Unlocking Sanctioned Assets: Legal Mechanisms and Practice 2026

Brief Answer

What is the unblocking of sanctioned assets and who needs it

Unblocking sanctioned assets is a set of legal actions aimed at gaining access to securities, funds, and dividends frozen in foreign depositories due to restrictive measures. The procedure is required by private investors, legal entities, and beneficial owners whose assets have been blocked in Euroclear, Clearstream, and other accounting systems since 2022.

Key Unlocking Routes in 2026: A 60-Second Overview

Three main routes: obtaining an individual licence from a national regulator in an EU jurisdiction, applying to the U.S. Office of Foreign Assets Control for a specific licence, and pursuing legal proceedings in the national courts of European states. The choice of route depends on the type of asset, the applicant's residency, and the jurisdiction of custody. Practice in 2025–2026 shows that the combination of several routes simultaneously yields the highest results.

Key Facts About Frozen Assets and the 2026 Legal Framework

According to Euroclear's estimates, the volume of frozen Russian assets held at this depository exceeds 180 billion euros. A significant portion of the funds consists of income from securities — coupons and dividends, which continue to accrue but remain inaccessible to their owners.

The regulatory framework consists of EU regulations (primarily Council Regulation 269/2014 and subsequent sanctions packages), directives from the U.S. Office of Foreign Assets Control regarding Russian financial institutions, as well as the national legislation of Belgium, Luxembourg, and Germany. The EU's twentieth sanctions package in 2026 expanded Euroclear's immunity from claims — this has significantly altered the landscape of judicial proceedings.

Several categories of assets are subject to unblocking: securities (stocks, bonds, fund units), cash held in depository accounts, accrued and unpaid dividends, as well as proceeds from bond redemptions. An application may be submitted either by the direct owner or by the beneficial owner through an authorized representative.

Procedure for Obtaining an Individual License from a European Regulator

Competent Authorities and Application Requirements

In Belgium, licenses are issued by the Ministry of Finance; in Luxembourg — by the relevant Ministry of Finance; in Germany — by the Federal Office of Economics and Export Control. Each jurisdiction imposes its own requirements regarding the form and content of the application.

To submit an application, you will need to prepare: documentary proof of asset ownership, information on the chain of custody through intermediaries, justification of the purpose of the transfer or withdrawal of funds, confirmation of the absence of any connection to individually designated persons, and a guarantee of the transaction's compliance with sanctions legislation. The justification must be prepared in the language of the relevant jurisdiction and certified by a qualified lawyer.

Eligibility Criteria and Common Grounds for Refusal

The regulator assesses whether the unblocking would result in direct or indirect benefit to a sanctioned person. Applications are approved upon proof that the ultimate beneficiary is not included on sanctions lists and that the transaction is of a legitimate nature.

Typical grounds for refusal: incomplete documentation, inability to identify the ultimate beneficial owner, overlap in the ownership chain with sanctioned structures, lack of justification for the purpose of the transaction. Review timelines in 2025–2026 range from three to nine months, depending on the jurisdiction and complexity of the case.

Unblocking Assets through the U.S. Office of Foreign Assets Control

Jurisdiction and Types of Licenses

The American route applies when US dollars, American financial institutions, or securities of issuers subject to the jurisdiction of the US Office of Foreign Assets Control are involved in the custody or settlement chain. The regulator issues general licenses (covering certain categories of transactions) and specific licenses (issued to a particular applicant).

The fifty percent rule means: if a sanctioned person directly or indirectly owns fifty percent or more of an organization, all assets of such organization are considered blocked. This rule is critical when assessing the admissibility of an application.

Comparison of US Regulator and EU Regulator Routes

The Role of Residency and European Status in the Unblocking Procedure

Changing tax residency to a European country noticeably increases the chances of application approval. EU regulators take a more favorable view of applications from individuals who hold a residence permit and have tax obligations in a member state of the Union.

However, European status is not mandatory. Practice in 2025–2026 confirms this: applicants with Russian tax residency also obtain licenses when documents are properly prepared and the justification is compelling. For investors without European status, the primary strategy is to engage a local legal representative with experience working with the national regulator.

