-day business activities and management policies of the entity holding the QS or IFQ through loan covenants;
(E) The right to derive, or does derive, either directly, or through a minority shareholder or partner, and in favor of a PQS or IPQ holder, a significantly disproportionate amount of the economic benefit from the holding of QS or IFQ;
(F) The right to control, or does control, the management of, or to be a controlling factor in, the entity holding QS or IFQ;
(G) The right to cause, or does cause, the sale of QS or IFQ;
(H) Absorbs all of the costs and normal business risks associated with ownership and operation of the entity holding QS or IFQ; and
(I) Has the ability through any other means whatsoever to control the entity that holds QS or IFQ.
(ii) Other factors that may be indica of control include, but are not limited to the following:
(A) If a PQS or IPQ holder or employee takes the leading role in establishing an entity that will hold QS or IFQ;
(B) If a PQS or IPQ holder has the right to preclude the holder of QS or IFQ from engaging in other business activities;
(C) If a PQS or IPQ holder and QS or IFQ holder use the same law firm, accounting firm, etc.;
(D) If a PQS or IPQ holder and QS or IFQ holder share the same office space, phones, administrative support, etc.;
(E) If a PQS or IPQ holder absorbs considerable costs and normal business risks associated with ownership and operation of the QS or IFQ holdings;
(F) If a PQS or IPQ holder provides the start up capital for the QS or IFQ holder on less than an arm's-length basis;
(G) If a PQS or IPQ holder has the general right to inspect the books and records of the QS or IFQ holder; and
(H) If the PQS or IPQ holder and QS or IFQ holder use the same insurance agent, law firm, accounting firm, or broker of any PQS or IPQ holder with whom the QS or IFQ holder has entered into a mortgage, long-term or exclusive sales or marketing agreement, unsecured loan agreement, or management agreement.
50 CFR § 680.2
In addition to the definitions in the Magnuson-Stevens Act, in 50 CFR part 600, and 679.2 of this chapter, the terms used in this part have the following meanings: