EU restrictive measures and structures with Russian links

Who the rules bind

EU restrictive measures bind everyone in the EU, every EU national wherever they are — employees included — and every company incorporated in the EU, EU subsidiaries of Russian groups among them. Two regulations matter most for structures: Council Regulation (EU) No 833/2014, which restricts services, trusts and deposits, and Council Regulation (EU) No 269/2014, which freezes the assets of listed persons. Both are referred to here as amended through 2026. The European Commission publishes its reading of them in answers to frequently asked questions.

The services ban: Article 5n

Article 5n prohibits providing, directly or indirectly, a list of business services to the Government of Russia or to legal persons, entities or bodies established in Russia. The list includes legal advisory services; accounting, auditing including statutory audit, bookkeeping and tax consulting; business and management consulting and public relations; architectural and engineering services; advertising and market research; and IT consultancy, with further categories added over time. Any other service to the Government of Russia needs prior authorisation.

The Commission’s FAQs of 22 January 2026 set out who is covered:

• “Established in Russia” means companies incorporated in Russia and the branches of Russian entities outside Russia, including in the EU. An EU company does not become established in Russia by being tax resident there.
• The ban does not apply to a company incorporated outside Russia — even one owned by Russian residents, or a subsidiary of a Russian company — provided the services are not for the benefit of a parent established in Russia.
• “Indirectly” closes the routes round it. Services to a non-Russian subsidiary that in fact benefit its Russian parent are prohibited, and so is outsourcing prohibited services to a Russian entity through a third party. Legal work to set up a new group structure for a Russian group is likely to be indirect provision.
• Services to natural persons in Russia are outside Article 5n, but other rules — the trust-services ban, the limits on deposits and the asset freeze — may still apply to them.

The exemptions are narrow and read restrictively — for example, what is strictly necessary to exercise the right of defence in proceedings in a member state. Other cases need an authorisation from a national competent authority.

Trust services: Article 5m

Article 5m prohibits registering a trust or similar legal arrangement, providing it with a registered office or a business or administrative address, or providing it with management services, where a settlor or a beneficiary is:

• a Russian national or a natural person residing in Russia;
• a legal person, entity or body established in Russia;
• an entity more than 50% owned, directly or indirectly, by such a person, or controlled by one; or
• anyone acting on behalf or at the direction of any of them.

Since 5 July 2022 it has also prohibited acting as, or arranging for another person to act as, trustee, nominee shareholder, director, secretary or in a similar position for such a trust. Whether an arrangement is similar to a trust is judged by its structure and function — a fiduciary bond, and legal ownership separated from beneficial ownership. The ban does not apply where the settlor or beneficiary is a national of an EU member state or holds a temporary or permanent residence permit in one; a person who holds Russian and another non-EU nationality is not exempt. A national authority may authorise some cases: arrangements that receive no assets from the Russian persons and distribute none to them, humanitarian and civil-society purposes, occupational pensions, insurance, employee share schemes, charities, amateur sports clubs, and funds for minors or vulnerable adults. In the Commission’s reading the prohibitions in effect require affected arrangements to be wound up, with the assets returned or distributed subject to those derogations, and assets due to a settlor or beneficiary whose assets are frozen must themselves be frozen.

Banks apply a separate rule. Article 5b bars them from accepting deposits of more than EUR 100,000 per bank from Russian nationals, residents of Russia and legal persons established there, with exemptions that include nationals of EU member states and holders of residence permits.

Asset freezes and the ownership-and-control test

Regulation 269/2014 freezes the funds and economic resources of the people and entities listed in its annex, and no funds or economic resources may be made available to them, directly or indirectly. The list changes often: a single listing on 12 October 2026 added 1,569 individuals and entities.

A freeze reaches beyond the names on the list. Under the EU Best Practices, updated by the Council on 3 July 2024, an entity counts as owned by designated persons when they hold 50% or more of its proprietary rights or a majority interest, and the holdings of different designated persons are added together. If one designated person holds 30% of a BVI company and another holds 25%, together they hold 55%, and the company is treated as subject to the freeze. Control is judged by indicators, even below that line, among them:

• a designated person being the largest shareholder;
• buy-back options in favour of a designated former owner;
• shares transferred shortly before or after a designation;
• new owners closely connected to the designated person, or paying an abnormal price;
• needlessly complex structures, such as trusts or shell companies, linked to a designated person;
• dominant influence exercised through front persons.

The Best Practices are non-binding guidance. The United Kingdom applies its own test — more than 50%, and in general without adding separate designated holdings together — so in the example above the UK result turns on control.

Anti-circumvention: Article 12

Article 12 of Regulation 833/2014 prohibits knowing and intentional participation in activities whose object or effect is to circumvent its prohibitions. The Commission repeats the point throughout its FAQs, for instance where a non-Russian subsidiary is used as a conduit. Using a structure to reach a result that a prohibition forbids is itself prohibited.

Cyprus service providers: 2023 and after

On 12 April 2023 the United States, acting in coordination with the United Kingdom, designated Cyprus-linked companies and individuals as part of a network that served a sanctioned person, and the United Kingdom designated a Cypriot accountant and a Cypriot lawyer as professional enablers.

Cyprus’s response built up over the following years. Administrative service providers in Cyprus were already licensed and supervised by CySEC, ICPAC and the Cyprus Bar Association. In January 2023 the Ministry of Finance had announced a national sanctions unit on the model of the United Kingdom’s; Cyprus accepted UK technical assistance on illicit finance in May 2023, and a UK project team began work on the unit in February 2024. After the ICIJ’s “Cyprus Confidential” investigation in November 2023 the President pledged an inquiry. In July 2025 Parliament passed a package of laws that created the National Sanctions Implementation Unit within the Ministry of Finance, under Law 150(I)/2025. The unit took over the functions of the earlier sanctions bodies: it issues licences, binding directives and guidance, traces and freezes assets, and fines those who withhold information. The same package made sanctions evasion a criminal offence, in line with Directive (EU) 2024/1226.

What this means in practice

• Every engagement is screened before work starts, and again when the lists change: the company, every owner and controller in the chain, the settlors and beneficiaries of any trust, and the people the work is for.
• Ownership and control are worked out, not assumed. The holdings of designated persons are added together against the 50% line, and the control indicators are checked even where no designated person holds a share.
• Work for a company established in Russia, for a branch of one, or for the benefit of a parent established in Russia falls under the services ban. An EU-based firm cannot provide those services without an authorisation.
• Trust services caught by Article 5m are not provided unless the exemption for EU nationals and residence-permit holders, or an authorisation, applies.
• If a person in a structure is designated, the funds and economic resources concerned are frozen, nothing is made available to them, and the competent authority — in Cyprus, the National Sanctions Implementation Unit — is informed as the regulations require.

Chrysos screens every engagement and does not act where EU restrictive measures prohibit it.