Ruling [CJEU] ¦ Sanctions, Trusts and Control: CJEU Confirms That Asset Freezes Can Reach Trust Property

A significant ruling for sanctions compliance

The Court of Justice of the European Union (CJEU) has issued an important judgment in Case C-483/23 on the application of EU Russia sanctions to assets placed in a trust. The ruling concerns Article 2(1) of Regulation (EU) No 269/2014, the EU asset freezing regime adopted in response to actions undermining Ukraine’s territorial integrity, sovereignty and independence.

The key point is clear: placing assets into a trust does not automatically protect them from an EU asset freeze where the settlor is listed under EU sanctions. If the listed settlor continues to have power to use, benefit from, dispose of, or influence the assets or the trustee’s decisions, those assets may still be treated as belonging to or controlled by the settlor.

For financial crime, sanctions and private wealth professionals, the judgment is highly relevant. It confirms that authorities and firms must look beyond formal legal title and examine the real substance of control, benefit and influence.

The facts behind the case

The dispute arose in Italy. Four Italian companies, identified in the judgment as A, B, C and D, were active in property, car rental, garaging and seasonal tourist support services. Those companies were controlled by a parent company registered in Bermuda. The parent company had been placed into a trust created by a settlor who was later listed under EU restrictive measures.

The trust was governed by Bermuda law. The trustee was a Swiss trust company. The structure also included a protector, whose role was to oversee implementation of the trust arrangements, and an appointor, who could appoint additional or replacement protectors.

The settlor had originally been one of the beneficiaries of the trust. Later, before his EU listing, he was excluded from the group of beneficiaries. The referring Italian court stated that, at the time of the request for a preliminary ruling, the settlor did not appear to have powers to manage or use the assets held in the trust and was no longer entitled to receive trust assets under the trust instrument.

Despite this, the Italian Financial Security Committee froze the shares and assets of the four Italian companies. The authorities considered those assets to be indirectly attributable to the listed settlor, relying in part on information indicating that he was the beneficial owner of the companies.

The companies and the trustee challenged the freezing measure before the Regional Administrative Court of Lazio. The Italian court then asked the CJEU how Article 2(1) of Regulation No 269/2014 should be interpreted in the context of trust assets.

Bastian Schwind-Wagner _Follow

"The CJEU has confirmed that assets placed in a trust by a listed settlor may still be frozen under EU sanctions rules. The key issue is whether the settlor retains practical power to use, benefit from, dispose of or influence the assets or the trustee’s decisions.

This ruling reinforces a substance-over-form approach to sanctions compliance. Firms should look beyond legal title and assess the real control, benefit and influence behind trust and holding structures."

The legal question

Article 2(1) of Regulation No 269/2014 requires the freezing of all funds and economic resources “belonging to, owned, held or controlled by” listed persons, entities or bodies, or persons, entities or bodies associated with them.

The issue was whether assets placed in a trust by a listed settlor could still be treated as belonging to or controlled by that settlor, even where formal title stood in the name of the trustee and the settlor had been removed as a beneficiary.

The referring court also asked whether, if the assets did not belong to or fall under the control of the settlor, they could be frozen on the basis that they belonged to a person associated with the settlor.

The CJEU answered the first and third questions together and found it unnecessary to answer the second.

The Court’s answer

The Court held that Article 2(1) must be interpreted as meaning that funds and economic resources placed in a trust by a listed settlor must be regarded as belonging to or controlled by that settlor, provided the settlor continues to hold power enabling him or her to use, benefit from or dispose of those assets, or to influence them or the trustee’s decisions concerning them.

This is a substance-based test. The Court did not say that every trust settled by a listed person is automatically frozen in all circumstances. Instead, the test is whether the listed settlor retains practical power, benefit or influence over the trust assets.

The judgment is therefore not simply about legal ownership. It is about whether the listed person can still exercise meaningful power over the assets, either directly or indirectly.

Formal ownership is not decisive

A central feature of a trust is the separation between legal ownership and beneficial ownership. Under the Hague Trusts Convention, trust assets are placed under the control of a trustee for the benefit of beneficiaries or for a specified purpose. Title to the assets may stand in the name of the trustee, while the assets remain separate from the trustee’s personal estate.

The Court recognised that structure. However, it also made clear that formal title is not enough to determine whether sanctions apply.

The Court stated that Article 2(1) covers a range of legal and factual relationships between the listed person and the assets. These relationships include ownership, possession, holding and control, but they also extend to situations where a person has de facto power over assets or can benefit from them.

In other words, a person cannot avoid an asset freeze merely by transferring formal title to a trustee if, in practice, that person still has influence, access or benefit.

