Putin’s autocratic regime not enough to freeze assets of Russia-linked companies, EU’s court rules

Published on
03/09/2026 – 11:41 GMT+2

The Court of Justice of the European Union (CJEU) ruled on Thursday that Russia’s autocratic regime alone cannot serve as sufficient justification for freezing the assets of companies indirectly associated with individuals subject to EU sanctions. Any such freezings require backing from concrete, reliable evidence.

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Brussels has currently blacklisted approximately 3,000 entities and individuals classified as part of the Russian industrial‑military complex involved in the invasion of Ukraine, with an extension set for 15 September.

The judgment imposes clear limits on how far national authorities may proceed when seizing the assets of entities not directly designated under EU sanctions but allegedly tied to a sanctioned person.

The case centers on Inter RAO Lietuva, a Lithuanian electricité provider that Lithuanian officials placed on the national asset‑freeze list despite lacking direct listing under EU sanctions targeting Russia.

Lithuanian authorities argued that the company’s ownership structure sufficiently connects it to sanctioned individuals: 51 % of its shares are held by RAO Nord, a Finnish‑registered company wholly owned by PJSC Inter RAO, a major Russian state‑controlled energy firm.

Because the company is ultimately controlled by the Russian state, Lithuanian regulators concluded it falls under the indirect authority of President Vladimir Putin, who himself bears EU sanctions.

The CJEU rejected that logic, holding that restrictive measures must be grounded in demonstrable control over the target entity, supported by objective and robust evidence.

Consequently, the ruling clarifies that the mere fact of Russia’s autocratic and oligarchic governance—granting Putin near‑unlimited power—does not, by itself, constitute adequate proof of his control over the company.

Nevertheless, authorities may consider all relevant information when assessing the effectiveness of any informal influence exerted by sanctioned persons or entities.

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