The European Union's Court of Justice ruled on Thursday that assets tied to individuals on the EU sanctions list may be frozen even when those assets are held by trusts and there is no explicit legal connection to the listed persons.
In its decision the court confirmed that an indirect link between a sanctioned person and assets can be sufficient grounds for a freeze. It said concepts of ownership and control should include any form of power or influence exercised over assets, not only formal legal ties.
The judgment emphasized the purpose of asset freezes under the sanctions regime: to restrict as far as possible any transactions involving the frozen funds and to prevent attempts to circumvent targeted measures.
The legal ruling arose from three cases referred by an Italian court. Each case concerned seizures carried out by Italian authorities of companies and a yacht that were held via complex ownership arrangements involving trusts, but were regarded by authorities as effectively owned by Russians named on the EU sanctions list.
The affected companies challenged the seizures, arguing that the sanctioned individuals lacked the power to control those entities. The EU court dismissed those challenges. It held that evidence of ownership or control can be drawn from the surrounding circumstances and from legal structures that are needlessly complex, allowing authorities to treat such indications as sufficient for a freeze.
The court framed its interpretation of ownership and control broadly, allowing for inferences where direct legal links are absent. The ruling underscores that authorities may rely on circumstantial indicators and the opacity of ownership arrangements when assessing whether assets are effectively connected to sanctioned persons.
By upholding freezing measures in these cases, the court affirmed that asset freezes are intended to curtail operations involving targeted funds and to close pathways for evasion. The decision provides legal backing for seizures of assets held through trusts when authorities conclude those assets are linked, even indirectly, to individuals on the sanctions list.