Brunello Cucinelli has formalised more stringent controls for monitoring compliance with European Union sanctions on Russia, the Italian luxury cashmere group disclosed in its 2025 annual report approved by shareholders on Thursday.
The report states that, after commissioning a risk assessment and a gap analysis from an external law firm, the company's board adopted a "strengthened trade compliance procedure" on December 10. According to the filing, the procedure covers both wholesale and retail sales channels and is intended to tighten controls around sanctions screening, re-export risks and potential attempts at circumvention.
In its statement accompanying the report, Cucinelli reiterated that it is fully compliant with EU sanctions governing activities in the Russian market and said it has enhanced its trade compliance protocols to reinforce that position.
The disclosure follows allegations made in September by U.S. short seller Morpheus Research that the brand had continued to sell luxury goods in Russia in violation of EU restrictions. Those accusations prompted a sharp selloff in the company's shares at the time. Cucinelli has repeatedly denied any wrongdoing and, in the report, reiterated that it "promptly and firmly confirmed its full compliance with European Union sanctions regulations with regard to its operations in the Russian market."
The company maintains a wholly owned Russian subsidiary, which remains consolidated in its financial statements. Cucinelli has previously reported that Russia accounts for less than 2% of its global revenue. The annual report notes that the group carried out impairment testing on the Russian unit in light of geopolitical risks but recorded no additional write-downs in 2025.
By documenting the board-approved procedure and the external legal review in its annual report, the company provides shareholders and stakeholders with a formal account of the steps taken to reinforce trade compliance after the earlier allegations. The strengthened procedure is described as applying across sales channels and specifically targeting enhanced screening and measures to identify re-export or circumvention risks.
While the report does not quantify any compliance costs or operational changes beyond the adoption of the procedure, it emphasises the company's position of compliance and the limited weight of the Russian market in its overall revenue mix.
Summary
- Company adopted a strengthened trade compliance procedure on December 10 after an external law firm conducted a risk assessment and gap analysis.
- Procedure applies to wholesale and retail channels and targets sanctions screening, re-export risks and potential circumvention.
- Cucinelli maintains a wholly owned and consolidated Russian subsidiary; Russia represents less than 2% of global revenue and no additional impairment write-downs were recorded in 2025.