Court Proceedings and Asset Transfer to European Infrastructure

The judicial route is advisable when the regulator refuses, when it is necessary to challenge the actions of a depository, or when the licensing path is clearly inapplicable. Appeals to courts in Belgium (for assets held in Euroclear) and Luxembourg (for assets held in Clearstream) are forming a consistent body of case law, although the EU's twentieth sanctions package has complicated direct claims against Euroclear.

Successful unblockings in 2025–2026 demonstrate a cumulative effect: the combination of an obtained licence, a court ruling, and competent interaction with the depository makes it possible to complete the transfer of assets into accessible infrastructure. An attorney here prepares the evidentiary basis, coordinates actions across jurisdictions, and directly represents the client in foreign courts.

Tax and Currency Consequences for Russian Residents

Unlocked assets and income derived from them must be declared in accordance with Russian tax legislation. Currency regulation imposes restrictions on the repatriation of funds — these must be taken into account when planning operations following the unblocking.

The payment of missed dividends on depositary receipts and the mechanism for lifting restrictions on Type C accounts deserve special attention. In 2026, the practice of working with such accounts continues to develop, and each case requires individual legal analysis.

How to Choose a Strategy and Avoid Common Mistakes

A step-by-step algorithm for an investor: identify the jurisdiction where the assets are held, assess your own sanctions status and the ownership chain status, choose an unblocking route (licensing, judicial, or combined), and prepare a complete package of documents with the involvement of a specialist attorney. The estimated cost of the procedure ranges from several thousand to several tens of thousands of euros, depending on the route and complexity.

Typical mistakes when attempting independently: submitting an application without justification, ignoring language and document format requirements, incorrectly identifying the competent regulator, failure to analyze the ownership chain with respect to the fifty percent rule.

The law firm has practical experience in supporting procedures for unblocking sanctioned assets, interacting with European regulators, and representing clients in foreign courts. Attorney Erich Rath and a team of sanctions law specialists in Moscow are ready to analyze your situation and propose an optimal legal strategy.

Contact us for a consultation:

Phone: +7 (495) 970-74-16

Email: info@ratanwalt.com

Address: Moscow, Rozhdestvenska str., 5/7, bldg. 1

Frequently Asked Questions

Is it possible to unblock assets in Euroclear without European residency?

Yes, having European resident status increases the chances, but it is not a mandatory requirement. Applicants with Russian residency can obtain licenses with a well-prepared documentation package and a compelling legal justification through a local attorney.

How long does the unlocking procedure take?

Timelines depend on the chosen route and jurisdiction. Obtaining an individual license from a European regulator takes three to nine months, filing with the U.S. Office of Foreign Assets Control takes three to twelve months, and a judicial procedure may require six months to one and a half years.

What will happen to the accumulated dividends after unblocking?

Accumulated dividends, coupons, and other income accrued during the freeze period are payable to the owner following a successful unblocking. The procedure for receiving and taxing such payments is determined on an individual basis, taking into account tax residency status and the terms of the licence.

Why hire a lawyer for unblocking if you can apply on your own?

Regulators require justification from a qualified lawyer familiar with the sanctions legislation of the relevant jurisdiction. Self-filed applications are more frequently rejected due to procedural errors, incomplete documentation, and incorrect identification of the competent authority. A specialist sanctions law attorney significantly increases the likelihood of a successful outcome.

Does the fifty percent rule apply to private investors?

The rule applies to all cases where a sanctioned person directly or indirectly owns fifty percent or more of an organization. For a private investor, this means that if the ownership chain includes structures with such participation by a sanctioned person, the assets will be considered blocked regardless of the investor's own status.

Internal links

• EU Sectoral Sanctions: Consequences for Russian Companies — https://www.ratanwalt.com/eu-sectoral-sanctions-impact-russian-companies-legal-guidance
• German-Russian Trade Relations in 2026: Legal Aspects and Risks — https://www.ratanwalt.com/german-russian-trade-relations-legal-framework-risks-2026
• Legal Support for Foreign Companies in Russia: Comprehensive Services in Moscow — https://www.ratanwalt.com/legal-support-foreign-companies-russia-comprehensive-services