EU Issues Sanctions Guidance for Ownership, Control Risks
The EU this week posted new guidance about ownership and control to its Sanctions Helpdesk website, describing the rules that apply to entities owned or controlled by a sanctioned party, how the EU defines ownership and control, how EU companies can rebut the presumption of ownership or control, and more. The guidance also recommended that EU companies take several due diligence steps to make sure their customers, suppliers and counterparties aren't controlled by a sanctioned entity or person, including by collecting information to verify their ownership structure, checking any possible "red flags" and asking questions to "resolve any remaining concerns."
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EU companies "do not need to start from a position of being suspicious of everything a new potential counterpart tells you, as most business counterparts are exactly who and what they claim to be," the guidance said. "Your task is to identify those that are not. You need to recognise when a counterpart or an activity poses a higher sanctions risk and undertake more enquiries in those situations."