Ruling [EGC] ¦ EU Courts Cannot Review How Windfall Profits from Immobilised Russian Assets Are Spent

General Court declines jurisdiction over the use of Russian asset windfall profits

The General Court of the European Union, sitting as a Grand Chamber of fifteen judges, has dismissed Hungary’s action against the decision allocating the first instalment of windfall profits from immobilised Russian central bank assets to military support for Ukraine. In its judgment of 9 September 2026 in Case T-457/24, the Court held that the European Peace Facility (EPF) has legal capacity and can be sued, but that the contested decision reflects political and strategic choices under the Common Foreign and Security Policy, over which the EU courts have no jurisdiction.

From immobilised reserves to military support

On 28 February 2022, the Council prohibited all transactions related to the management of the reserves and assets of the Central Bank of Russia. That immobilisation led to an extraordinary and unexpected build-up of cash balances at central securities depositories in the EU. In May 2024, the Council adopted Decision (CFSP) 2024/1470, laying down how the net profits from those extraordinary revenues should be directed to support Ukraine, its recovery and reconstruction and its self-defence, and Decision (CFSP) 2024/1471, which allocated the share paid to the EPF to military support for the Ukrainian Armed Forces. The EPF Committee, made up of one representative per Member State, was to decide on the concrete distribution.

Hungary voted for the first decision but abstained constructively on the second under Article 31(1) TEU, which allows a Member State to abstain without blocking a CFSP decision. When the EPF Committee adopted the decision on the first instalment by written procedure on 21 June 2024, it took the view that Member States which had abstained constructively could not vote on its implementation. The decision allocated the money to an existing assistance measure and set indicative shares for ammunition and artillery, air defence systems and equipment from Ukraine’s own defence industry, to be delivered by the end of 2024.

Bastian Schwind-Wagner _Follow

"The windfall profits generated by immobilised Russian central bank assets are one of the most tangible financial consequences of the EU sanctions regime. This judgment confirms that, once the Council has decided to use them for Ukraine's defence, the concrete allocation is a political and strategic choice that the EU courts will not review, even on procedural grounds.

For financial institutions, the case changes nothing in day-to-day compliance: the immobilisation and the rules for skimming off the profits remain in place. It does show, however, how firmly the EU has anchored this mechanism in the CFSP, and how limited the legal avenues are for Member States, let alone private parties, to contest it."

Hungary’s complaint: excluded from the vote

Hungary did not attack the substance of the allocation. It argued that it had been unlawfully denied its right to vote, in breach of Article 31(1) TEU and the EPF voting rules, and that this violated the rule of law, the equality of Member States and the democratic functioning of the Union. Because the decision was never published, it also sought partial annulment of the minutes recording its adoption.

The first question was which court should hear the case. Actions by Member States against certain Council acts are reserved to the Court of Justice. The General Court found that the decision was adopted by the EPF Committee, not by the Council, and that the EPF has its own legal capacity, including the capacity to be a party to legal proceedings. Acts of its Committee therefore cannot be attributed to the Council, and the action belonged before the General Court.

Political and strategic choices are beyond judicial review

On jurisdiction, the Court applied the test the Court of Justice set out in 2024 in KS and Others v Council and Others. In principle, the EU courts have no jurisdiction over CFSP provisions and acts. There are two express exceptions: monitoring the boundary between the CFSP and other EU competences under Article 40 TEU, and reviewing restrictive measures against natural or legal persons. Beyond those, the courts have jurisdiction only where an act is not directly related to political or strategic choices made under the CFSP.

The contested decision did not concern sanctions against individuals or Article 40 TEU. And it was plainly a political and strategic choice: it decided how the windfall profits would be spent on military equipment for Ukraine and which assistance measure would be used. It implemented a Council decision that had identified the EU’s strategic interests, was adopted on the strategic orientation of the Political and Security Committee, and responded to an urgent Ukrainian request for lethal military equipment. The Court therefore declined jurisdiction.

Procedural complaints and effective remedies do not change the outcome

Hungary argued that its action concerned only the procedure, not the content of the decision, and that the rule of law and equality of Member States apply across all policy areas. The Court disagreed. The lack of jurisdiction over acts directly related to CFSP choices covers their external legality too, including how they were adopted. Hungary’s plea concerned only CFSP provisions, so earlier case-law allowing review of non-CFSP rules, such as the Treaty provisions on concluding international agreements, did not help. Substantive arguments about fundamental values, however important, cannot in themselves create jurisdiction.

Nor could Hungary rely on its right to an effective remedy. The absence of another judicial remedy cannot give the EU courts jurisdiction that the Treaties do not confer. The action was dismissed in its entirety, and Hungary was ordered to pay the costs of the EPF and the Council.

What it means for the immobilised-assets framework

The judgment does not touch the immobilisation of Russian central bank assets or the rules requiring central securities depositories to set aside the net profits. Those measures remain in place. What it confirms is that the downstream decisions on how the EU spends those profits through the EPF sit firmly within the CFSP and outside judicial review, at least as EU law currently stands.

For banks, custodians and depositories involved in holding or servicing the immobilised assets, compliance obligations are unchanged. The case is nonetheless a useful reminder that the legal architecture around the use of immobilised Russian assets is largely political, with decision-making in CFSP bodies and very limited scope for legal challenge, even by a Member State.

Dive deeper

• CURIA ¦ Case T-457/24 Hungary v Facilité européenne pour la paix and Council, Judgment of the General Court (Grand Chamber) of 9 September 2026 ¦ Link