DENMARK Law and Practice Contributed by: Rikke Sonne, Jakob Skov Bundgaard and Tilde Nielsen Weidinger, Accura
applicable Council Regulations, which are binding on all EU member states, including Denmark. It should be noted that many EU sanctions originate from UN Security Council resolutions. These resolu - tions are given legal effect in Denmark through EU reg - ulations that implement them. Alternatively, UN reso - lutions may be implemented in Danish law through a royal order issued after consultation with the Foreign Policy Committee. 7.2 Scope of Designation The EU restrictive measures contain provisions stating that entities that are “owned or controlled” by desig - nated persons or entities may themselves be subject to restrictions. When addressing whether a legal per - son or entity is owned by another person or entity, the following criteria for “ownership” apply: • the “owning” person or entity possesses 50% or more of the proprietary rights of the other person or entity; or • the “owning” person or entity has a majority inter - est in the other person or entity (see Regulation 2580/2001, Article 1) – if this criterion is satisfied, it is considered that the legal person or entity is owned by another person or entity. In the scenario where two or more designated “own - ing” persons or entities collectively own 50% or more, the entity will be considered as owned by designated persons by aggregation. For example, if one desig - nated entity owns 35% of the entity and another des - ignated person owns 20% of the entity, the entity will be considered as owned by designated persons. When addressing whether a legal person or entity is controlled by a designated person or entity, the anal - ysis is more complex, as control may exist without ownership. The European Commission has provided guidance on this matter, and the following factors may indicate control, if a sanctioned entity: • holds the right, or is able in practice, to appoint or dismiss a majority of the members of that legal person’s or entity’s administrative, management or supervisory body;
• has, purely through exercising its own voting rights, secured the appointment of a majority of the mem - bers of that body who were in office during the current and the preceding financial year; • single-handedly controls a majority of the voting rights held by shareholders or members of the legal person or entity, by virtue of an arrangement made with other shareholders or members; • is entitled, under an agreement with the legal person or entity or under a provision of its consti - tutional documents (such as its memorandum or articles of association), to exert a dominant influ - ence over it, provided the law governing that legal person or entity allows it to be bound by such an agreement or provision; • is able, in practice, to exert the dominant influence described above without formally holding the right to do so; • is entitled to use all or part of that legal person’s or entity’s assets; • directs the legal person’s or entity’s business as a single economic unit and prepares consolidated accounts in respect of it; or • bears joint and several responsibilities for that legal person’s or entity’s financial liabilities or has guar - anteed them. If any of the mentioned criteria is present, this could indicate that the entity might be controlled by a designated person or entity. However, this must be assessed on a case-by-case basis, including whether the contrary can be established. It is worth noting that the presumption of control can be rebutted. Where ownership or control as described is present, funds or economic resources made available to a non- listed entity owned or controlled by a listed person or entity will generally be treated as indirectly made available to that listed person or entity. 7.3 Circumvention 7.3.1 Prohibiting Provisions The violations of EU sanctions are prohibited in Den - mark. This also includes the circumvention of sanc - tions regulations. EU sanctions regimes generally include provisions that prohibit any form of activities that circumvent the sanctions regulations. The pro - hibition on circumvention is essential to the enforce -
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