EU Court Upholds Asset Freeze of Sanctioned Companies
The European Union Court of Justice has determined that assets of a company, even if not directly sanctioned, can be frozen if controlled by a person on the EU's sanctions list. This decision followed a case involving the Lithuanian company EM System, which faced asset freezes due to its Belarusian owner's sanction status.
The European Union Court of Justice ruled on Thursday that assets of a company controlled by an individual on the EU's sanctions list can be frozen, even if the company itself is not directly sanctioned. This landmark decision clarifies the extent of sanction enforcement on indirectly associated entities.
The ruling arose from a request by the Lithuanian Supreme Court, dealing with a case involving EM System, a Lithuanian company. The company's assets were frozen by two banks because it is 50 percent owned by a Belarusian national subject to EU sanctions.
This decision underscores the broad reach of EU sanctions and signals to companies the importance of assessing ownership structures that could expose them to similar financial restrictions.
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