Written by Martin Poelman
Published on 13 July 2026
A previous publication focused on the sanctions imposed by the EU on Russia. In it, the important EU Regulation No 269/2014 was discussed (the Sanctions Regulation). The Sanctions Regulation plays an important role in some Dutch court cases. Another publication dealt with the exercise of voting rights. This publication is about a property owned by a Russian businessman in Amsterdam, which was squatted.
Use of (squatted) premises
The summary proceedings were initiated following the squatting of a residential property in Amsterdam. At the time of the lawsuit, the property in question was owned by Paraseven Ltd, a British Virgin Islands-based company owned by a Russian businessman. On his instructions, the property was being renovated. This was still the case when the property was squatted in October 2022. Paraseven and the contractor who carried out the renovation sought the eviction of the property in summary proceedings. The Amsterdam District Court in summary proceedings dismissed that claim, stating the sanctions prevented the Russian from using the property and continuing the renovation work. According to the judge, eviction of the squatters would lead to unjustified vacancy.
UBO of property owner is on sanctions list
In appeal, the Court of Appeal considered that the property was ‘frozen’ under Article 2(1) of the Sanctions Regulation because the Russian businessman in question is the UBO (‘ultimate beneficial owner’) of Paraseven and he is listed on the sanctions list (Annex 1 to the Sanctions Regulation). The judgement shows that the court recalled that the businessman had been added to the sanctions list ‘as founder and CEO of Yandex, Russia’s largest internet company’ (paragraph 2.6). According to the Parool of 16 May 2023, the man in question is Mr Volozh. This man is indeed on the EU sanctions list (as number 1175). According to the Trade Register, Yandex N.V. is based at Schiphol Airport but is not itself on the sanctions list.
The Court of Appeal considered that the freezing of economic resources, such as the premises, is defined in Article 1e of the Sanctions Regulation as ‘preventing the use of economic resources to obtain funds, goods or services in any way’, which can be carried out by, among others, selling, hiring or mortgaging them (paragraph 3.12).
The Court continued that the provisions of Article 2(2) of the Sanctions Regulation entail that no funds or economic resources may be made available, directly or indirectly, to or for the benefit of the natural or legal persons sanctioned or associated with them. Article 4(1) of the Sanctions Regulation provides that, by way of derogation, the competent authorities (in this case of the Netherlands) may nevertheless authorise the release of certain frozen funds or economic resources or the provision of certain funds or economic resources, subject to conditions. Economic resources are defined in Article 1d of the Sanctions Regulation as assets of every kind, whether tangible or intangible, movable or immovable, which are not funds but can be used to obtain funds, goods or services (paragraph 3.13).
Breach of Sanctions Regulation
In the preliminary opinion of the Court of Appeal, Paraseven violates Article 2 paragraph 2 of the Sanction Regulation by (allowing) the loan agreement to continue. After all, with that agreement, it grants the sanctioned person and his spouse the right to use the property free of charge, while Paraseven not only bears all the owner’s costs, but also the utility costs, such as gas, water and light and all the maintenance costs of the property. According to the Court of Appeal, this can be regarded as placing assets or economic resources at the disposal of the sanctioned person, which is not altered by the fact that the property itself is intended for his private use. According to the Court of Appeal, it goes without saying that the sanctioned person thereby enjoys a considerable material and immaterial advantage in private life every month compared to the situation where he would not have that use or would have to pay for that use and would bear those costs himself. In addition, the Court of Appeal considered that the loan agreement offers the sanctioned person and his spouse the possibility of giving the property on (sub)loan or use to other family members and/or third parties. According to the Court of Appeal, the foregoing is contrary to the (intention of the) Sanctions Regulation, which on this point also covers natural persons related to the sanctioned person, such as his spouse (paragraph 3.14).
Subsequent sanction precedes earlier agreement
The Court of Appeal rejected the argument that the loan agreement predated the imposition of sanctions on the businessman. According to the Court of Appeal, the Sanctions Regulation takes precedence over any contractual arrangements incompatible with it. This means that the performance of acts in execution of previously concluded agreements is prohibited (paragraph 3.15).
No liability in case of ‘reliance’ on proper interpretation
It is interesting to note the Court of Appeal’s reference to Article 10 of the Sanctions Regulation. This provides that the refusal to make funds or economic resources available, which takes place in the confidence that that measure is in accordance with the Sanctions Regulation, does not give rise to, in short, any liability. In other words, according to the Court, Paraseven does not need to fear liability towards the businessman in question.
First obstacle
The Court of Appeal concluded that the Sanctions Regulation prohibited Paraseven from giving the property for no consideration and from paying the said charges, while the authorities did not give Paraseven permission to do so (which apparently was not even sought). Therefore, the businessman cannot derive any rights from the loan agreement for his own use of the property, nor for use by his family members. According to the Court of Appeal, this is the first obstacle to the immediate use of the property (paragraph 3.15).
Second obstacle
A second argument cited by the Court of Appeal relates to the following. The property is not yet ready for occupancy. Before the businessman and his family can reside there, the conversion work must first be completed. The question here is whether conversion work is permitted under the Sanctions Regulation. Relying on the position of the European Commission, the Court concludes that, under Article 2(2) of the Sanctions Regulation, the provision of labour and services to the businessman or Paraseven’s affiliated legal person, whether for private use or otherwise, must be regarded as the provision of economic resources insofar as they can be used to obtain funds, goods or services. According to the court, it is for the competent authorities to assess whether this is the case. Whether the conversion can go ahead is therefore uncertain, the Court of Appeal concludes. This depends firstly on whether a request to that effect is made to the competent authorities, and secondly on the time taken for a decision and what that decision will ultimately be. Also on this basis, the Court of Appeal decides that personal use of the property in the short term is out of the question (paragraph 3.21).
Third obstacle
The Court of Appeal adds a third obstacle. According to the Court of Appeal, the businessman cannot travel to the Netherlands without permission to do so from the competent authorities. It was established between the parties ‘that the Maltese passport he holds does not allow him to travel elsewhere than to Malta.’ (paragraph 3.22 of law)
Squatters win but get warning
The conclusion is that the squatters may remain in the property for the time being, although the Court of Appeal warns that the squatters must not cause a nuisance. In this regard, the judgement states that the premises are used not only for habitation, “but also for night shelters, workshops, a people’s kitchen, film screenings, discussion meetings, music, cultural and social events, jam sessions and fundraisers with bar and DJs, for which general appeals go out via the internet.” According to the Court of Appeal, the squatters must take into account that they can still be evicted if they act in violation of the residential use of the property and/or cause structural nuisance. Click here for full judgement of 16 May 2023. The lawyer of the Russian businessman has announced an appeal in cassation to the Supreme Court, according to Parool.
