Restrictive measures : Trusts do not prevent the freezing of assets linked to a listed settlor or beneficiary (CJEU Cases C-428/24 & C-476/24 and C-483/23 of 21 May 2026)
On 21 May 2026, the CJEU clarified how assets held through trust structures must be assessed under Article 2 of Regulation (EU) No 269/2014.
The Court held that the notions of funds and economic resources "belonging to", "owned", "held" or "controlled" by a designated person are autonomous concepts of EU law and must be interpreted in light of the objectives of the EU restrictive measure. National courts must, therefore, look beyond the formal architecture of a trust and assess whether the listed person retains practical influence over, or derives economic benefit from, the relevant assets.
(See Cases C-428/24 and C-476/24, and Case C-483/23).
CJEU decides substance over form
The Court rejected a purely formal analysis based on trust documentation. Whether the assets held in trust must be frozen depends on a factual assessment of all relevant circumstances, including:
the powers effectively retained by the listed person over the trust;
the degree of influence exercised over trustees, protectors or trust administrators;
the economic benefit derived from the trust assets;
where companies are contributed to the trust: the powers of their directors and their links to the listed person;
the timing and purpose of any restructuring undertaken before or after designation.
The Court emphasised that trust-law cannot undermine the effectiveness of EU restrictive measures or facilitate circumvention. Unnecessarily complex structures are themselves treated as an indicator of control.
Beneficiary trusts: compliance clauses are not decisive
In joint cases C-428/24 and C-476/24, the trusts were irrevocable discretionary trusts governed by Bermuda law. The trust instruments contained clauses prohibiting distributions to the beneficiary while that person remained subject to EU restrictive measures. The Court held that such clauses cannot be decisive seeing that trust deeds are private documents, not subject to any obligation of public disclosure, that their terms can be amended at any time and that unilateral commitments can be revoked.
The existence of formal restrictions on distribution does not eliminate the need to determine whether the designated beneficiary continues, in practice, to benefit from or exercise influence over the trust assets. Nor does the prohibition on making funds available under Article 2(2) of Regulation (EU) No 269/2014 replace the separate obligation to freeze assets under Article 2(1) of Regulation (EU) No 269/2014.
Settlor trusts: exclusion from the beneficiary class is not conclusive
In case C-483/23, the designated settlor had been removed from the class of beneficiaries before his listing. The Court, nevertheless, held that this fact alone cannot preclude a finding that the assets remain attributable to the settlor for the purposes of Article 2(1) of Regulation (EU) No 269/2014.
National courts must examine whether the settlor continues to retain powers capable of conferring influence over the trust structure, including powers relating to trustees, protectors, beneficiaries, or the administration of trust assets. In this respect, the Court noted that powers such as the power to revoke the trust, to give binding instructions to the trustee, and to appoint or remove trustees and protectors are indicators of continued control whether or not they are expressly mentioned in the trust deed, and may subsist even after formal exclusion from the beneficiary class.
These judgments confirm that national authorities enforcing EU restrictive measures and national courts must assess trust arrangements on the basis of economic reality rather than formal legal qualification.
Source : EUR-Lex - 62024CJ0428 - EN - EUR-Lex and EUR-Lex - 62023CJ0483 - EN - EUR-Lex.
For more information, please contact: Bruno Lebrun – Partner – b.lebrun@janson.be.