𝗘𝗨 𝗦𝗮𝗻𝗰𝘁𝗶𝗼𝗻𝘀 & 𝗧𝗿𝘂𝘀𝘁 𝗦𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗲𝘀 | 𝗖𝗝𝗘𝗨 𝗟𝗮𝗻𝗱𝗺𝗮𝗿𝗸 𝗥𝘂𝗹𝗶𝗻𝗴(𝗙𝗿𝗲𝗲𝘇𝗶𝗻𝗴 𝗼𝗳 𝗮𝘀𝘀𝗲𝘁𝘀 𝗶𝗻 𝘁𝗿𝘂𝘀𝘁)

𝗘𝗨 𝗦𝗮𝗻𝗰𝘁𝗶𝗼𝗻𝘀 & 𝗧𝗿𝘂𝘀𝘁 𝗦𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗲𝘀 | 𝗖𝗝𝗘𝗨 𝗟𝗮𝗻𝗱𝗺𝗮𝗿𝗸 𝗥𝘂𝗹𝗶𝗻𝗴(𝗙𝗿𝗲𝗲𝘇𝗶𝗻𝗴 𝗼𝗳 𝗮𝘀𝘀𝗲𝘁𝘀 𝗶𝗻 𝘁𝗿𝘂𝘀𝘁)

The Court of Justice of the European Union has delivered on 21 May 2026 three significant judgments with far-reaching implications for 𝘀𝗮𝗻𝗰𝘁𝗶𝗼𝗻𝘀 𝗰𝗼𝗺𝗽𝗹𝗶𝗮𝗻𝗰𝗲, 𝘁𝗿𝘂𝘀𝘁 𝘀𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗶𝗻𝗴, 𝗮𝗻𝗱 𝗮𝘀𝘀𝗲𝘁 𝗺𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁 𝗮𝗰𝗿𝗼𝘀𝘀 𝘁𝗵𝗲 𝗘𝗨.

𝙱̲𝚊̲𝚌̲𝚔̲𝚐̲𝚛̲𝚘̲𝚞̲𝚗̲𝚍̲
All three cases arose from Italian enforcement actions involving the freezing of funds and economic resources held indirectly through trust structures linked — in some instances loosely — to individuals subject to EU restrictive measures adopted in response to Russia’s military aggression against Ukraine.

The central legal question referred to the CJEU by the Italian administrative courts was whether the concepts of “belonging to” and “control” under Article 2 of Council Regulation (EU) No 269/2014 could be extended to capture settlors or beneficiaries of a trust, even in circumstances where the trustee lacks the formal power to dispose of the assets.

𝚃̲𝚑̲𝚎̲ ̲𝙲̲𝚘̲𝚞̲𝚛̲𝚝̲’̲𝚜̲ ̲𝙵̲𝚒̲𝚗̲𝚍̲𝚒̲𝚗̲𝚐̲𝚜̲
The CJEU ruled that these concepts must be interpreted broadly and purposively, so as to encompass all forms of power or influence exercised over assets — including where no formal legal link exists between those assets and the sanctioned person. Assets may accordingly be regarded as belonging to, or under the control of, a settlor or beneficiary where that person has the power to use, benefit from, or dispose of those resources, or to exert influence over the decisions of the trustee.

Critically, the Court confirmed that evidence of such belonging or control may be inferred from factual circumstances or from the presence of needlessly complex legal structures, including:

– The beneficiary or settlor holding a majority of capital or voting rights in the trustee entity;
– Entities being incorporated or restructured shortly before sanctions come into force;
– Close relationships between directors of frozen companies and the sanctioned individual.

This ruling has direct and immediate consequences for practitioners, compliance officers, and clients operating trust structures with any nexus to sanctioned individuals. Formal legal distancing — such as removing a settlor from the list of beneficiaries — will not suffice to avoid a freezing measure where de facto influence or benefit persists in practice. The complexity of a corporate or trust structure does not afford protection; on the contrary, it may itself constitute evidence of an attempt to circumvent sanctions. Competent national authorities retain broad discretion to look through legal form and assess economic substance and practical control.