ECJ sets bar for sanctions breach in Yemen award payments

The Court of Justice has fixed how EU sanctions law treats payments to unlisted public bodies that sanctioned persons claim to controlEuropa: paying an arbitration award to such a body can be an indirect making-available of fundsEuropa, but only where the listed persons are actually able to get the money — shown by objective evidence of a sufficiently significant riskEuropa — and there is no presumption of control from competing claimsEuropa. The Fifth Chamber judgment of 15 October 2026 in Case C-842/24 (DNO Yemen v Petrolin and others) answers three questions from France's Cour de cassation on Article 2(2) of Regulation (EU) No 1352/2014 on Yemen.

DNO, Petrolin, Moe and Dove held production-sharing agreements with Yemen's Ministry of Oil and Minerals and state-owned YOGC. After the 2014–2015 Houthi takeover of Sana'a they withdrew in January 2015; a Paris award of 15 July 2019 ordered DNO, Petrolin and Moe to pay damages to the Ministry and YOGC. The Paris Court of Appeal dismissed their annulment action on 5 October 2021, requiring proof the recipients acted for or under listed persons' control with intent to benefit them. Meanwhile the Ministry enforced in Oslo, and on 4 December 2023 DNO paid the net sum to the Ministry alone after YOGC assigned its rights. DNO and Petrolin appealed, arguing Paris had narrowed the broad indirect concept by demanding control plus intent.

The Court holds such payments may be indirect making-available even where listed persons merely claim control alongside the legitimate government without exercising itEuropa. "Directly or indirectly" and "made available" are broad anti-circumvention conceptsEuropa covering award enforcement that lets listed persons obtain disposal powerEuropa; control-or-instruction and pass-through ability are relevant but not necessary circumstancesEuropa. Parallel Houthi governance in Sana'a, claimed control of the recipients, and competing post-award payment demands mean diversion cannot be excluded — for the national court to verifyEuropa.

But a merely hypothetical risk is not enoughEuropa. The prohibition bites only where objective material evidence shows a sufficiently significant probability, assessed on all the circumstances — including impeding factors such as the legitimate government's anti-diversion measuresEuropa. A conjecture from Yemen's uncertain politics, or from the mere fact of competing control claims, would be disproportionateEuropa: it could catch large numbers of unconnected public entities, harm the legitimate government that co-owns the award, and serve Houthi propaganda.

Nor is control presumed from competing claims. The national court must assess a sufficiently specific, precise and consistent set of indicia without general presumptionsEuropa. The annulment-seeker must show a prima facie non-negligible likelihood through specific, precise and consistent indiciaEuropa — the beneficiaries need not prove a negativeEuropa — but once that threshold is met, it is the beneficiaries who must adduce evidence excluding the riskEuropa; the court may order investigative measures, consult UN/EU material or ask authoritiesEuropa. Non-cooperation by the legitimate government with listed persons is relevant but insufficient aloneEuropa: the government and the entity must show specific measures actually capable of preventing diversionEuropa. Legal basis: Article 2(2) of Regulation (EU) No 1352/2014, as amended by Regulation (EU) 2021/397.