12.09.2026 Regulation #EU #Russia #Import #Export #Sanctions
EU top court raises evidence bar for freezing Russia-linked assets
The Court of Justice of the European Union delivered its judgment in Case C-147/25 Inter Rao Lietuva on 3 September 2026, formally limiting the ability of national authorities to freeze a company's assets solely because of its Russian ownership or the autocratic character of Russia's political system. Press release No 116/26 states plainly: the fact that Russia's regime is "autocratic and oligarchic," giving the president "de facto unlimited powers" over economic operators, does not by itself amount to "sufficiently solid evidence" that he controls a specific company (curia.europa.eu).
How Lithuania justified the freeze
Inter Rao Lietuva operated in Lithuania as an independent electricity importer and supplier. In 2022 its funds were frozen by the Financial Crime Investigation Service (FNTT), which listed the company as linked to the President of Russia under Council Regulation (EU) No 269/2014 and Council Decision 2014/145/CFSP as amended in 2022 (curia.europa.eu). The listing rested on the company's indirect ownership by Russia's Inter RAO, whose major shareholders are themselves indirectly state-controlled: according to LRT and Euronews, 51% of Inter Rao Lietuva is held by Finland-registered RAO Nordic, wholly owned by Russian Inter RAO (LRT, Euronews). LRT reports FNTT restricted the company's banking transactions in March 2022 and froze its funds, shares and real estate in May 2022.
The Court's legal standard
Lithuania's Supreme Administrative Court, hearing the case at last instance, referred the question of the required standard of proof to the CJEU. The Court ruled that where a fund freeze rests on alleged control by a sanctioned person, national courts must verify that the competent authority has proven that control "on an objective and sufficiently solid basis, by direct evidence or by a sufficiently specific, precise and consistent set of indicia" (curia.europa.eu). Lithuania's argument - that Russia's regime is "autocratic and oligarchic," conferring "genuine and effective, albeit informal, control" over economic operators - does not meet that bar on its own. National courts remain free to weigh evidence of real, even informal, control, but only if it is backed by objective and solid proof.
The Court also clarified procedure: an asset freeze implementing an EU regulation is not an additional national sanction but the implementation of Council measures, and national authorities must respect the EU Charter of Fundamental Rights. Prior notice to the company is not required - it would undermine the freeze's effectiveness - but the reasons must be communicated promptly afterward so the company can challenge the decision in court. National courts, however, do not need to independently assess national-security threats when reviewing the lawfulness of such a freeze.
Implications for business
The ruling directly affects EU-based companies with Russian shareholders or ownership chains routed through third jurisdictions, as well as banks, customs and regulators running sanctions screening. A bare reference to "Russian origin" of capital, or to the Kremlin's general leverage over business in Russia, can no longer justify freezing a specific EU entity's assets - authorities must produce concrete evidence of actual control over that particular company. For banks and trading companies dealing with Russian-linked counterparties, this raises the practical requirement to document specific facts of operational control - voting rights, appointment powers, cash-flow direction - rather than relying on ownership-structure checks alone.
Case returns to the Lithuanian court
The dispute goes back to Lithuania's Supreme Administrative Court, which must issue a final ruling on Inter Rao Lietuva's fund freeze applying the CJEU's evidentiary standard (LRT). The interpretation is binding on other member-state courts hearing similar disputes over asset freezes tied to Russian-linked ownership.
Primary sources
- Press release No 116/26 — Judgment of the Court in Case C-147/25 Inter Rao Lietuva
- EU court rules against Lithuania's sanctions on Russia-linked energy company (LRT)
- Putin's autocratic regime not enough to freeze assets of Russia-linked companies, EU's court rules (Euronews)
- Суд ЕС отказал Литве в расширительной трактовке санкций против России (ТКС)
This material is for information only and does not constitute legal advice or customs consulting. Verify changes against the primary sources before acting.