UK sanctions ownership and control: how to check a company client

The short answer: check the company and the people behind it

An unlisted company can still be subject to UK financial sanctions if a designated person owns or controls it. Search the company and relevant owners or controllers, trace the ownership chain, examine voting and board rights, and consider evidence of practical control. Record the sources, gaps and reviewer’s conclusion before deciding whether the engagement or transaction can proceed. A “no match” on the company name is not a finding that the company is free of sanctions exposure.^[1][2]

OFSI says the relevant test includes direct or indirect ownership of more than 50% of shares or voting rights, the right to appoint or remove a board majority, or circumstances in which it is reasonable to expect the person can ensure the entity’s affairs are conducted according to their wishes. The applicable regime and facts matter. A staff member should not turn a percentage, a software score or a PSC entry into a legal conclusion without examining the rest of the structure.^[1]

This guide deals with the ownership question for a company already identified in your engagement or matter. Use the accountancy or solicitor onboarding guide to decide which parties to check, and the possible-match guide to investigate an alert about a particular name. The firm-wide policy template helps assign the person who owns this assessment and its escalation route.

• Accountancy client-onboarding checklist
• Solicitor matter-opening guide
• Editable sanctions-screening policy template

Define the decision before drawing an ownership chart

Write down the legal entity, the work proposed and the decision the review supports. An accountancy practice accepting an audit, a firm holding client money and a conveyancer paying sale proceeds face different immediate actions. Note who instructed you, who will receive the service or funds, and whether another company sits between that person and your client. The ownership analysis should answer a real decision, not become a diagram with no owner.

Use the registered company name and number where available, plus known trading or former names. For each relevant parent or intermediate entity, record its jurisdiction and the source of the information. For legal matters, the SRA specifically points firms towards clients, counterparties and third-party funders; its guidance also says firms should not accept client money before completing due diligence. Scope those points to your matter rather than assuming the client alone captures all exposure.^[3]

Keep the questions distinct: is the named company itself listed, is it owned or controlled by a listed person, and is there a separate prohibition on the proposed service or payment? This article addresses the second question. A negative ownership finding does not answer a Russia-related professional-services restriction, a restriction under another jurisdiction, or a licence question.^[4]

Trace the chain through each intermediate company

Start with the client’s current share register, group chart and constitutional documents where they are available, and compare them with public filings and information collected at onboarding. Put each direct owner, its share and voting rights, and any intermediate company on a dated chart. Then follow relevant paths upwards. Do not stop at a UK holding company merely because the immediate client is not listed.^[5]

Distinguish verified facts from statements supplied by the client. A Companies House filing can point to a person or an entity worth checking, but it may not settle a recent transfer, an overseas chain, voting rights in a separate agreement or who actually directs decisions. If the chart conflicts with a filing, save both versions, ask what changed and document which evidence the reviewer relied on.^[6][5]

Record missing links as missing. If a parent company’s owners are unknown, a completed search of the subsidiary does not fill the gap. Assign someone to obtain the relevant register, agreement or professional advice; note the decision that is on hold while the information is incomplete. OFSI’s examples of due-diligence enquiries are risk-sensitive, not a compulsory checklist that every small firm must perform in full for every file.^[5]

• Legal names, company numbers and jurisdictions are recorded for the client and relevant parents.
• Share percentages, voting rights and board-appointment rights are shown separately.
• Each link has a dated source; client statements and independently checked records are distinguishable.
• Unknown owners, disputed transfers and missing agreements have a named follow-up owner.

Why the PSC register is a starting point, not the sanctions answer

Companies House uses a more-than-25% share or voting-rights threshold among its tests for a person with significant control (PSC). OFSI’s commonly relevant share or voting-rights ownership test is more than 50%, but sanctions control can arise through board rights or factual influence without that holding. The registers answer different questions. A PSC is a lead to investigate; being a PSC does not by itself mean a company is sanctioned, and the absence of a named PSC does not clear the company.^[6][1][3]

Do not treat a 25%, 50% or 51% shorthand as a complete test. Exactly 50% of shares is not “more than 50%” under the ownership limb, yet voting arrangements or another form of control may change the result. A 30% holding does not automatically make the company subject to an asset freeze, but it may warrant deeper questions where the holder can direct its affairs.^[1]

