On 21 May 2026, the Court of Justice of the European Union delivered two important rulings (Cases C-483/23, C-428/24 and C-476/24) that may significantly affect the application of EU sanctions law.
The Court confirmed that the use of trust structures does not, in itself, prevent assets from being frozen where a sanctioned person retains the ability to exercise control over those assets or derive an economic benefit from them.
The Cases and the Applicants’ Arguments
The cases concerned assets held through trust structures:
- The first case: It concerned four Italian companies whose ultimate owner was a Bermuda company held in an irrevocable trust. The settlor of the trust was included on the EU sanctions list, although he had formally been removed from the class of beneficiaries shortly beforehand.
- The other two cases: The disputes concerned the assets of an Italian company and a superyacht worth approximately EUR 530 million, which were also held in trusts. The trust deeds contained specific provisions prohibiting the trustee from making any payments to a person subject to sanctions.
The applicants argued that, under these circumstances, the sanctioned person could not be considered the owner of, or a person exercising control over, the assets and that there were therefore no grounds for freezing them.
The CJEU’s Position: Actual Control Takes Priority
However, the Court of Justice disagreed with these arguments. In its rulings, it emphasized that, when applying Council Regulation (EU) No 269/2014, the concepts of “ownership” and “control” must be interpreted not solely on the basis of formal legal arrangements, but primarily by assessing the actual ability to influence the assets.
In other words, the decisive factor is not who is formally listed in the documents as the owner or beneficiary, but whether the sanctioned person can actually influence the management of the assets or derive an economic benefit from them.
Therefore:
- The removal of a person from the class of beneficiaries of a trust;
- The inclusion of specific sanctions-related clauses in a trust deed —
do not constitute sufficient grounds for automatically excluding assets from the scope of the sanctions regime.
Key Takeaway and a Broader Trend
The Court’s rulings once again confirm an important trend in European sanctions practice: when assessing ownership structures, increasing importance is being placed on the economic substance of legal relationships rather than on their formal legal construction.
In practice, the Court confirmed that a trust cannot be regarded as a universal mechanism for shielding assets from sanctions. If a person subject to restrictive measures retains actual influence over the assets, those assets may be frozen regardless of how the trust or corporate structure is formally arranged.
This approach is also consistent with the practice of English courts, which have previously emphasized the need to assess actual control over assets rather than relying solely on the legal rights set out in formal documentation.
What Does This Mean for Compliance and Business?
The new rulings are likely to have practical implications primarily for:
- Banks;
- Financial institutions;
- Trust administrators;
- Corporate service providers;
- Companies working with international ownership structures.
Changes to Compliance Checks:
- When conducting sanctions screening, it is no longer sufficient to analyse only the corporate structure or the terms of a trust deed. It is also necessary to assess whether a sanctioned person has the ability to influence the management of the assets, participate in key decision-making or derive an economic benefit from the relevant structure.
- This also means that KYC procedures, ultimate beneficial ownership checks and sanctions compliance processes will require a more comprehensive assessment of the underlying factual circumstances.
For international businesses, this is another reminder that trust and corporate structures can no longer be viewed as standalone instruments for minimising sanctions risks. The effectiveness of such mechanisms will be assessed primarily on the basis of their actual economic substance rather than their legal form.
Professional Legal Support
Every new decision of the European courts represents not only a development in legal practice but also a signal for businesses to review their own legal approaches and risk management mechanisms.
Our team continuously monitors key legislative and judicial developments to help clients adapt their corporate structures, internal procedures and business processes to current international legal requirements in a timely manner. If you would like to assess how these changes may affect your business, we would be pleased to provide professional legal support.