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Article 5r: Reporting transfers with a Russian nexus

As of July 2024, EU credit and financial institutions have had an obligation to comply with new reporting requirements for Russian-owned transactions, as outlined by the European Commission.

These requirements, part of Article 5r of Council Regulation (EU) No. 833/2014, mandate that institutions must report on all “funds” transferred from an EU entity to any non-EU country, where transactions exceed €100,000 and originate from a Russian-owned entity.

Funds include financial assets such as cash, cheques, claims on money, drafts, money orders, and other payment instruments, deposits with financial institutions or other entities, balances on accounts, and debts. Specific guidance was also issued in 2022 related to the prohibition on accepting deposits from Russian nationals or natural persons residing in Russia that exceed €100,000.

The introduction of this reporting requirement follows this prohibition and the EU’s 12th package of sanctions against Russia related to the war with Ukraine. The regulation aims to ensure better assessment of potential violations of Russia-related sanctions and map out Russia’s sources of revenue.

EU Member States are tasked with assessing the information reported by obliged entities to find potential sanctions breaches or circumventions. The European Commission was due to review the functioning of the new measures in December 2024.

A key challenge for credit and financial institutions lies in tracing the flow of indirect financial transfers and determining the extent of Russian ownership in relation to a company’s transactions. Often, institutions have oversight of direct transfers, however identifying indirect transfers and the level of Russian ownership has historically been difficult. 

Qualifying outgoing transactions

The €100,000 threshold includes asset transfers and both one-off and cumulative transactions within a semester (six-month period), with no minimum threshold for each contributory transaction.

The EU's definition of Russian ownership applies to entities that are more than 40% owned - directly, indirectly or through aggregated ownership interest - by a Russian person or entity, including individuals with dual citizenship.

The first reporting period ended on June 30, 2024, with banks and other institutions having until the July 15 to comply. This reporting schedule has continued on a semi-annual/6-monthly basis with July 15, 2025, being the most recent deadline.

Moody’s can provide entity data, beneficial ownership data, and details on corporate structures. This helps create greater transparency for institutions on direct Russian ownership, indirect ownership — for example through circular ownership — and cumulative ownership.

We can also provide comprehensive sanctions screening for those directly sanctioned or sanctioned by extension. 

Key details of the reporting requirements for Russian-owned transactions

  1. The reporting requirement, which applies to EU credit and financial institutions as well as non-EU branches of EU financial institutions*, will give national competent authorities (NCAs) in the European Union better visibility to monitor movement of funds by EU entities with a Russian nexus.  

  2. It applies to “legal persons, entities, and bodies established in the European Union whose proprietary rights are directly or indirectly owned more than 40% by a legal person, entity, or body established in Russia; a Russian national; or a natural person residing in Russia.”

  3. The measure covers all types of transfers made by the relevant Russian-owned companies that are leaving the EU/Member States' jurisdiction. It includes all types of “funds” (a sample of which has been listed), regardless of the currency.

  4. The criteria of “control” is not included in the scope of Article 5r - control referring to the ability of an individual or entity to exercise influence or direction over the management and policies of an entity – however aggregation of percentage ownership is included. 

  5. The regulation covers Russian nationals with a dual citizenship, including EU citizenship. 

Enhancing transparency: takeaways from the EU reporting requirements for Russian-owned transactions

The reporting requirement and deadlines for outgoing Russian-owned transactions introduced by the European Commission represent a significant step towards enhancing monitoring and oversight of financial transactions involving entities with ties to Russia.

The regulations aim to prevent potential violations of sanctions and track the flow of funds from EU entities with Russian nexus.

Moody’s identification of qualifying entities can provide valuable insights for credit and financial institutions to meet their reporting obligations. Moving forward, compliance with these requirements will be crucial for institutions across the EU to ensure adherence to regulatory standards and mitigation of risks associated with financial transfers involving Russian owners. 

Get in touch

For more information about Moody’s curated datasets, sanctions screening, and entity verification, please get in touch — we would love to hear from you.

*Third-country subsidiaries of EU financial institutions are recommended for similar control, though technically outside the scope of article 5r because they are not incorporated under the law of a Member State.