Russian-Owned Companies in EU focus

In July, approximately 45,000 companies within the European Union had significant Russian ownership, with over 40 percent stakes held by Russian entities or individuals with dual citizenship. The Czech Republic reported the highest concentration, with 12,400 such companies, according to data from Moody’s cited by the Polish daily Rzeczpospolita. This surge in Russian-linked businesses comes as the EU implements stricter financial transaction reporting requirements for Russian citizens, part of the twelfth package of sanctions aimed at curbing Russia's economic activities. The European Commission has mandated that credit and financial institutions in the EU adhere to new reporting standards effective July 2023. These measures are designed to enhance the monitoring of potential sanctions violations and to trace income sources linked to Russia. EU member states are responsible for analyzing the reported data to identify any breaches or attempts to circumvent the sanctions. In the Czech Republic, the Ministry of Industry and Trade (MIT) is actively investigating transactions that may pose security risks. Banks are now required to report any transfers exceeding 100,000 euros (approximately 2.5 million CZK) to authorities if they involve companies with significant Russian ownership. This regulation applies to all types of financial transfers leaving the EU jurisdiction. Additionally, the Foreign Relations Advisers Working Group (RELEX) has revised the criteria for determining ownership of companies with Russian capital. The threshold for control has shifted from over half of the capital to more than 40 percent, aligning with similar regulations from the U.S. Treasury Department. Observers suggest these changes reflect the EU's response to owners adapting to previous sanctions.