FRANCE Trends and Developments Contributed by: William Julié, Amélie Beauchemin and Camille Gosson, WJ Avocats
from or dispose of those funds and resources or to have influence over them or over the decisions made by the trustee in respect of the funds and economic resources held in the trust or placed in the trust by the settlor”. Implications and Limits The judgments address a legal vacuum in EU sanc - tions law. For the first time, the Court rendered rulings on the application of asset freeze obligations to trust structures. The key takeaway is that the existence of a trust structure does not, in itself, shield assets from exposure to EU sanctions merely because the legal title is vested in a trustee or because the trust deed incorporates compliance provisions. Formal legal structures cannot place assets beyond the reach of EU sanctions where the factual circumstances point in a different direction. A significant consequence pertains to asset decla - ration obligations. The broad interpretation of the notions of “belonging to” and “controlled by” sug - gests that assets held through trusts over which a designated person exercises de facto power may fall within the scope of assets that must be declared to the authorities, notwithstanding the absence of formal title. This places enhanced due diligence obligations on trustees, corporate service providers, and financial institutions. Nonetheless, the judgments leave important ques - tions open. The Court relied on the concepts of “pow - er” and “influence” to give substance to the notions of “belonging to” and “controlled by”, yet provided no definition. This is particularly noteworthy in rela - tion to “influence”, a notion that is often used lightly by the Court in sanctions-related cases, without any clear framework. Instead, the Court’s approach is fundamentally case-by-case: rather than establishing a clear presumption akin to the 50% shareholding threshold confirmed in the EM System judgment, it enumerates factual indicia that may support an infer - ence of belonging or control. The standard of proof, the weight to be accorded to each factor, and the threshold at which the inference is established remain unresolved. The judgments also fail to address wheth - er the inference of control is rebuttable and, if so, how the burden of proof is allocated between authorities
and the settlor or beneficiary. These shortcomings are all the more problematic given the inherently flexible and multifaceted nature of trust structures. The mere enumeration of factual indicia cannot be sufficient. To that extent, the judgments do not remove all legal uncertainty surrounding trusts, depriving economic operators of a comprehensive framework. More fundamentally, the Court’s framework will be applied by national authorities across twenty-seven member states operating under different administra - tive law traditions, which may lead to significant diver - gence in enforcement practices. This risk is particular - ly acute within the context of trusts. They are neither recognised nor used uniformly across the EU, and the characteristics of trust arrangements vary consider - ably depending on the jurisdiction and the type of trust concerned. The factual indicia identified by the Court may therefore be understood and applied differently across member states. While the judgments provide a methodology for assessing assets held through trusts, they fall short of establishing a genuinely harmonised framework. By relying on open-ended factual indicia rather than clear presumptions or thresholds, the Court has left con - siderable room for national discretion, and therefore discrepancy. This fragmentation risk is compounded by the near-certain increase in national litigation: trus - tees, beneficiaries, and underlying companies subject to freeze decisions will challenge those decisions on the basis of the factual criteria laid down by the Court, with each case requiring intensive cross-border fac - tual inquiry. Ultimately, the significance of the 21 May 2026 judg - ments depends largely on one’s perspective. For the more optimistic observer, they constitute a step towards a more coherent and harmonised framework governing the treatment of trusts under EU sanctions law. For the more sceptical, they may prove some - what underwhelming: while the Court has provided a first set of criteria for assessing whether assets held through a trust may be regarded as “belonging to” or being “controlled by” a designated person, it has pro - vided only limited guidance as to its practical applica - tion and failed to create a comprehensive framework. The 21 May 2026 judgments are, in this sense, the
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