On 5 September 2024, EU updated its FAQs on provision of services, asset freeze and prohibition to provide funds or economic resources
Asset freeze and prohibition to provide funds or economic resources
FAQ 8 discusses the EU's approach to ownership. The EU Commission indicated that the entity is considered as owned by designated persons even if none of them on their own have more than 50% of shares. For example, if one sanctioned person owns 30% of the entity and another designated person owns 25%, it is considered to be designated as sanctioned persons own more than 50% of that entity and "one should take into account the aggregated ownership".
FAQ 42 provides a definition of a farewell and how it can be used to allow a non-designated EU entity to continue doing their business irrespective of EU asset freezing measures imposed on a designated person benefiting from that company before.
EU Commission recognises the need for some companies to continue operating and states that a company's business can continue, as long as they prevent funds and economic resources from being directly or indirectly available to the listed person, entity or body.
More EU guidance on firewalls is available in EU Commission's Guidance note – Implementation of Firewalls in cases of EU entities owned or controlled by a designated person or entity.
Provision of services
FAQ 37 discusses the EU services prohibition. EU Commission reminds that EU nationals are prohibited from providing certain services even if they are employees of EU operators providing the prohibited services to their Russian subsidiary. The only exception from this rule is for EU nationals who are residents of Russia and were so before 24 February 202
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.