EU sanctions: two key CJEU judgments for companies and financial institutions

EU Restrictive Measures 

CJEU clarifies the broad scope of asset freezes and the notion of control

On 12 March 2026, the CJEU delivered two important judgments clarifying the scope of the EU restrictive measures and their implications for companies and financial institutions.

Taken together, these judgments confirm the CJEU’s broad and functional interpretation of EU restrictive measures whose purpose is also to prevent sanctioned persons from indirectly benefiting from assets or exercising influence on corporate structures.

Asset freezes may affect shareholder rights (SBK Art v Fortenova Group STAK Stichting; C-465/24)

The SBK Art judgment confirms that asset freezes may affect the exercise of shareholder rights where their exercise would allow a sanctioned person to obtain economic benefit from, or influence the use of, frozen assets.

In this case, a sanctioned shareholder holding certificates linked to shares in Fortenova Group challenged its exclusion from a meeting of certificate holders.

The question referred to the Court was whether the freezing of funds under EU restrictive measures prevents a sanctioned shareholder from exercising voting and participation rights attached to shares or share certificates.

The CJEU confirmed that the concept of “funds” and “economic resources” must be interpreted broadly in order to ensure the effectiveness of EU sanctions. Therefore, where the exercise of voting rights may enable a sanctioned person to influence corporate decisions or derive economic benefit from frozen assets, those rights may fall within the scope of the freezing obligation.

Presumption of control over companies partly owned by sanctioned persons (EM System; C-84/24)

This case concerned a Lithuanian company whose funds were frozen after one of its shareholders holding 50% of its capital, was added to the list of sanctioned entities in the context of the EU restrictive measures targeting Belarus (see Council Regulation (EC) No 765/2006).

Although the company EM System itself was not designated, some financial institutions considered that its funds should be frozen because the company could be regarded as owned or controlled by a listed person.

The CJEU confirmed that:

-          a 50% shareholding held by a sanctioned person may create a presumption of control; and

-          the funds of the company could, therefore, be treated as subject to the asset-freezing obligation.

But, the Court also clarified that this presumption is rebuttable. A non-listed entity must have the opportunity to demonstrate that its funds are not in fact controlled by the listed person.

Key Findings

These judgments provide important clarification on the practical implementation of EU restrictive measures:

1. A broad and functional approach to restrictive measures: the restrictive measures must be interpreted in light of their anti-circumvention objective, covering situations where sanctioned persons could otherwise retain influence or economic benefit through corporate structures.

2. Impact on corporate governance: sanctioned shareholders may be prevented from exercising certain corporate rights, including voting or participation rights, where their exercise could undermine the effectiveness of asset freezes.

3. Increased compliance scrutiny of ownership structures: financial institutions and companies should carefully assess shareholding structures and governance rights, particularly where sanctioned persons hold significant minority stakes.

4. Litigation: the presumption of control is rebuttable, preserving the right of affected entities to demonstrate the absence of control.

These rulings also illustrate the CJEU’s increasingly strict approach to preventing circumvention of EU sanctions.

Sources : EUR-Lex - 62024CJ0465 - EN - EUR-Lex and EUR-Lex - 62024CJ0084 - EN - EUR-Lex.

For more information, please contact Bruno Lebrun – Partner – b.lebrun@janson.be.