Wealthy Russians with Dutch interests avoiding EU sanctions: experts
Wealthy Russians with interests in the Netherlands are massively avoiding Western sanctions by reducing their stakes in companies so that they are no longer a majority shareholder, multiple experts in the field of sanctions told BNR. This makes it more complicated to determine whether sanctions should apply to the involved companies.
A firm is seen as someone's property when that person has a majority interest, lawyer Sebastian Bennink of BenninkAmar Advocaten said to the broadcaster. "But under European sanctions law, it must also be considered whether the sanctioned party can exercise control over the non-sanctioned company, even if that person no longer owns the company," he explained. "Funds and economic resources belonging to, owned by, or controlled by a sanctioned party must be frozen."
According to Bennink, this does not mean financial institutions are powerless against sanctioned Russians reducing their holdings in Dutch companies even before the invasion of Ukraine. Russian money could still be frozen if it can be proven that they have control over the company. The European Commission offers lawyers tools to demonstrate such control, though they aren't always effective, he added. "That is a complex factual analysis, in which several criteria are taken into account. The EU does offer guidance, but it does not result in the desired clarity in all cases."
Cedric Ryngaert, professor of international law, confirmed Bennink's argument to BNR. He raised concerns about "the not-very-transparent financial constructions that are already quite common in this sector, so it is not always possible to find out who owns a bank account or company." "So basically, you have a Russian who's going to hide behind other people or identities that arent' on the sanction list themselves."
Lawyer Heleen over de Linde pointed out that setting up constructions to avoid sanctions is illegal, but she added that enforcement of this law is flawed. To date, violations of sanctions legislation have largely gone unpunished, she said.