A filing also has a date and a reporting purpose. Compare it with the company’s actual share and voting documents, recent changes, and information your practice already holds. Where the structure is complex, record the limits of the public data and refer the case to someone qualified to assess the applicable law and evidence.^[6][5]

Test control beyond a majority shareholding

OFSI’s guidance identifies board-appointment rights and the ability to ensure that an entity’s affairs are conducted according to a person’s wishes. Review the articles, shareholder agreements, voting arrangements and any rights held through another entity. Ask who can appoint directors, block or direct major decisions, and control bank accounts or assets. The purpose is to identify evidence, not to label an ordinary commercial relationship as control.^[1]

OFSI also points to recent divestments, different share classes and operational arrangements as possible areas of enquiry. A transfer shortly before a designation or a sudden change in voting rights may need explanation, but timing alone is not a finding of circumvention. Preserve the documents and the business explanation; escalate contradictions rather than resolving them with an unsupported assumption.^[5]

Do not simply add unrelated designated shareholders together. OFSI says it does not aggregate their holdings unless, for example, there is a joint arrangement or one controls the rights of another. Even where individual holdings fall below the ownership threshold, examine the other control limbs. The exact documents and behaviour may be more important than a column of percentages.^[1][2]

Two fictional examples: clear ownership and unresolved control

Example A is fictional. A UK practice is asked to act for Cedar Trading Ltd, which is not on the UK Sanctions List. Its current share register shows a designated person directly holding 60% of its shares, and the reviewer verifies the identity against the list entry. On those stated facts, the ownership limb is met even though Cedar is unlisted. The reviewer records the documents and list entry, stops the affected decision and obtains advice on the applicable restrictions and any required report or licence. The example does not establish what any real firm should do with particular funds.^[1][2]

Example B is also fictional. A listed person appears to have sold a 30% stake in Alder Services Ltd. The latest filing and client chart agree on the share percentage, but an older agreement gives that person a right to appoint directors and staff say instructions still come through an intermediary. The reviewer cannot clear the company from the percentage alone. They request the current agreement and evidence of how decisions are made, document the unresolved control question and escalate before the planned payment.^[1][5]

In both examples, a name-screening record helps establish whether the individual is the person on the list and when that check happened. It does not prove who owns a private company or interpret an agreement. Keep the screening result and ownership memo together, with separate conclusions and a reviewer for each.

Write a decision another reviewer can reconstruct

A useful record includes the client and work, the chart version and date, documents and public records consulted, names searched, list source and search time, the applicable ownership or control question, facts supporting and weakening a concern, unresolved gaps, reviewer, decision, and trigger for reassessment. Link documents rather than copying sensitive personal data into an unstructured note. If a new owner, instruction or payment route changes the facts, open a fresh review.

Where the evidence suggests ownership or control by a designated person, pause the affected activity while the responsible person assesses restrictions, reporting and licensing. Relevant firms have OFSI reporting duties when the applicable knowledge or reasonable-suspicion threshold is met in the course of business; the duty is not conditioned on finishing every possible enquiry. Professional privilege and the facts of a legal matter can require specialist handling. Do not mark an unresolved control question “cleared” to keep a transaction moving.^[1][3]

For a practice with several reviewers, agree who may release a held engagement and what evidence that person must see. An outcome can be “sufficient evidence to proceed on the facts reviewed”, “more information needed”, or “concern escalated”. None is a permanent guarantee: a later designation, ownership change or new document can reopen the question.

• Can the next reviewer identify every company and person considered, with the source and date?
• Are ownership, voting, board rights and practical-control evidence distinguished?
• Does the note state what remains unknown and who will resolve it?
• Is any hold, report, licence assessment or decision to proceed documented by a named reviewer?

• How to investigate a possible sanctions match
• Sanction Search source coverage and limitations
• Sanction Search plans and pricing

Where a screening tool helps, and where judgement remains

Sanction Search can help a practice search the company and identified people against supported published sanctions sources, review possible matches and export evidence of those checks. That makes the list-screening part of a company review easier to repeat and hand over. The practice still has to identify the relevant owners, obtain and interpret company documents, assess control and decide what the law requires for the engagement.

Build the ownership memo into your existing client-acceptance or matter file and link the screening evidence to it. A clean result should say which names and sources were checked, not “ownership approved”. Review the product’s coverage and plan features against the sources and workflow your firm has chosen before relying on it.