EU court backs freezing of trust-held assets in Russia sanctions cases

The Court of Justice of the European Union (CJEU) ruled Thursday that freezing assets linked to sanctioned individuals through trust structures is compatible with EU law.

The ruling came in cases involving companies and assets indirectly linked to individuals targeted by EU sanctions imposed following the onset of Russia’s war with Ukraine.

In these cases, national authorities in Italy had frozen corporate assets and a yacht held through complex trust arrangements established in Bermuda and administered via Swiss trustees.

Although the legal structures were designed to prevent direct control by sanctioned individuals, authorities argued that the assets remained effectively attributable to them.

The companies challenged the measures, arguing that sanctioned individuals lacked legal authority to dispose of or manage the assets under trust terms.

However, the EU court held that the concepts of “belonging to” and “control” under EU sanctions law must be interpreted broadly.

It said these terms can cover not only formal ownership but also situations where individuals exercise “de facto power or influence” over assets, even without direct legal rights.

The court ruled that assets may be considered as belonging to or controlled by sanctioned individuals if they can benefit from them, influence their use, or affect decisions made by trustees managing those assets.

It added that such an interpretation is necessary to ensure the effectiveness of EU sanctions and to prevent circumvention through complex legal or financial structures.

Commenting on the latest decision, Russian Foreign Ministry Spokeswoman Maria Zakharova said Moscow considers any operations involving freezing Russian assets carried out without its consent to be illegal.

“What the European Commission is doing is outright robbery, and any attempts to whitewash it with pseudo-legal formulas, wording, or invented slogans are untenable,” Zakharova said.

She warned that Russia reserves the right to seek compensation for damages caused by what she described as the unlawful use of Russian sovereign assets frozen in Western countries.

Zakharova also sharply criticized the use of proceeds from frozen Russian assets to support Ukrainian state institutions and security agencies, calling such actions “a direct violation of international conventions on combating terrorism.”

The ruling comes as the broader issue of frozen Russian state assets remains politically sensitive within the European Union, particularly in relation to funds held in financial institutions such as Euroclear in Belgium.

EU member states have previously debated how to use the proceeds from immobilized Russian assets to support Ukraine amid ongoing legal and financial concerns. However, Belgium has repeatedly expressed legal and financial concerns about the plan.