Ownership and control by a designated person

Map the entire chain

Start with direct owners and trace intermediate companies. Record interests, voting rights, jurisdiction and evidence dates for every link. Investigate agreements, management-appointment rights and other influence. An unclear link does not evidence zero ownership. Verify pre-transaction ownership changes and retain old evidence.

Interests are only part of the picture. Actual decision-making or powers to dispose of company assets may matter. Commission guidance addresses ownership and control, including firewalls. Guidance helps interpret specific rules; it does not itself grant exceptions or remove the need to assess current law and facts.

Do not transfer thresholds between regimes

An AML beneficial-ownership threshold is not an automatic sanctions exclusion. Control may arise otherwise, and the instrument may address indirect availability. Article 2 of Regulation 269/2014, for example, distinguishes asset freezing from making assets available to or for listed persons’ benefit. An unlisted subsidiary does not settle these questions.

OFAC FAQ 398 states that its 50 Percent Rule addresses ownership, not control alone: a controlled entity without aggregate ownership of at least 50 percent is not automatically blocked under that rule. Other legal grounds may still apply. This US conclusion cannot replace the EU test. One mathematical calculation for every regime is an incorrect shortcut.

Evidence facts and legal conclusions

Separate verified ownership data from sanctions-effect analysis. State the regime, operative provision and why it affects performance. Assign investigation when evidence is insufficient. Management approval cannot override a prohibition. Control-separation mechanisms or firewalls may require specific conditions and competent-authority procedures; a corporate declaration alone does not evidence them.

Ownership change before transfer

In a ready-made company sale, an old ownership extract may correctly describe the past yet be unsuitable for the transfer. Determine who acquires the company, finances the transaction and acts for the acquirer, and whether ownership changes actually affect control over assets. For an interim situation, compare contracts, registry evidence and agreed rights. A name or nominal-owner change does not explain actual control.

Where the client claims a sanctioned person no longer has influence, seek evidence of the claimed change. The purpose is not to disprove every hypothetical possibility but to resolve an identified link. Document which legal right or factual circumstance ended and what remains. Base sanctions decisions on the applicable regime, not merely a newly registered beneficial owner or a private declaration of independence.