The case in progress before the CJEU has its origin in an Italian court questioning the question of whether the assets placed in trusts by two sanctioned individuals must be subjected to a frost of assets. Recently, the lawyer general of the CJEU, Manuel Campos Sánchez-Bordona, has given his non-binding-but influential-legal opinion-affirming that the trusts represent suspicious assemblies that can be used to bypass or avoid sanctions. This opinion should help CJEU judges to forge an opinion on the issue before making their stop.
Under the guise of geopolitical morality, it is a whole legal building, the fruit of centuries of construction, which vacillates. Because the trust is based on strict separation between the legal owner (the trustee) and the beneficiary. This principle, anchored in Anglo-Saxon law but recognized and used in many European jurisdictions, protects family assets, planning heritage transmission and ensuring the neutrality of public charges holders.
In fact, the trusts are now used by entrepreneurs, liberal professions, families of the upper middle class, but also by the states themselves to guarantee the ethics of their leaders. By wanting to assimilate them to diversion of goods or suspicious assemblies, you throw stigma on a tool in the service of stability. An excessive decision of the CJEU would cause three major tremors.
The whole European trustee industry would be struck
First, it would call into question the validity of many transparency devices. Is a minister who placed his assets in a trust now considered as indirect control? Should we reintegrate these goods in declarations of interest or tax? The law would then become a subjective interpretation game.
Second, the whole European trustee industry would be struck. Trusts play a significant role in the governance of many large European companies, including BMW in Germany, Heineken in the Netherlands and Swarovski in Austria. This list, far from being exhaustive, underlines the lasting influence of trust structures in the protection of corporate inheritances through various sectors. Luxembourg and Malta, where these activities represent up to a quarter of the GDP, would ultimately be competed by safer places like Singapore or Abou Dabi. Capital does not tolerate legal insecurity.
Europe would shoot itself in the foot by detering international investments
Third, Europe would be shot in the foot by detering international investments. Who will want to place their assets in a union where property law varies according to political crises? Legal competitiveness is a lever for attractiveness that Europe cannot afford to sacrifice.
Although trusts, as seems to be the case, can be used to help bypass sanctions – other perfectly legal devices can also. However, the existing legal mechanisms, properly applied, constitute sufficient safeguards against the bypass and the escape of sanctions. Trusts are not intrinsically bad, it is not necessary to destroy the trusts to enforce the sanctions.
Some people plead for a targeted decision, limited only to oligarchs. But that would create a break in equality before the law, the very foundation of our legal tradition. The law should not adapt to the circumstances: it overlooks them.
This case reminds us that law is not a political instrument. It is a pillar of confidence. If Europe yields to a moral and opportunistic reading of heritage law, it weakens not the oligarchs, but the foundations of its own economic and legal model. It is urgent that the CJEU shows up at the height of its role: to say the law, just the law. Neither more nor less.
* Sébastien Laye is an entrepreneur and economist. He is the author of a report for the associated taxpayer association: “Administrative simplification, getting out of French bureaucratic hell”.
