Czech court upholds freeze on 61 Russian-owned properties

A Russian state asset management company has lost its latest attempt to overturn sanctions freezing 61 properties across Czechia.

The Supreme Administrative Court dismissed a cassation complaint filed by the Russian Enterprise for the Administration of Assets Abroad, according to a ruling published by the court.

The properties are owned by the Russian Federation and located in Prague, Brno, Karlovy Vary, western Bohemia, and the municipalities of Vlkančice and Jevany near Prague. The sanctions prevent the company from selling, transferring or otherwise handling them.

Diplomatic properties, including the Russian Embassy and the ambassador’s residence, are not affected.

The Czech Financial Analytical Office classified the properties as economic resources controlled by the sanctioned Russian company. Prague Municipal Court subsequently upheld that assessment.

In its appeal, the company argued that it did not manage some of the affected properties and said the authorities’ conclusion was based only on a hypothesis.

The Supreme Administrative Court rejected that argument. It ruled that authorities do not need to document every detail of a sanctioned entity’s relationship with an individual asset.

Instead, it is sufficient to establish beyond reasonable doubt that the sanctioned party can control the property or influence its use legally or in practice.

Requiring authorities to prove every aspect of the relationship would undermine the purpose of sanctions and make them significantly more difficult to enforce, the court said.

“Sanctions mechanisms are a legitimate tool for responding to serious violations of international law, threats to security and other destabilizing activities,” the ruling states. “At the same time, the effective enforcement of sanctions supports the credibility of the rule of law.”

The Russian company was added to Czechia’s national sanctions list in November 2023 by the government of then-Prime Minister Petr Fiala.

Officials said the company was suspected of providing material and financial support to the Russian government following its invasion of Ukraine. Its inclusion on the list led to the freezing of Czech bank accounts and real estate under its control.

Both the Supreme Administrative Court and the Constitutional Court have previously upheld the sanctions designation.

In July, the company also lost appeals concerning a frozen Czech bank account and one property in Prague’s Bubeneč district.

The Russian entity remains involved in several legal disputes over individual properties, but none of its challenges are known to have succeeded so far.