SPOTLIGHT #21: EU Sanctions Impose a Mandatory First Step Before Enforcement on Frozen Assets
At Lead up, we are committed to providing our clients with the most innovative conflict resolution solutions tailored to their specific needs. Each month, in the “Lead up Spotlight,” we share with our colleagues, clients, and potential partners our analysis of a recent development related to conflict resolution that matters to us and to our clients.
This Spotlight addresses enforcement on frozen assets in France, and specifically the decision rendered by the Cour de cassation on 5 February 2026 (Arrêt n° 121 F-B, Case n° X 23-15.936, ECLI:FR:CCASS:2026:C200121). Council Regulation (EU) No 2016/44 requires that any release of frozen Libyan assets be authorised in advance by the competent national authority, which in France is the Direction générale du Trésor (DG Trésor). The Court rejected the cassation appeal filed by a Kuwaiti trading company and confirmed that no attachment may be authorised over assets of the Libyan Investment Authority (LIA) held at Société Générale without that prior administrative authorisation. The Court further held that this requirement must be satisfied before, and as a condition of, any recourse to the domestic judicial authorisation mechanism introduced by the Sapin 2 law of 9 December 2016.
1. Background: The EU Freeze on Libyan Assets in France
Following the Libyan civil conflict of 2011, the UN Security Council called for measures restricting access to Libyan State assets. Regulation (EU) No 2016/44 gives those measures a binding effect within the EU: it freezes all funds and economic resources belonging to, or controlled by, entities listed in its annexes. The LIA, Libya’s sovereign wealth fund, is expressly designated under Article 5(4) and Annex VI of the Regulation. Article 11(2) of the Regulation further provides that any release of such frozen funds requires prior authorisation from the competent national authority, which in France is the DG Trésor.
The creditor in this case held an irrevocable arbitral award for USD 936,940,000 against the Libyan State, rendered enforceable in France and confirmed by the Cour de cassation on 8 June 2016, yet enforcement on frozen assets in France remained blocked at every turn by the EU freeze.
2. Facts: Attempted Enforcement on Frozen Assets
After years of failed enforcement attempts, the creditor obtained a fresh authorisation from the French enforcement judge on 1 October 2020 and served a new attachment on bank accounts at Société Générale on 15 October 2020. The LIA challenged the measure. On 28 February 2022, the enforcement judge retracted its own order and annulled the attachment because it was lacking the prior administrative authorisation required by Article 11(2) of Regulation No 2016/44. The Court of Appeal confirmed the judgment on 2 February 2023. The Cour de cassation rejected the cassation appeal on 5 February 2026 and thereby confirmed the Court of Appeal’s decision.
3. The Court’s Reasoning
The Court’s analysis rests on three ideas. First, the definitions of “funds” and “freezing of funds” in Article 1 of Regulation No 2016/44 are broad enough to capture an attachment: that measure effects an instantaneous transfer of the seized debt to the creditor, thereby changing the ownership and destination of frozen funds within the meaning of the Regulation.
Second, Article 11(2) of Regulation No 2016/44 designates the competent national authority, in France the DG Trésor, as the sole body empowered to authorise the release of frozen funds. No exception exists for creditors holding enforceable arbitral awards.
Third, the Court applied the primacy of EU law over national law. The judicial authorisation available under Article L. 111-1-1 of the Code of Civil Enforcement Procedures (CPCE) (introduced by the Sapin 2 law) cannot substitute for the prior administrative authorisation required by EU law. In the absence of administrative authorisation, the attachment is null, not merely ineffective.
4. Practical Implications for Enforcement on Frozen Assets in France
This decision is published in the Bulletin of the Cour de cassation, a classification that signals its importance and is likely to guide enforcement courts in future cases raising the same issue.
The sequencing is mandatory for any enforcement on frozen assets in France. The DG Trésor’s administrative authorisation must precede and condition the enforcement judge’s order. Creditors must therefore obtain that authorisation before applying to the enforcement judge. Reversing that order, or proceeding without administrative authorisation at all, renders the enforcement measure null.
The administrative process is substantive, not formal. The DG Trésor has genuine discretion to assess whether a release of frozen funds is consistent with the objectives of the sanctions regime. Creditors should be prepared to engage with that process with detailed legal arguments and, where applicable, to invoke one of the derogation grounds available under Regulation 2016/44 (notably the pre-listing claim derogation).
The enforcement judge cannot cure the absence of administrative authorisation. The enforcement judge’s powers are exercised within the framework of EU law: a judicial order, however properly obtained, is ineffective if the DG Trésor’s authorisation has not first been granted.
Readers will find a useful complement in our Spotlight #14, which analysed the 2025 reform proposals for French arbitration law, including the streamlining of recognition and enforcement proceedings and the centralisation of para-arbitral matters before the Court of Appeal of Paris. The present decision is a timely reminder that, whatever domestic procedural reforms may bring, EU sanctions law introduces a non-negotiable layer that no legislative reform of French procedure can displace.
How Lead up Can Assist
Lead up advises clients on all aspects of international enforcement proceedings, including enforcement against sovereign entities and sovereign wealth funds, navigation of EU sanctions regimes, and authorisation procedures before the Direction générale du Trésor. If you are facing an enforcement challenge involving frozen assets or sanctioned entities in France or abroad, we would be pleased to assist. Please contact us at www.leadup-avocats.com.