The Court of Justice of the European Union (CJEU) ruled on Thursday that Russia’s autocratic regime is not, on its own, enough to justify freezing the assets of a company indirectly linked to someone under EU sanctions, as any such measure must be backed by objective and solid evidence.Brussels has currently blacklisted around 3,000 entities and individuals considered to be part of the Russian industrial-military complex that is participating in the invasion of Ukraine, pending extension on 15 September.The judgment sets clear limits on how far national authorities can go when freezing the assets of entities not directly listed under EU sanctions, but alleged to be linked to a sanctioned individual.The case concerns Inter Rao Lietuva, a Lithuanian electricity company that Lithuanian authorities placed on the national asset-freeze list despite it not being directly targeted by EU sanctions against Russia.Lithuanian authorities argued that the company’s ownership structure made it sufficiently connected to sanctioned individuals to justify the freeze: 51% of its shares are owned by Rao Nordic, a Finland-registered company wholly owned by PJSC Inter RAO, a major Russian state-controlled energy firm.Since the company was ultimately controlled by the Russian state, the authorities concluded it was under the indirect control of President Vladimir Putin, who is himself subject to EU sanctions.The CJEU rejected that reasoning, ruling that restrictive measures must rest on proven control over the entity concerned, supported by objective and sufficiently solid evidence.As a result, the judgment concludes that the mere fact that Russia’s political system is autocratic and oligarchic — giving Putin virtually unlimited power — does not by itself amount to sufficient evidence of his control over the company.At the same time, the national authorities might take into account all relevant information to assess the effectiveness of the control, even of an informal nature, by another person or entity subject to EU sanctions.