EU Court of Justice judgment on ownership and control – 50% shareholder creates rebuttable presumption of control

12 March 2026

The European Court of Justice has given judgment in Case C‑84/24 EM System v AB SEB Bank, a request for a preliminary ruling from the Lithuanian Supreme Court on the interpretation of Articles 2(1) and (2) of Regulation (EU) No 765/2006, the EU’s Belarus sanctions regime.

The EU sanctioned Mr AVS, a Belarus national, in 2020. Mr AVS held a 50% shareholding in EM System, a Lithuanian company. After his designation, several Lithuanian banks froze EM System’s funds on the basis that he controlled the company. EM System challenged the banks’ decisions to freeze its assets, arguing that Mr A.V.S’ shareholding did not give him control over the company’s funds. The case reached the Lithuanian Supreme Court, which referred 3 questions to the ECJ:

• Does a 50% shareholding establish a presumption that a company’s funds are owned, held or controlled by a designated person under Article 2 of Regulation 765/2006?

• Can a bank’s decision to freeze funds be challenged on the basis that the company’s funds are not used by, or for the benefit of, a designated person?

• If yes, what criteria must be applied to determine whether the funds are not used by, or for the benefit of, a designated person?

The ECJ answered the first question in the same way as Advocate General Ćapeta’s opinion.  It said asset freezing measures (which must be interpreted broadly) apply to companies owned or controlled by those expressly designated, and that a 50% shareholding creates a rebuttable presumption that the designated person controls the company’s funds.

However, not following the AG’s opinion, the Court said EM System must be able to challenge a national assessment of ownership and control; in the case of Lithuania the decision on which companies are owned or controlled by DPs is made by the FNTT (the Financial Crime Investigation Department in the Ministry of Interior) which publishes a national list – see the recent Advocate General’s opinion in Case C-147/25, suggesting that national lists of that kind are compliant with EU law.  The ECJ said:

• A designated person with a 50% shareholding is presumed to control the company.

• Non‑designated companies whose funds have been frozen pursuant to a national decision that it is owned or controlled must be able to challenge that assessment and show that their funds are not in fact held or controlled by the designated person.