#62023CJ0483EU Court clarifies when sanctioned persons’ trust assets must be frozen
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This judgment clarifies how EU sanctions against Russia apply to assets placed in a trust when the person who created the trust is on the EU sanctions list. The Court explains that assets may still be frozen if they effectively belong to, or are controlled by, the listed person, even if legal ownership has been moved into a trust structure. The ruling matters for trustees, banks, asset managers, family offices, and compliance teams handling trusts or similar arrangements linked to sanctioned individuals. They need to look beyond formal ownership and assess whether the listed person can still influence, benefit from, or control the assets.
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Key Changes
- Clarifies that trust assets can be frozen when they effectively belong to a sanctioned settlor.
- Confirms that formal transfer into a trust does not by itself prevent EU asset-freezing rules from applying.
- Requires compliance teams to assess real control and benefit, not just legal title.
Obligations
What this law requires
For purposes of Article 2(1) of Regulation (EU) No 269/2014, funds and economic resources held in a trust may be subject to freezing where they effectively belong to or are controlled by a person listed in Annex I, even if formal legal ownership has been transferred to the trust.
Compliance assessments involving trusts linked to listed persons must look beyond formal ownership and examine whether the listed settlor can still influence, benefit from, or control the trust assets.
Where trust assets are found to belong to or be controlled by a person listed under Annex I to Regulation (EU) No 269/2014, those funds and economic resources must be treated as frozen under Article 2(1).