Sanctions related restrictions and the restructuring of international holdings

Nikita Veremeev

19.01.2026 | 6 min read

Updated: 19.01.2026

When entrepreneurs ask me what has changed most radically in international business in recent years, I answer with one word: sanctions. Sanctions restrictions are no longer just “background” – they shape the architecture of international holdings, determine access to banks, licenses, capital markets and even basic cross-border payments.

Since 2016 the team COREDO has been helping international companies build and restructure corporate structures in Europe, Asia and the CIS, obtain financial licenses, set up AML and sanctions compliance, pass bank KYC and maintain business resilience under the sanctions regimes of the EU, the US and the UK. In that time I have seen one thing: sanctions risk for business has become as fundamental a parameter as taxes or operating expenses.

How sanctions change the structure of business

The sanctions landscape has become multilayered:

• sanctions regimes of the EU, the US, and the UK with different listing criteria and different approaches to enforcement;
• secondary sanctions and risk to counterparties, when not only the sanctioned beneficiary but also the bank, exchange, or supplier serving them is targeted;
• financial sanctions and restrictions on payments, closure of correspondent accounts, bans on transactions in certain currencies;
• export controls and restrictions on the supply of technologies and dual-use goods.

At the level of ownership structure, this is reflected in three key effects:

1. Change in business ownership structure due to sanctions
   When a beneficiary or a key group company falls under EU or US sanctions, regulators and banks begin to view the entire ownership chain as potentially sanction‑tainted. This increases the risk of blocking sanctions and asset freezes even in friendly jurisdictions.
2. Shift of focus from tax optimization to sanctions resilience
   International tax planning continues to play a role, but the priority shifts: first sanctions resilience of the business model and corporate structure, then tax efficiency, then operational flexibility.
3. Restructuring international holdings under sanctions pressure
   Classic chains with a single central holding in a nominally “neutral” jurisdiction no longer always work. More often we move to multi-level architectures: master-holding, regional sub-holdings, separation of sanction-sensitive and “clean” business lines (spin-off, carve-out of sanctioned assets).

How to assess sanctions risks in a group

When an owner or CFO comes to me with the phrase «we need to do something with the holding, banks have started blocking payments», I never start by choosing a jurisdiction. The first step is an audit of the sanctions resilience of the corporate structure.

The project usually starts with three blocks:

1. Mapping the structure and ownership chains
   The COREDO team requests:
   • the current diagram of the international holding;
   • a list of beneficiaries (UBO), controlling persons and directors;
   • a list of all jurisdictions of presence: holdings, operating companies, SPVs, funds, trusts;
   • intragroup agreements: loans, guarantees, IP licenses, allocation of functions and risks.

   At this stage it is important not just to draw the «company tree», but to understand actual control and operational substance: where key decisions are made, where the directors are located, where actual activity is carried out.

2. Sanctions screening of beneficiaries and companies
   We conduct sanctions screening of beneficiaries, directors, key counterparties and banking partners against EU, US (OFAC SDN/Sectoral), UK lists, as well as local lists in jurisdictions of presence.

   At this stage it is important not only whether someone is present/absent on the lists, but also the assessment of:

   • the degree of risk under the «50% rule» (when aggregate ownership by sanctioned persons is ≥50%);
   • the probability of individual shareholders and top management being included in sanctions lists in the coming years;
   • the degree of contamination of ownership chains.
3. Modeling sanctions scenarios

   For significant groups we model sanctions scenarios:

   • what will happen if one of the key beneficiaries is sanctioned;
   • how inclusion on the SDN list will affect access to correspondent banking in euros and dollars;
   • which assets will be frozen and in which jurisdictions;
   • how the expansion of EU and US sanctions in 2026 will affect current supply chains, licenses, IP and the capital market.
   We then use such a sanctions risk matrix as a basis for designing the new corporate architecture.

Restructuring of international holding structures

Once the risk picture is clear, the main question arises: targeted adjustments or a complete restructuring of the international holding.

Case logic: from cosmetic fixes to redomiciliation

In COREDO’s practice, I conventionally divide situations into three levels:

1. Cosmetic adjustment
   Example: a holding in the EU, beneficiaries are not under sanctions, but banks have tightened sanctions compliance and started regularly requesting UBO disclosure, source of funds, and transaction documents.

