EU sanctions: Company board may include Russian administrators if they do not control the company (CJEU, 12 February 2026, C-313/24)
Background: An Italian company, Scudieri International, was awarded a public contract by Italian authorities. Two of its three board members were Russian nationals, one of whom was also the sole administrator of the parent company. A competitor challenged the award, arguing it violated EU restrictive measures.
Question referred to the CJEU: Does the prohibition apply to an EU-based company, whose shareholders are not Russian, but whose board members are Russian nationals holding key positions?
On 12 February 2026, the Court of Justice of the European Union (“CJEU”) decided that the mere presence of Russian board members is not sufficient to trigger the prohibition of Article 5 k(1)(c). The latter would only apply if it is demonstrated that the board members effectively control the company, creating a plausible risk that public funds could be diverted to the Russian economy.
Key Criteria:
Comprehensive review by authorities: ownership structure, personal/professional links, past coordination with sanctioned entities, etc.
Risk of diversion: Evidence must show that public funds could be used to finance Russia’s aggression in Ukraine.
No presumption: Russian nationality of board members alone does not create a prohibition.
Why this judgment matters
Enhanced Legal Certainty: Public authorities and economic operators have clear guidelines on how to assess the risk of circumvention.
Case-by-case Assessment: The CJEU requires a concrete assessment based on concrete evidence (effective control, risk of diversion).
Impact on Public Procurement: Contracting authorities must document their assessment of links between bidders and sanctioned entities, using objective criteria (control structure, track record, etc.).
Political Signal: The ruling reaffirms that sanctions aim to deprive Russia from financial resources for its aggression in Ukraine, without unduly penalizing legitimate EU businesses.
This ruling is an interesting signal as it provides a clear roadmap for public and private actors, while ensuring that efforts to prevent sanctions circumvention remain proportionate and evidence-based.
Sources : EUR-Lex - 62024CJ0313 - EN - EUR-Lex
For more information, please contact Bruno Lebrun – Partner – b.lebrun@janson.be
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