EU Court Expands Authority to Freeze Russian Assets Held in Trusts

The European Union has imposed sanctions on individuals linked to Russia’s war in Ukraine, allowing the freezing of assets to block financing of the conflict. The framework aims to close loopholes that let sanctioned persons retain control through indirect ownership.

The Straits Times

The Court of Justice of the European Union (CJEU) in Amsterdam ruled on three cases brought by an Italian court. The cases concerned two companies and a luxury yacht seized by Italian authorities, held through trusts but identified as owned by Russian nationals on the EU sanctions list. The Russian individuals are described as “Russians sanctioned over the war in Ukraine.”

UsNews and World Report

The Italian court ordered the seizure, and the owners contested the freezes, claiming the sanctioned individuals had no direct legal control. The CJEU rejected this argument, holding that ownership and control can be inferred from “all forms of power or influence exercised over assets,” even when no formal legal link exists. It noted that indications of ownership may arise from “needlessly complex legal structures.” Accordingly, assets may be frozen if they are only indirectly linked to a sanctioned person.

The Straits TimesUsNews and World Report

The ruling broadens the EU’s capacity to target wealth hidden in trusts, foundations or layered entities. By treating indirect influence as control, the decision seeks to prevent sanctioned parties from evading freezes and signals that challenges based on formal ownership gaps are unlikely to succeed.

UsNews and World Report

The CJEU stated that the purpose of freezing funds is to limit, “as much as possible,” any transactions that could benefit sanctioned individuals, and to prevent “any circumvention of sanctions.” The court framed the interpretation as consistent with the EU’s strategy to keep sanctions effective against sophisticated evasion tactics.

The Straits Times

The affected companies argued the Russian owners lacked power over the entities and therefore should not fall under the EU’s sanctions regime. Their challenge focused on the absence of a direct legal relationship between the sanctioned persons and the assets. The CJEU’s dismissal highlights the tension between formal property law and the EU’s security-focused sanctions regime.

The Straits Times

• “all forms of power or influence exercised over assets” — Court of Justice of the European Union

The Straits Times

• “as much as possible” — Court of Justice of the European Union

UsNews and World Report

• “needlessly complex legal structures” — Court of Justice of the European Union

UsNews and World Report

• “Any circumvention of sanctions should also be prevented, it added.” — Court of Justice of the European Union

The Straits Times

Both Reuters and The Straits Times present identical facts about the ruling, and no contradictory information is present in the available sources.

UsNews and World Report