On 3 September, the Court of Justice of the European Union clarified the mechanism for freezing assets at national level. The practice has spread with the application of EU sanctions but remains poorly defined, at both EU and domestic levels.
William Julié discussed the Court’s ruling with Andrew Rettman for EUobserver.
In this case (C-147/25), a preliminary reference from the Lithuanian courts, the funds of an independent electricity importer had been frozen in 2022 as indirectly linked to a listed person, the President of the Russian Federation.
The Court was called upon to specify the framework within which Member States may freeze the assets of a person not subject to sanctions, on the grounds that those assets are “held, owned or controlled by” a listed person, within the meaning of Article 2(1) of Council Decision 2014/145/CFSP of 17 March 2014.
It reaffirmed that such a measure is not a national sanction but a measure implementing EU law. The same procedural safeguards apply as to an EU measure, including the duty to state reasons.
For the first time, the Court held that a mere “link” is not enough. National authorities must establish, on the basis of objective and sufficiently solid evidence, or at least a body of indicia objectively substantiating the alleged situation, that the funds actually belong to, or are held or controlled by, a listed person. The autocratic and oligarchic character of the Russian regime, and the de facto power it confers on the President over economic actors, does not in itself constitute such evidence. It may nonetheless weigh in the overall assessment.
The discussion also covered the broader state of sanctions litigation.
Listed persons and entities continue to seek judicial review whenever they consider their listing unfounded, with no sign of diminishing appetite. William Julié welcomes this. In his view, justice is administered by reference to legal rules, which are either complied with or not. Politics has no place in a courtroom.
The volume of litigation before the EU Courts could nonetheless shift with the proposal just sent to the Member States. It would add 1,600 Russian individuals and entities to a list of over 3,000, and extend renewal cycles from six to twelve months. The first change would increase the sanctioned population by more than half in a single step, each addressee having its own right of action. The second would halve the number of maintenance acts open to challenge. Which effect prevails will depend on what the Council adopts.