   The solution developed by COREDO here usually includes:

   • adjusting the group’s sanctions policy and the KYC package to the requirements of international banks;
   • reworking standard contracts to include sanctions clauses;
   • implementing a formalized sanctions screening of counterparties and documenting the economic substance of transactions.
2. Structural fine-tuning
   Example: an international holding with operating companies in the EU and Asia, some shareholders are located in a sanctions-sensitive jurisdiction, and banks have begun blocking certain transactions.

   Here we are already talking about:

   • changing ownership chains to reduce sanctions risk for subsidiaries;
   • possible separation of individual assets into a separate holding structure (ring‑fencing sanctions risks);
   • diversification of jurisdictions for holding and operating companies (Europe + Asia, using neutral jurisdictions with a stable legal system).
3. Deep restructuring / redomiciliation
   Example: a beneficiary is listed on sanctions lists, the existing holding in Europe has some assets already at risk of freezing, banks refuse to service it and close correspondent accounts.

   In such cases, the COREDO team has carried out projects including:

   • redomiciliation of the international holding to a jurisdiction that is more resilient to sanctions;
   • re-registering the holding in a friendly jurisdiction while retaining control, complying with substance requirements, and minimizing tax risks;
   • a possible spin‑off and separation of the business into a sanctions-sensitive part and a “clean” segment to protect investment appeal and the ability to work with global partners.

Choosing a Jurisdiction for a Holding Company After Sanctions

The question I hear most often: “Which jurisdiction is currently the safest from a sanctions perspective?” There is no universal answer, but there is a set of criteria we follow at COREDO.

Key Selection Criteria

When choosing a jurisdiction for a new holding company under sanctions pressure, I look at:

• sanctions policy and international obligations
  Participation in EU, US, UK sanctions regimes, historical enforcement practice, tendency towards extraterritorial effect.
• stability of the legal system and protection of property rights
  Including access to international arbitration, predictability of the courts, availability of investment protection agreements (BITs).
• tax regime and double taxation treaties
  It’s important not only the nominal tax burden but also the real ability to apply DTTs without a risk of accusations of treaty shopping.
• substance and real presence requirements
  The role of business purpose (substance): presence of an office, resident directors, employees, head‑office functions in an international holding.
• banks’ and regulators’ approach to sanctions risks
  The level of “over‑compliance”, banks’ tendency to proactively refuse service, practice of UBO disclosure and sanctions screening.

Diversifying Jurisdictions and Neutral Hubs

COREDO’s experience confirms that, under sanctions, diversifying jurisdictions for holding and operating companies often yields better results than relying on a single holding center.

• One or two key holding jurisdictions for asset ownership (EU and/or Asia);
• Regional sub-holdings (Europe, Asia, sometimes the Middle East) to separate sanctions and operational risks;
• Choosing jurisdictions perceived by the market as maximally “neutral” and predictable in terms of sanctions, while having a functioning banking system and access to international payments.

Important: de-offshorization and sanctions are closely linked. Structures built solely on offshore companies without real substance appear vulnerable on the sanctions agenda — both to regulators and to banks.

Banks, cross-border payments and sanctions

Even a perfectly structured corporate structure stops working if bank compliance views the group as a sanctions risk.

• banks refusing to provide services and account closures;
• payment rejections due to sanctions screening of the counterparty or beneficiary;
• sanctions and closure of correspondent accounts, which make settlements in certain currencies impossible;
• increased levels of «over‑compliance»: banks sometimes block transactions that do not formally violate the sanctions regime but appear risky to them.

Relations with banks

Our experience at COREDO has shown: when working with international banks under sanctions, the groups that succeed are those that:

• formalize a sanctions compliance policy and can show the bank not only declarations but also procedures that actually work;
• conduct sanctions screening of counterparties and UBOs, retaining records and logs of checks;
• have a ready legal opinion on sanctions law for complex transactions and can promptly provide it to the bank.

When a bank refuses payment because of sanctions risk, three types of arguments work best:

1. A complete package of KYC/AML documents for the counterparty and beneficiaries.
2. A detailed description of the transaction chain and a documented business purpose (economic substance).
3. A legally vetted opinion (legal opinion) on the operation’s compliance with the sanctions regimes of the EU/US/UK.

