123Sanctions
CJEU: Frozen Funds Bar Sanctioned Entities From Exercising Shareholder Voting Rights
On 12 March 2026, the Court of Justice of the European Union (CJEU) delivered its judgment in Case C-465/24 (SBK Art), ruling that the freezing of funds under EU sanctions law prevents a sanctioned entity from attending a general meeting of shareholders and from exercising voting rights — absolutely and unconditionally.
The case arose from a dispute in the Netherlands involving SBK Art, an indirect subsidiary of the sanctioned Russian bank Sberbank. SBK Art held 41.82% of depositary receipts in Fortenova GroupTopCo, a holding company linked to a Croatian retail and agriculture group. When the administrator of those depositary receipts convened a general meeting in August 2022, it excluded SBK Art from participation and voting on account of EU restrictive measures. SBK Art challenged the exclusion through interim proceedings, which led the Supreme Court of the Netherlands to refer the matter to the CJEU for a preliminary ruling on the interpretation of "freezing of funds" under Regulation (EU) No 269/2014.
The Court held that depositary receipts constitute "funds" within the meaning of Article 1(f) of Regulation No 269/2014. It found that exercising the right to attend and vote at a shareholder meeting qualifies as "use of funds," since such actions lead to decisions that necessarily affect the state and functioning of the company — and, consequently, at least indirectly, its value and the estimated value of the instruments held by the sanctioned party. The Court emphasised that any less strict interpretation would undermine the objective of the asset freeze regime, which aims to limit as far as possible the transactions that can be carried out with frozen funds.
This ruling has significant practical implications for corporate governance structures involving sanctioned shareholders across the EU. Companies and compliance officers should note that the prohibition extends not only to financial transactions but also to participatory rights attached to frozen instruments. The judgment reinforces the broad scope of EU asset freeze obligations and confirms that "use" of funds encompasses non-financial acts that may indirectly affect the value of frozen assets.
Source: Court of Justice of the European Union, Press Release No 35/26, 12 March 2026 — Judgment of the Court in Case C-465/24 | SBK Art (curia.europa.eu).
The case arose from a dispute in the Netherlands involving SBK Art, an indirect subsidiary of the sanctioned Russian bank Sberbank. SBK Art held 41.82% of depositary receipts in Fortenova GroupTopCo, a holding company linked to a Croatian retail and agriculture group. When the administrator of those depositary receipts convened a general meeting in August 2022, it excluded SBK Art from participation and voting on account of EU restrictive measures. SBK Art challenged the exclusion through interim proceedings, which led the Supreme Court of the Netherlands to refer the matter to the CJEU for a preliminary ruling on the interpretation of "freezing of funds" under Regulation (EU) No 269/2014.
The Court held that depositary receipts constitute "funds" within the meaning of Article 1(f) of Regulation No 269/2014. It found that exercising the right to attend and vote at a shareholder meeting qualifies as "use of funds," since such actions lead to decisions that necessarily affect the state and functioning of the company — and, consequently, at least indirectly, its value and the estimated value of the instruments held by the sanctioned party. The Court emphasised that any less strict interpretation would undermine the objective of the asset freeze regime, which aims to limit as far as possible the transactions that can be carried out with frozen funds.
This ruling has significant practical implications for corporate governance structures involving sanctioned shareholders across the EU. Companies and compliance officers should note that the prohibition extends not only to financial transactions but also to participatory rights attached to frozen instruments. The judgment reinforces the broad scope of EU asset freeze obligations and confirms that "use" of funds encompasses non-financial acts that may indirectly affect the value of frozen assets.
Source: Court of Justice of the European Union, Press Release No 35/26, 12 March 2026 — Judgment of the Court in Case C-465/24 | SBK Art (curia.europa.eu).