EU court limits asset freezes on Russia-linked firms

The Court of Justice of the European Union (CJEU) has ruled that the nature of Russia’s political system alone is insufficient evidence to justify freezing the assets of companies linked to sanctioned individuals.

The ruling stems from a case involving Inter Rao Lietuva, a Lithuanian electricity supplier. Lithuanian authorities had frozen the company’s funds, arguing that because it is owned by entities ultimately controlled by the Russian state, it was under the indirect control of President Vladimir Putin, who is subject to EU sanctions.

However, the CJEU concluded that the autocratic nature of the Russian presidency does not, in itself, constitute “an objective and sufficiently solid basis” to prove specific control over a company. The court emphasized that authorities must provide concrete evidence of control before implementing restrictive measures against entities not directly listed under EU sanctions. The case will now return to Lithuania’s Supreme Administrative Court for further resolution in accordance with this interpretation of EU law.