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Being placed on an EU sanctions list has immediate and severe consequences: frozen assets, a ban on making funds available, blocked payments and reputational damage. These measures weigh first on the designated person, but also on the banks that must give effect to them. What many listed persons and entities do not realise is that a listing is not final. It can be challenged, and securing a delisting is a legal battle in its own right. Here is how it works — and what it means for financial institutions.
EU sanctions in numbers: a fast-expanding field
Since 24 February 2022, the European Union has adopted restrictive measures on an unprecedented scale. Under the Russia regime alone, by the end of 2025 roughly 1,989 individuals and 675 entities were listed, and about €20 billion of private assets had been frozen for more than 1,500 persons and entities — leaving aside the immobilisation of Russian central bank assets. Sanctions “packages” followed one another rapidly (the 14th, in June 2024, added 116 listings on its own; others followed, up to the 19th). Add to this the regimes targeting Belarus, Syria, Iran and terrorism. The direct result: sanctions litigation before the EU courts has never been so intense.
Understanding the listing
EU restrictive measures are adopted by the Council and take the form of decisions and regulations that apply directly in the Member States. Each targeted person or entity is placed on an annexed list, on the basis of defined criteria (links to a regime, a sector, an activity) and an individual statement of reasons. The listing is published in the Official Journal and, in principle, notified to the person concerned. It is from that statement of reasons, and the evidence behind it, that any challenge is built.
First step: the delisting request to the Council
Before or alongside any court action, the person concerned may send the Council a delisting request, ask for access to the file that justified the listing, and submit observations. The Council must review listings periodically. This administrative phase is essential: it makes it possible to obtain the evidence, prepare the defence and, sometimes, secure a delisting without litigation.
The action for annulment before the General Court
The litigation route is the action for annulment before the General Court of the European Union, under Article 263 TFEU. Representation by a lawyer entitled to appear before the EU courts is mandatory, and the deadline is strict: two months (plus a ten-day extension for distance) from notification or publication. The pleas most frequently raised are a manifest error of assessment, an inadequate statement of reasons, a breach of the rights of the defence and of the right to effective judicial protection, and a breach of proportionality. Crucially, it is for the Council to establish that the listing is well founded, on the basis of concrete and verifiable evidence.
Case study: the Aven and Fridman judgments (10 April 2024)
The most recent illustration comes from Aven v Council (T-301/22) and Fridman v Council (T-304/22), delivered by the General Court on 10 April 2024. Petr Aven and Mikhail Fridman — shareholders in the Alfa Group conglomerate, which includes one of Russia’s largest banks, Alfa Bank — had been listed in February 2022. The Court held that none of the reasons relied on was sufficiently substantiated and annulled their listing for the period from February 2022 to March 2023.
This evidentiary requirement is nothing new. Back in 2014, the General Court had already annulled the listing of the Syria International Islamic Bank, because the Council had failed to show that the bank contributed to financing the Syrian regime (Case T-293/12). The lesson is twofold: even high-profile designations can be overturned where the evidence is lacking, the Court exercising genuine review; but annulment only covers the acts challenged — the persons concerned remained listed under later acts. Effective challenges therefore require targeting each successive act, within the deadlines.
An underlying trend: broader “status-based” criteria
This dynamic reflects a long-observed strategic shift. To secure its designations, the Council increasingly relies on broad, “status-based” criteria — belonging to a key economic sector, a ruling circle or a ruling family — which are harder to challenge than specific factual allegations. Observers have noted that such broader, more abstract criteria are significantly harder to overturn in court. The result is a form of cat-and-mouse: an annulment is obtained, then followed by a re-listing on reworked grounds. A challenge must therefore be sustained over time and combine administrative and judicial action.
The effects of an annulment
If the General Court annuls the listing, the person or entity must be removed. The Court may nonetheless, under Article 264 TFEU, temporarily maintain the effects of the annulled measure — to give the Council time to regularise, or to preserve legal certainty where successive acts contain the same measures. Annulment is also confined to the acts covered by the action, and a better-substantiated re-listing remains possible: sanctions litigation is often an iterative process, in which strategy matters as much as law.
What it means for banks
As long as the listing stands, the bank must freeze the assets and refuse to make any funds available, on pain of penalties. It must screen its counterparties and, where appropriate, suspend the relevant payments, while managing the risk of “de-risking”. A delisting, conversely, should lead to the freeze being lifted. Financial institutions therefore have a direct interest in following the outcome of these proceedings, which determine their obligations.
Challenging a listing — or securing your position when dealing with listed persons — calls for a close analysis of the acts at stake, the deadlines and the evidence. In such a fast-moving, high-stakes field, the support of a lawyer well versed in restrictive-measures law and in litigation before the General Court is often decisive.
This article is provided for general information only and does not constitute legal advice.
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