Q&As

Under the US Sanctions regime, if any entity is owned in the aggregate, directly or indirectly, 50% or more by one or more blocked persons, it is itself considered to be a blocked person. What are the equivalent rules regarding minority ownership and/or control which apply under the UK/EU regime?

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Published on LexisPSL on 14/10/2020

The following Corporate Crime Q&A provides comprehensive and up to date legal information covering:

  • Under the US Sanctions regime, if any entity is owned in the aggregate, directly or indirectly, 50% or more by one or more blocked persons, it is itself considered to be a blocked person. What are the equivalent rules regarding minority ownership and/or control which apply under the UK/EU regime?

Under the US Sanctions regime, if any entity is owned in the aggregate, directly or indirectly, 50% or more by one or more blocked persons, it is itself considered to be a blocked person. What are the equivalent rules regarding minority ownership and/or control which apply under the UK/EU regime?

The EU and, by extension, current UK regimes, require that an entity be ‘directly or indirectly controlled by or owned more than 50%’ by a designated sanctions target. In the UK, that means a person appearing on the consolidated lists here.

This wording derives from article 5 of Council Regulation (EC) No 2580/2001 of 27 December 2001 on specific restrictive measures directed against certain persons and entities with a view to combating terrorism, which requires that ‘all funds, other financial assets and economic resources belonging to, or owned or held by, a natural or legal person, group or entity included in the list […] shall be frozen’.

The EU Best Practice Guide provides further guidance on this terminology. It states:

‘Holding or controlling should be construed as comprising all situations where, without having a title of ownership, a designated person or entity is able lawfully to dispose of or transfer funds or economic resources he, she or it does not own, without any need for prior approval by the legal owner.’

At Part VIII ‘Ownership and control’, it further

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