Under the European Council Regulation on restrictive measures against Russia, amended in 2023, banks and financial institutions in the European Union are required to report all outgoing transfers over 100,000 euros that involve companies with significant Russian ownership. This requirement, referred to as Article 5r, is part of the EU’s twelfth sanctions package against Russia and is designed to enhance oversight of financial flows connected to Russian interests amid ongoing conflict in Ukraine.
Moody’s has reported that, as of January 2026, there are 49,085 companies within the EU that are more than 40% owned by a Russian entity or individual. This figure marks an increase of 1,353 companies—approximately 2.8%—since June 2025. Banks and financial institutions must submit their reports on these transactions by January 15, 2026, as part of the semi-annual reporting cycle. The next deadline for such reports is July 15, 2026.
The compliance obligation presents risks for financial institutions. Failing to properly report qualifying transactions could result in fines, investigations by regulators, and reputational damage. Each EU member state enforces penalties independently; therefore, institutions are expected to have effective systems in place for detecting and reporting these transactions.
According to Nicola Passariello, Director in Moody’s compliance & third-party risk management solutions team: “Russian-owned companies (that meet the reporting threshold) have continued to proliferate in Europe, with notable shifts since the previous reporting period as Moscow adapts to ongoing Western restrictions.”
Passariello added: “With the overall total number of qualifying Russian-owned entities based in the EU increasing by nearly 3% since last summer, Bulgaria stands out as the country with the most. This concentration is closely linked to Bulgaria’s strategic role as a transit country for Russian gas via the TurkStream pipeline, which has fostered deep commercial ties and sustained corporate activity — particularly in sectors such as real estate and trade. These trends highlight the evolving landscape and the ongoing need for vigilance among compliance professionals.”
Moody’s analysis is based on data from its Orbis database. The company notes that tracking both direct and indirect ownership stakes across thousands of entities can be complex. Monitoring indirect transfers within the bloc adds another layer of difficulty compared to direct transfers from an EU entity directly outside the EU.
Institutions may need advanced tools not only to monitor ownership but also to aggregate stakes across related parties. Failure to comply exposes them to various legal and financial risks.
Moody’s offers services intended to help credit and financial institutions identify entities that require monitoring under these regulations.
