Sanctions 2025

EU Law and Practice Contributed by: Edward Borovikov, Laurens Engelen, Aurore Ancion and Semen Medvedkov, Dentons

According to the EU best practices for the effective implementation of restrictive measures, ownership is defined as the possession of more than 50% of the proprietary rights of an entity or having a majority interest in it. If this criterion is satisfied, it is considered that the legal person or entity is owned by another person or entity. To assess the control criterion, it is necessary to con - sider whether a person or entity has the right or power to appoint or remove a majority of the members of the administrative, management or supervisory body of such legal person or entity, and: • has been appointed solely as a result of the exercise of the voting rights of a majority of the members of the administrative, management or supervisory bodies of a legal person or entity who have held office during the present and previous financial year; • is controlling alone, pursuant to an agreement with other shareholders in or members of a legal person or entity, a majority of shareholders’ or members’ voting rights in that legal person or entity; • has the right to exercise a dominant influence over a legal person or entity, pursuant to an agreement entered into with that legal person or entity, or to a provision in its memorandum or articles of associa - tion, where the law governing that legal person or entity permits its being subject to such agreement or provision; • has the power to exercise the right to exercise a dominant influence referred to in the foregoing bul - let point, without being the holder of that right; • has the right to use all or part of the assets of a legal person or entity; • manages the business of a legal person or entity on a unified basis, while publishing consolidated accounts; and • shares jointly and severally the financial liabilities of a legal person or entity, or guarantees them. If any of these criteria are satisfied, it is considered that the legal person or entity is controlled by another person or entity, unless the contrary can be estab - lished on a case-by-case basis. It is crucial to point out that these criteria are not exhaustive; however, fulfilment of one of them will lead to a presumption

of control, which can be refuted on a case-by-case basis. 7.3 Circumvention 7.3.1 Prohibiting Provisions There are provisions in various sanctions regulations that specifically prohibit the circumvention of sanc - tions. These provisions are designed to prevent indi - viduals and entities from engaging in activities that would undermine the objectives of the sanctions. Anti- circumvention clauses are a critical component of the enforcement mechanism of sanctions programmes, ensuring that the restrictions cannot be easily evaded through indirect means or by exploiting legal or pro - cedural loopholes. Anti-circumvention provisions are aimed at prohibiting EU persons from knowingly and intentionally partici - pating in activities that circumvent the wider sanctions prohibitions and restrictions. As set out in 3.1 Significant Court Decisions or Legal Developments , circumvention had been generally defined as “activities in respect of which it appears, on the basis of objective factors, that, under cover of a formal appearance which enables them to avoid the constituent elements of an infringement of [...], none the less they have, as such or by reason of their pos - sible link to other activities, the aim or result, direct or indirect, of frustrating the prohibition” (judgment of the CJEU, 21 December 2011, C-72/11, Afrasiabi, EU:C:2011:874, paragraphs 60 and 62). In the 14th sanctions package targeting Russia, how - ever, the EU’s wording of the prohibition on circum - vention contained in Article 12 of Council Regulation (EU) 833/2014 has been expanded by adding the fol - lowing wording in italics. “It shall be prohibited to participate, knowingly and intentionally, in activities the object or effect of which is to circumvent prohibitions in this Regulation, includ - ing by participating in such activities without deliber - ately seeking that object or effect but being aware that the participation may have that object or effect and accepting that possibility”.

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