EU Publishes New Best Practices Guidance, Including Updated Ownership Test And Additional Control Guidance

Key Takeaways

• On 3 July 2024, the Council of the European Union (the "EU Council") published its revised Update of the EU Best Practices for the effective implementation of restrictive measures ("Best Practices").¹ This provides significant guidance and updates to the EU "Ownership" and "Control" tests, amongst other updates.
• The "Ownership" test threshold has been amended to possession of "50% or more" rather than "more than 50%" of the proprietary rights of an entity, as it previously was – now aligning the EU (European Union) with the United States (US) position and diverging from the UK.
• The "Control" test has been expanded to include new "indications" of potential red flags, such as majority shareholdings by designated persons, buyback options, transfers of shares close to the time of designation, the use of front persons, and the use of trusts and shell companies. Prong (e) of the EU "Control" test criteria, which addresses a person holding a dominant