123Sanctions
CJEU Confirms Asset Freeze Against Russian Businesspersons
On 26 March 2026, the Court of Justice of the European Union (CJEU) dismissed all appeals in Joined Cases C-696/23 P (Pumpyanskiy v Council), C-704/23 P (Khudaverdyan v Council), C-711/23 P (Rashnikov v Council), C-35/24 P (Mazepin v Council) and C-111/24 P (Khan v Council), thereby confirming the freezing of funds imposed on five prominent businesspersons operating in Russia.
The appellants had been designated under the EU's sanctions legislation, i.e. Council Decision 2014/145/CFSP, as amended by Council Decision (CFSP) 2022/329 of 25 February 2022, which targets leading businesspersons involved in economic sectors providing a substantial source of revenue to the Russian Government. After their actions were dismissed by the General Court in 2023, all five appealed before the CJEU.
In its judgment, the Court provided several important clarifications. First, it held that it is the economic sectors — not the individual businesspersons — that must provide a substantial source of revenue to the Russian Government. Second, the Court clarified that the concept of "influence" of the designated persons must be assessed in light of the economic context in which they operate, irrespective of any direct link to the Russian Government. Their significant importance for the Russian economy is sufficient to establish that they are likely to further, indirectly, the financing of destabilising actions against Ukraine.
The Court further confirmed that a listing criterion is lawful provided it targets categories of persons that have an objective link — even if indirect and independent of personal conduct — with the third country subject to sanctions. In these cases, the CJEU found such an objective link between important businesspersons in sectors lucrative for Russia and the EU's objective of increasing pressure on the country.
Finally, on proportionality, the Court applied the standard of manifest inappropriateness, confirming that the measures are neither manifestly inappropriate for the legitimate objective pursued nor manifestly exceeding what is necessary to achieve it.
The judgment reinforces the broad scope of the EU's Russia-related restrictive measures and signals that judicial challenges based on the absence of direct governmental links are unlikely to succeed where the sectoral revenue criterion is met.
Sources:
- CJEU Press Release No 48/26, 26 March 2026
The appellants had been designated under the EU's sanctions legislation, i.e. Council Decision 2014/145/CFSP, as amended by Council Decision (CFSP) 2022/329 of 25 February 2022, which targets leading businesspersons involved in economic sectors providing a substantial source of revenue to the Russian Government. After their actions were dismissed by the General Court in 2023, all five appealed before the CJEU.
In its judgment, the Court provided several important clarifications. First, it held that it is the economic sectors — not the individual businesspersons — that must provide a substantial source of revenue to the Russian Government. Second, the Court clarified that the concept of "influence" of the designated persons must be assessed in light of the economic context in which they operate, irrespective of any direct link to the Russian Government. Their significant importance for the Russian economy is sufficient to establish that they are likely to further, indirectly, the financing of destabilising actions against Ukraine.
The Court further confirmed that a listing criterion is lawful provided it targets categories of persons that have an objective link — even if indirect and independent of personal conduct — with the third country subject to sanctions. In these cases, the CJEU found such an objective link between important businesspersons in sectors lucrative for Russia and the EU's objective of increasing pressure on the country.
Finally, on proportionality, the Court applied the standard of manifest inappropriateness, confirming that the measures are neither manifestly inappropriate for the legitimate objective pursued nor manifestly exceeding what is necessary to achieve it.
The judgment reinforces the broad scope of the EU's Russia-related restrictive measures and signals that judicial challenges based on the absence of direct governmental links are unlikely to succeed where the sectoral revenue criterion is met.
Sources:
- CJEU Press Release No 48/26, 26 March 2026