Alternative payment solutions and cash management

Given restrictions on cross-border loans, traditional lending and cash‑pooling, we increasingly use:

• diversification of banking infrastructure across regions and currencies;
• alternative settlement centers and clearing systems where permissible and not violating the sanctions regime;
• rethinking intra-group financing: intercompany loans, guarantees, cash‑pooling taking into account thin capitalisation and sanctions restrictions.

Redomiciliation, M&A and sanctions due diligence

Sanctions pressure is increasingly a trigger for:

• re-registration of business in a new jurisdiction;
• redomiciliation of holding companies;
• M&A transactions aimed at selling sanctions-sensitive assets or spinning them off into separate structures.

How to redomiciliate a holding company

A typical redomiciliation project that we handle includes:

1. Assessment of tax risks when relocating the holding
   Exit taxes (exit tax), potential triggers of CFC regimes, impact on the applicability of double taxation treaties.
2. Sanctions analysis of the new jurisdiction
   How involved it is in the sanctions regimes of the EU, the US and the UK, enforcement practice, banks’ readiness to work with the group’s profile.
3. Documenting the business purpose (substance)
   Why the group is relocating: political risk, sanctions risk, the need to protect assets — all of this should be properly documented to avoid allegations of abuse of regimes and treaty shopping.
4. Changes to corporate governance and documents
   Articles of association, shareholder agreements, policies & procedures on sanctions compliance and working with high‑risk counterparties.

Sanctions due diligence in M&A transactions

In M&A transactions, the sanctions factor has become a separate block of Due Diligence:

• beneficiary checks, directors and key counterparties of the transaction target;
• assessment of deal‑breaker sanctions factors that prevent banks from financing the transaction or servicing the group after the deal;
• analysis of sanctions clauses (representations & warranties, indemnities, limitation of liability) in the SPA;
• setting up escrow mechanisms and carve‑out schemes for sanctions‑sensitive assets.

The COREDO team supports such transactions not only at the legal level but also in terms of AML and sanctions compliance, which is important when engaging banks or investment funds.

Internal sanctions compliance in a corporation

True resilience to sanctions is achieved not by schemes, but by a system.

Components of a working sanctions system

In successful projects implemented by the COREDO team, there are recurring elements:

• group sanctions policy
  A formalized document understandable to the board of directors, top management and operational teams.
• KYC procedures/AML and sanctions screening of counterparties and UBO
  Regulation: whom, how and to what depth we verify, how we document the results, how we make decisions on high‑risk clients and partners.
• sanctions risk‑based approach
  A risk map by jurisdictions, transaction types, counterparties, business units; a defined risk appetite and the board of directors’ sanctions tolerance.
• internal controls and control points
  Who and at what stage of the transaction is responsible for the sanctions function: legal, finance, compliance, business units.
• training & awareness
  Training key employees: how to identify sanctions risks, when to involve lawyers, how to communicate with banks when payments are blocked.

Personal and corporate responsibility

Under sanctions the director’s responsibility and top management have become personal: sanctions violations can lead not only to fines for the company, but also to personal restrictions.

How to approach changes in a holding company

If to summarize COREDO’s project experience, the practical roadmap for an international holding under sanctions restrictions and the tightening regimes of the EU, US and the UK looks like this:

1. Diagnosis
   • a complete map of the corporate structure and ownership chains;
   • sanctions screening of beneficiaries, directors, key counterparties and banks;
   • modeling sanctions scenarios.
2. Strategic decision
   • whether targeted fine‑tuning or deep restructuring is needed;
   • selection of jurisdictions for holding companies and regional sub‑holdings;
   • designing the target corporate architecture with regard to sanctions resilience and tax planning.
3. Legal and tax implementation
   • redomiciliation, reregistration, spin‑off, corporate restructuring;
   • updating corporate agreements, governance, policies & procedures;
   • setting up intragroup financing taking into account sanctions and banking restrictions.
4. Banking and payment infrastructure
   • setting up relationships with banks, preparing KYC/sanctions packages;
   • diversification of banks, currencies and settlement channels;
   • creating internal protocols to respond to freezes and rejections.
5. Integration of sanctions compliance into management
   • implementation of a risk‑based approach;
   • training of management and key employees;
   • regular monitoring of changes in sanctions legislation and updating policies.