EU Russia Sanctions & the 50% Ownership/Control Rule — A Practical Guide for Dutch SMEs | MatchAudit Learn
EU Russia Sanctions & the 50% Ownership/Control Rule — A Practical Guide for Dutch SMEs
Learn how the EU 50% ownership rule and control test apply to Dutch SMEs under Sanctiewet 1977 and Wwft. Practical workflow: data to collect, how to aggregate ownership, evaluate control, and document decisions with MatchAudit.
If any sanctioned person/entity owns an aggregate ≥50% of your counterparty or exerts control (e.g., board power, veto, acting in concert), the counterparty is generally treated as sanctioned. In the Netherlands, this sits under Sanctiewet 1977 and intersects with Wwft (KYC/UBO). This guide shows how to operationalize ownership/control tests and document decisions with MatchAudit.
Not legal advice. Use this guide to structure your workflow; consult counsel for edge cases.
Why Dutch SMEs care right now
Indirect exposure: Your customer or supplier may be clean, but a sanctioned UBO behind it may not be.
Multi-regime pressure: Banks and partners often take a conservative view across EU, UK, US/OFAC, UN, CH/SECO, AU/DFAT, CA.
Audit expectations: Payment providers, marketplaces, and freight partners increasingly ask for audit-ready evidence.
Core concepts (plain English)
1) The 50% ownership rule
If one or more sanctioned persons/entities together hold ≥50% (directly or indirectly), treat the target as sanctioned. Aggregation matters:
Example: SDN A 30% + SDN B 25% ⇒ 55% aggregated ⇒ generally prohibited.
Look-through: 60% of a holdco that owns 60% of the target = 36% indirect (0.6 × 0.6).
2) The control test (even when <50%)
Control can exist below 50% via:
Board appointment/removal rights; golden shares; veto/negative control
Shareholder agreements; acting in concert; de-facto dominance through covenants
Nominees or proxies exerting influence for a sanctioned person
3) NL framework references
Sanctiewet 1977: Dutch law implementing international sanctions.
: KYC/UBO obligations; the data you collect powers the ownership/control test.
Contracts: reps/warranties, notification duties for ownership/control changes within 24–48h.
Channel partners: resellers/agents certify they’re not owned/controlled by sanctioned persons and won’t circumvent measures.
Logistics: watch trans-shipment via third countries; use end-use statements and destination screening.
Payments: anticipate bank KYC questions; attach your MatchAudit report + ownership memo.
FAQ (quick answers)
Is 49% always safe?
No. Control can still apply (veto rights, acting in concert). Evaluate control independently.
Do I aggregate only listed persons?
Yes—aggregate only sanctioned persons/entities. You still screen all owners to identify them.
What if a sanctioned person owns 25% of a parent that owns 80% of my counterparty?
Indirect % = 25% × 80% = 20%. Aggregate with other sanctioned holdings, then apply the control test.
Can I rely on a counterparty letter?
Take it, but verify with registries/filings and your own screening. Keep evidence in the file.
Glossary (fast definitions)
UBO: ultimate beneficial owner—natural person(s) with significant ownership/control.
Acting in concert: two or more persons coordinating to exercise control.
Negative control: rights that can block/shape decisions (veto).
Indirect ownership: stakes held via other entities down the chain.
Next steps
Start with Free (daily snapshots) to validate workflow.
Move to Pro + API for API access, monitoring workflows, and bulk automation.
Use a separate PEP or adverse-media process if your bank expects enhanced screening; MatchAudit does not provide PEP or adverse-media screening today.
