The Court of Justice of the European Union has confirmed that asset freezes imposed under the EU's sanctions regime against Russia can extend to assets held through trusts. The decision settles a question that practitioners advising designated individuals and their counterparties have raised since the restrictive measures were first imposed: whether assets routed through fiduciary or nominee structures fall within the reach of a freezing order.

The court's holding is straightforward in its operative effect. A freeze on the assets of a designated person is not limited to property registered in that person's own name. Where assets are held by a trust — a structure in which legal title sits with trustees for the benefit of beneficiaries — those assets can still count as assets of the designated individual and can therefore be frozen.

For trusts professionals, private client lawyers, and financial institutions, the consequence is significant. The ruling means that designation has a functional rather than a purely formal scope. Looking only at the name on a register or account is not enough. Institutions and advisers must trace beneficial ownership through fiduciary arrangements to determine whether frozen funds are implicated.

The decision matters because trusts are a common feature of wealth structuring for high-net-worth individuals, including a number of Russian nationals designated under the EU's Russia sanctions framework adopted in response to the invasion of Ukraine. Designated persons frequently hold interests through layers of nominees, corporate vehicles, and trustees. If freezing obligations stopped at formal title, the measures would be straightforward to circumvent: a designated oligarch could simply transfer assets into a trust and continue to enjoy their benefit.

The court has now confirmed that this route offers no escape. The freeze attaches to the economic reality of ownership and control, not merely to its legal form.

What this means in practice

For compliance teams at banks, custodians, and investment firms, the judgment reinforces the need for beneficial-ownership screening that captures trust structures. A client relationship that appears clean on the surface may still touch frozen assets if a designated person sits behind the structure as settlor, beneficiary, or person exercising effective control.

For trustees and private wealth advisers, the ruling carries direct exposure. Trustees holding assets traceable to a designated person must treat those assets as frozen. Making funds available to a designated beneficiary — or allowing a designated settlor to direct the trust's affairs — risks a breach of the EU sanctions regime, which carries penalties set at national level and, in several member states, includes criminal liability for knowing violations.

For litigators, the judgment provides authority for arguing breadth of scope in freezing measures: the instrument targets assets, however held, in which the designated person retains an interest. Respondents can no longer rely on the formal separation of legal and beneficial title as a shield.

The wider picture

The decision fits a broader pattern in sanctions enforcement across the EU, the UK, and the US. Regulators and courts on both sides of the Atlantic have increasingly looked through corporate and fiduciary structures to identify the assets of designated persons. Enforcement authorities have seized yachts, real estate, and financial holdings held through intermediate vehicles, on the basis that the beneficial owner was designated.

The EU's Russia sanctions listings have been subject to heavy litigation before the EU courts in Luxembourg, with designated individuals challenging both their listings and the interpretation of the measures. This ruling narrows one of the remaining interpretive defences: the argument that assets held in trust sit outside the freeze.

Practitioners advising on EU sanctions compliance should review existing trust structures connected to any designated person, assess reporting obligations to national competent authorities, and update client screening protocols to capture fiduciary holdings. The court has made clear that the architecture of ownership matters less than its substance.