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Sanctions and trusts: CJEU delivers two significant judgments

10/06/26

The Court of Justice of the European Union has handed down two judgments on the application of EU asset-freezing measures to trusts - Joined Cases C-428/24 and C-476/24 FZ AR SpA and SX Ltd v Ministero dell’Economia e delle Finanze and Others [2026] EU:C:2026:409 (“FZ AR”) and Case C-483/23 T Trust [2026] EU:C:2026:408 (“T Trust”).

Both cases arose out of administrative decisions by the Italian competent authority to freeze assets in various discretionary trusts. Those decisions were challenged in the domestic courts in Italy. The Regional Administrative Court in Lazio referred a number of questions to the CJEU concerning the application of the asset-freeze provision contained in Article 2(1) Regulation 269 to discretionary trusts. In particular, the Court was asked whether assets in a discretionary trust “belong” to or are “controlled” by a designated beneficiary or settlor.

Relying on its earlier rulings in Bank Sepah (C‑340/20, EU:C:2021:903) and HTTS Hanseatic Trade Trust v Council (C‑123/18 P, EU:C:2019:694) the Court concluded that, on a proper construction of Article 2(1), the asset freeze measure covers all legal and factual situations in which a listed person has the power to use, benefit from, dispose of, or influence the funds or economic resources concerned. On that broad application of Article 2(1), the Court found that trust assets may “belong to” or be “controlled by” a listed beneficiary or settlor of a discretionary trust within the meaning of Article 2(1).

The Court also held that a sanctions ‘compliance clause’ in the trust deed is not sufficient to prevent the trust assets from being frozen. The Court held that trust instruments can be private, amended, and complex trust structures may themselves indicate an attempt to circumvent sanctions.

The Court gave guidance to national courts on the factors to take into account when assessing whether a beneficiary or settlor had influence over the disposal of trust assets.

The FZAR judgment can be found here.

The T Trust judgment can be found here.

Ali Al-Karim acted for the Intervener (instructed by Omnia Strategy LLP) in the FZAR proceedings prior to the hearing.

All members of Brick Court Chambers are self employed barristers. Any views expressed are those of the individual barristers and not of Brick Court Chambers as a whole.