EU Sanctions Expand Beyond Banks: Payment Systems, Crypto-Asset Services Now Targeted

European Union (EU) sanctions against Russia are becoming more effective, thanks to recent judgments from the Court of Justice and refined restrictive measures in latest sanctions packages. The EU's financial sector is no longer confined to bank designations and conventional financing channels, but extends to payment systems, crypto-asset services, non-bank intermediaries, and third-country actors facilitating Russia-linked financial flows.

The Court of Justice clarified how sanctions measures operate in practice, particularly regarding de facto ownership and control, trust structures, and compliance-driven de-risking. In the case of T Trust and Joined Cases, the court held that transferring assets to a trust does not exempt them from EU asset-freezing measures if the settlor retains practical or legal ability to use, benefit from, dispose of, or influence them.

The judgment emphasized that control may exist de jure (legally) and de facto (in practice), and that formal ownership is not the only consideration. The court also considered the broader context and objectives of Regulation (EU) 269/2014, concluding that a narrower interpretation could allow trust structures to be used to circumvent EU restrictive measures.