The EU has expanded sanctions against Russia due to the "rule of 50%"

EU following the USbegan to apply the “50% rule”, which implies the summation of the shares of sanctioned persons in the company to classify the latter as objects of sanctions.Potentially, this could expand the scope of restrictions against Russia View of the building of the European Commission

The European Commission provided a clarification according to which a company, the majority of whose shares (shares) are jointly owned by two or more sanctioned persons, even if none of them owns more than 50%, is considered to be under sanctions. In the US, the sanctions “50% rule” has been in effect since 2008, but in the European Union it has not generally been applied.

“You have to look at the total ownership of the company. If one designated entity owns 30% of the company and another sanctioned entity 25%, then that entity should be considered jointly owned and controlled by the sanctioned entities. Accordingly, transactions with such a company may be considered an indirect provision of assets and economic resources to persons on the sanctions list,” the clarification says.

In general, restrictive EU measures prohibit European companies and banks from any economic activity with a sanctioned person and businesses controlled by him.

Significance for Russia

Since the end of February, the EU has included in the sanctions list, which implies a freezing of assets in Europe, about 20 major Russian businessmen, including Gennady Timchenko (forbes estimated his fortune as of March 25 at $17.6 billion), Alexei Mordashov ($17.4 billion), Andrey Melnichenko ($15.1 billion), Alisher Usmanov ($13.2 billion), Mikhail Fridman ($12.3 billion), as well as Roman Abramovich, Alexei Kuzmichev, Petr Aven, Alexander Ponomarenko, Dmitry Pumpyansky and others. Some of them jointly owned companies , so that the business potentially fell under the new EU rule. For example, until mid-March, Fridman, Aven, Khan and Kuzmichev owned a total of about 83% in the holding company ABH Holdings SA (controls almost all the shares of Alfa Bank), but none of them had more than 33%.