UK sanctions and an Italian company: the ownership and control test
Updated to
In short: a UK business can be caught by UK financial sanctions even when an Italian company is not named on the UK Sanctions List, because an entity owned or controlled by a designated person is treated the same way. OFSI's test looks at more than 50% of shares or votes, the right to appoint a majority of the board, and practical control. To apply it you first need to know who owns the company. Veryfy shows the owners; it does not screen them against any sanctions list.
Part of the guide Checking an Italian company: a guide for UK businesses after Brexit. All guides: Guides.
Who has to comply?
OFSI, the Office of Financial Sanctions Implementation, states that UK financial sanctions apply to everyone within the territory and territorial sea of the UK and to all UK persons, wherever they are in the world. That covers UK nationals and legal entities established under UK law, including their branches. A UK company trading with an Italian customer or supplier is therefore bound in its own dealings, whatever the Italian counterparty's own obligations (OFSI: UK financial sanctions general guidance).
If you know or have reasonable cause to suspect that you hold, control or are otherwise dealing with the funds or economic resources of a designated person, OFSI says you must freeze them, not deal with them or make them available to that person unless an exception or a licence applies, and report them to OFSI. The risk is not limited to a name on a list.
What is the ownership and control test?
The guidance says an asset freeze and some financial services restrictions apply to entities that are owned or controlled, directly or indirectly, by a designated person. Those entities may not be designated in their own right, so their names may not appear on the sanctions list, but they are subject to sanctions in the same way. According to OFSI, an entity is owned or controlled in any of these circumstances:
- the person holds, directly or indirectly, more than 50% of the shares or voting rights;
- the person has the right, directly or indirectly, to appoint or remove a majority of the board of directors;
- it is reasonable to expect that the person would be able to ensure the affairs of the entity are conducted in accordance with their wishes.
Three points in the guidance matter for an Italian S.r.l. or S.p.A. with a layered shareholding:
- Minority stakes are not automatically safe. A smaller stake does not by itself mean sanctions apply, but you must consider whether the designated person is in control, for example because the company is run according to their wishes. The guidance also tells you to stay alert to any increase of the stake above 50%.
- Holdings are not simply added together. OFSI would not aggregate different designated persons' holdings unless the shares or rights are subject to a joint arrangement or one party controls the rights of another.
- Control can be exercised through others. The guidance gives the example of an unlisted person used to enter into transactions for a designated one, who is then subject to the same restrictions.
Why the Italian ownership structure is the hard part
The test is simple to state and hard to apply, because the answer sits in the shareholding. In Italy the shareholders and the people who hold positions are recorded in the Registro Imprese. The register's company file (fascicolo) lists the shareholders, the holdings in other companies and the controlling companies, together with the directors and the latest filed accounts (Registro Imprese: the company file). When a shareholder is itself a company, you have to follow the chain upwards.
That is the step Veryfy does for you. When a significant shareholder is itself a company, including a foreign one, the report traces the chain of control up to three levels, instead of stopping at the first name on the register extract.
| Question | Veryfy product |
|---|---|
| Who really controls this company? | Beneficial owner, €9.90 |
| Owners, directors and the company's place in a wider group | Decision, €49, which adds links with other companies |
| A large or sensitive file, with the finest reading of the risk | Investigation, €99 |
Verification (€19) and Decision (€49) include the beneficial owner, shareholders and directors. Every company product comes with a free Check anti-truffa (anti-scam check) on the email, website and IBAN you were given.
What Veryfy does not do
This matters, so we say it plainly. Veryfy does not screen anyone against the UK Sanctions List or any other sanctions list, and a clean report is not a sanctions clearance. The report tells you who the owners and directors are, from Italian official sources, with source and date. You then check those names yourself against the official list (GOV.UK: the UK Sanctions List), or ask your compliance team or lawyer to do it.
The report is in Italian, and names of companies and offices keep their original wording. Chains that run through structures with no public record may remain incomplete, and the "reasonable to expect" limb of the test, which is about practical influence, cannot be read from a register at all.
A sensible order of work
- Identify the Italian company exactly: legal name, tax number and registered office, taken from the contract or invoice and not from an email signature.
- Obtain the owners and directors, with the chain of control, before the contract is signed or the credit line extended.
- Check each name and any entity above them against the UK Sanctions List, and record the date.
- Repeat before renewal or a significant change, and decide in advance who in your business owns the question.
- If anything looks wrong, stop and take advice. OFSI's guidance sets out reporting duties for certain firms, including those that are authorised under the Financial Services and Markets Act 2000, accountancy and legal services providers and estate agents.
If your UK business is regulated, our guide to KYC for an Italian corporate client covers the customer due diligence side, and PSC vs Italian beneficial owner explains how the UK and Italian ownership concepts differ.
Frequently asked questions
Can I breach UK sanctions by dealing with an Italian company that is not on the sanctions list?
Yes. OFSI says an asset freeze applies to entities owned or controlled, directly or indirectly, by a designated person, even when the entity is not listed in its own right.
What counts as ownership or control under OFSI's guidance?
Holding more than 50% of the shares or voting rights, having the right to appoint or remove a majority of the board, or being reasonably able to ensure the entity's affairs are run according to one's wishes, directly or indirectly.
Does Veryfy check the UK Sanctions List?
No. Veryfy shows the owners, directors and chain of control from Italian official sources. Checking those names against the UK Sanctions List is a separate step you or your compliance team must carry out.
Does a minority shareholding by a designated person matter?
It can. The guidance says a minority interest does not necessarily trigger sanctions, but you must assess whether the designated person controls the entity and watch for any rise above 50%.
Sources
Official sources opened and read on 2026-10-26.
- OFSI: UK financial sanctions general guidance (ownership and control, who must comply)
- GOV.UK: the UK Sanctions List
- Registro Imprese: the company file (shareholders, holdings, controlling companies)
- GOV.UK: UK financial sanctions guidance
General information, not legal advice. Sources verified on 2026-10-26.
Frequently asked questions
Can I breach UK sanctions by dealing with an Italian company that is not on the sanctions list?
Yes. OFSI says an asset freeze applies to entities owned or controlled, directly or indirectly, by a designated person, even when the entity is not listed in its own right.
What counts as ownership or control under OFSI's guidance?
Holding more than 50% of the shares or voting rights, having the right to appoint or remove a majority of the board, or being reasonably able to ensure the entity's affairs are run according to one's wishes, directly or indirectly.
Does Veryfy check the UK Sanctions List?
No. Veryfy shows the owners, directors and chain of control from Italian official sources. Checking those names against the UK Sanctions List is a separate step you or your compliance team must carry out.
Does a minority shareholding by a designated person matter?
It can. The guidance says a minority interest does not necessarily trigger sanctions, but you must assess whether the designated person controls the entity and watch for any rise above 50%.
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