Application Of EU Sanctions Law To Trust Structures (CJEU Cases C-483/23, C-428/24 And C-476/24

May 2026 – How does Article 2(1) of Regulation (EU) No 269/2014 apply to assets placed in trust structures, where either the settlor or the beneficiary is a listed person? In its judgements of 21 May 2026, the CJEU has made clear that EU asset-freeze rules under Article 2(1) of Regulation 269/2014 apply to trust assets not only based on formal legal title but based on substantive ownership or control.

In Case C-483/23, the Italian authorities froze the shares and assets of four Italian companies indirectly linked to a trust created by a settlor who had later been listed under Annex I to Regulation 269/2014, even though the parties argued that he had already been removed from the circle of beneficiaries. In Joined Cases C-428/24 and C-476/24, the litigation concerned an Italian company and a yacht held through trust structures where the relevant listed person appeared as beneficiary, while the applicants relied on the discretionary nature of the trusts and on compliance clauses designed to prevent any enjoyment or disposition in favour of that beneficiary during the listing period. In each case, the core issue was whether trust assets may still be treated as “belonging to” or being “controlled” by a listed person, despite the formal separation of trust property under the applicable trust law.

In case C-483/23, the CJEU states clearly that funds and economic resources contributed to a trust must be treated as belonging to, or being controlled by, the settlor where that settlor still retains powers enabling use of the assets, enjoyment of benefits, disposal, or influence over the assets or over the trustee’s decisions. The Court emphasised that one must assess not only the governing trust law but also the factual relationship between the settlor and the trustee, protector, beneficiaries, and the wider structure, including informal influence, power to appoint or remove functionaries, recapture mechanisms, and the use of complex structures or professional trustees as indicia of continuing control.

In Joined Cases C-428/24 and C-476/24, the court extended the same functional approach to listed beneficiaries. Trust assets may be regarded as belonging to, or being controlled by, the beneficiary even where the applicable trust law or a sanctions-compliance clause formally prohibits that beneficiary from using or disposing of the trust assets during the listing period. Such clauses are therefore not determinative. The decisive question remains whether the beneficiary can in reality use the assets, derive benefit from them, dispose of them, or exert influence over the assets or the trustee’s choices. The court expressly linked this interpretation to the anti-circumvention objective of Article 9 of Regulation 269/2014 and to the need to preserve the effectiveness of Article 2(1) and Article 2(2) of Regulation 269/2014, so that trusts cannot be used as opacity-enhancing vehicles to neutralise EU sanctions.

Taken together, the rulings establish a "substance-over-form test" for trusts under EU sanctions law that reduces the utility of discretionary trusts, compliance clauses, layered offshore vehicles, and nominee arrangements as shielding devices where factual influence persists. Thus, where a listed settlor or beneficiary retains practical influence, economic enjoyment, decisive relational leverage, or a realistic pathway to re-access, redirect, or benefit from the assets, such assets are liable to be frozen.

A trust does not immunise assets merely because title is vested in a trustee or because the deed contains a compliance clause. Thus, where a listed settlor or beneficiary retains practical influence, economic enjoyment, decisive relational leverage, or a realistic pathway to re-access, redirect, or benefit from the assets, those assets are liable to be frozen.

Significance in practice

• A trust does not immunise assets merely because title is vested in a trustee or because the deed contains a compliance clause.
• Competent authorities and obliged entities will be expected to conduct a reality-based control analysis rather than rely on formal trust-law separations.
• Litigation will likely focus on evidentiary indicators of influence, benefit, and circumvention in the concrete structure at issue.
• Therefore, granular review of trust deeds, amendment powers, protector rights, appointment and removal powers, beneficial enjoyment, actual governance patterns, and any evidence that the trust structure operates for the benefit of, or under the influence of, the listed person will be required!

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.