The Brunello Cucinelli case, suspended and then readmitted to trading on the Milan Stock Exchange after the report of the hedge fund Morpheus Research which has alleged violations of European sanctions against Russia and for which the cashmere company is considering legal action, raises a further question: do these restrictions, designed by the EU to weaken Moscow economically and deprive it of the resources needed for the war in Ukraine, really have the desired effect? And above all, don't they sometimes end up being own goals, penalizing Italian and European companies?
An illuminating one study published by Moody's Among other things, it shows that in Italy there are 2.564 companies with more than 40% of their capital owned by Russian entities (data updated to June 2025). These are the so-called Russian-backed entities, and there are nearly 50.000 across Europe. Monitoring these companies can be a way to mitigate the potential risk of sanctions evasion by mapping the source of their Russian-origin revenues. "The fact of having that characteristic in itself obviously isn't synonymous with irregularity, but these are operators who are kept under observation by Brussels, especially when, following reports from banks, they transfer funds exceeding €100.000 to non-EU countries," he explains. Nicholas Passariello, director/Industry Practice Lead in Financial Crime Compliance in Moody's Analytics.
Dr. Passariello, let's start with the question many are asking: are European sanctions truly effective, or do they risk penalizing our companies more than the Russian economy?
Sanctions are not instruments of economic policy but of foreign policy and national security. The question to ask, if anything, is this: is violating the rules an acceptable cost for a European operator? The answer is absolutely no, because in addition to the fine and reputational damage, it would trigger merciless sell-offs by institutional investors, who are currently extremely vigilant about compliance.
What exactly do these sanctions consist of?
Let's say, first of all, that we're at the 18th package of sanctions launched by Brussels against Russia and Belarus, with a 19th package proposed but still awaiting approval by EU members. In the past, these measures focused primarily on defense and finance, but today they are much more far-reaching, because the aim is to increasingly impact the Russian economy, which is now effectively a war economy. So we're moving from freezing the oligarchs' assets to banning imports and exports in many sectors, such as luxury goods, which are significant in trade relations between Italy and Russia, but also precision mechanics, electronics, and chemicals. The luxury category includes everything from sparkling wine to caviar to ties.
One of the restrictions is the ban on exporting goods to Russia worth more than 300 euros. But isn't it all too easy to circumvent it by fictitiously reducing the value of the goods?
There are many mechanisms for circumventing sanctions, more or less sophisticated. Data shows that from before the invasion of Ukraine to 2024, there was an 80-90% drop in transactions between the EU and Russia. However, the data doesn't take into account, for example, the system of trade triangulation, that is, the use of third countries bordering Russia or with free customs relations with Moscow, for trade. These are mostly former Soviet countries like Armenia, Kazakhstan, Georgia, and others, but also Turkey, Arab countries, and even some EU or prospective EU countries like Lithuania and Serbia. Armenia, for example, has seen imports of high-tech products rise by 300-400%, completely out of line with demand. Then there are more sophisticated methods, such as offshore intermediaries, especially Asian ones, who solve the problem through shady companies. Or they can, by lowering the value of the goods. Consider watches, for example: individual components are shipped, which are worth less than 300 euros, and then they are assembled in the destination country."
Your study revealed that there are approximately 48.000 companies operating in Europe with Russian ownership exceeding 40%.
Moody's data indicates a significant increase in Russian-owned companies in some European countries, not so much in Italy, where the figure is essentially stable, but especially in Bulgaria and the Czech Republic, which remain by far the countries with the largest presence of Russian-owned companies according to our data, but also in Portugal, Cyprus, and Malta. This could indicate potentially suspicious business activity, but be careful: this in itself is not proof. European regulations also require banks to report when these operators transfer money worth more than €100.000 outside the EU. That isn't proof either, but at that point the company is being monitored by the authorities.
What is the current profile of Italian and European companies operating in the Russian market?
This is an interesting and thought-provoking topic. Before the war in Ukraine, large multinationals with well-known brands exported to Moscow. Today, whether due to restrictions or reputational opportunities, the most exposed groups have given way to small and medium-sized businesses, most of which were founded perhaps not coincidentally during this period.