Why the ruling matters for financial crime compliance

The judgment is important because trusts, foundations, holding companies and other private wealth structures are often used legitimately, but can also create opacity. Sanctions screening based only on registered legal ownership may miss situations where a listed person retains actual influence or benefit.

The Court expressly recognised that trusts can be used for lawful purposes. It also noted that their private nature, flexibility and capacity for structural complexity can make them useful for concealing links between a settlor and assets.

For sanctions compliance teams, this means that ownership analysis cannot stop at the trustee. The relevant question is who can use, enjoy, influence or recover the assets.

Where a listed person has settled assets into a trust, firms should assess the trust deed, amendments, letters of wishes where available, protector powers, appointment and removal rights, beneficiary changes, side agreements, and the practical conduct of the parties.

Indicators of retained control

The Court gave useful guidance on what national authorities and courts may consider when assessing whether a listed settlor retains control or influence.

Relevant factors may include whether the settlor has the power to revoke the trust in whole or in part, whether the settlor can give binding instructions to the trustee, and whether the settlor can influence investment decisions concerning trust assets.

The analysis may also consider whether the settlor can appoint, remove or replace trustees or protectors, add or exclude beneficiaries, or make himself or herself a beneficiary again.

The Court also stressed that influence may exist even where it is not written into the trust documents. This is especially important because trust instruments and amendments may not be public and may be changed over time.

The relationship between the settlor and the trustee, protector or other parties is therefore highly relevant. If the trustee or protector is professionally, personally or economically close to the settlor, and is likely to follow the settlor’s wishes, this may support a finding of control.

Beneficial ownership and sanctions are connected, but not identical

The judgment refers to the concept of “beneficial owner” in Directive 2015/849, the EU anti-money laundering directive. That directive treats the settlor, trustee, protector, beneficiaries and any other person exercising ultimate control over a trust as beneficial owners for AML purposes.

The Court noted that this AML concept reflects the separation between legal ownership and beneficial ownership in trust structures. However, Regulation No 269/2014 does not itself use the term “beneficial owner”.

This distinction matters. A person may be recorded as a beneficial owner for AML purposes, but the sanctions question still requires analysis under Article 2(1): do the assets belong to, are they owned, held or controlled by the listed person?

The judgment shows that AML beneficial ownership data can be relevant evidence, but it is not the end of the sanctions analysis.

Practical consequences for firms

Banks, trustees, corporate service providers, lawyers, accountants, real estate agents and other obliged entities should treat this ruling as a prompt to strengthen sanctions due diligence on trusts and similar structures.

Where a trust includes, or previously included, a listed person as settlor or beneficiary, firms should not rely only on the current beneficiary list. They should assess the history of the structure, the timing of amendments, the identity and independence of trustees and protectors, and whether assets continue to be used for the benefit of the listed person or connected entities.

The timing of changes is especially important. Amendments made shortly before or shortly after sanctions designation may require careful review. A removal of the settlor as beneficiary may be genuine, but it may also be cosmetic if the settlor retains informal influence or a practical route back to benefit.

The ruling also supports the view that complex structures involving trusts, shell companies and offshore entities should receive closer scrutiny where there is a sanctions nexus.

A substance-over-form approach

The Court’s reasoning fits a wider trend in EU sanctions enforcement. Authorities are increasingly focused on substance rather than labels. Legal title, corporate registration and formal control rights remain relevant, but they are not decisive where the facts show that a listed person can still benefit from or influence the assets.

The judgment also reinforces the anti-circumvention purpose of EU sanctions. Article 9 of Regulation No 269/2014 prohibits knowing and intentional participation in activities whose object or effect is to circumvent asset freezing measures. A narrow reading of Article 2(1) would risk weakening that prohibition by allowing listed persons to shelter assets behind trust arrangements.

The Court avoided that result by confirming that trust assets can be frozen where the listed settlor retains real power, benefit or influence.

The bottom line

The CJEU has confirmed that trust structures do not provide a safe harbour from EU asset freezes. If a listed settlor continues to have practical power over trust assets, or influence over the trustee’s decisions, those assets may be treated as belonging to or controlled by the settlor under Article 2(1) of Regulation No 269/2014.

Sanctions compliance must examine who really controls, benefits from or influences the assets, not just whose name appears on the legal title.

Dive deeper

• InfoCuria ¦ Judgment, 21/05/2026, T Trust, C-483/23, ECLI:EU:C:2026:408 ¦ Link
• EUR-Lex ¦ Case C-483/23, Judgment of the Court (First Chamber) of 21 May 2026 ¦ Link
• EUR-Lex ¦ Council Regulation (EU) No 269/2014 ¦ Link
• EUR-Lex ¦ Directive (EU) 2015/849 ¦ Link
• Hague Conference on Private International Law (HCCH) ¦ Hague Trusts Convention ¦ Link