Jemerak-judgment: what is still permissible for Russian parties?

The case: notary's refusal to authenticate and execute contract of sale of Russian real estate

The case centered on a Berlin civil-law notary who refused to authenticate and execute the contract of sale of an apartment in Berlin. The seller was a legal person established in Russia. The notary feared that the authentication would infringe the prohibition on the provision of legal advisory services to legal persons established in Russia, laid down in Article 5n(2)(b) of Regulation No 833/2014

The purchasers (EU citizens) subsequently initiated legal proceedings. The German court referred preliminary questions to the Court of Justice.

The core question

Does the authentication of a contract of sale, the related ancillary tasks normally performed by notaries for the execution of such a contract of sale after its authentication and the involvement of an interpreter fall under the prohibition on the provision of legal advisory services to such a Russian legal person?

The Court's ruling

• Notarial services are not legal advice

The Court ruled that the authentication of a contract of sale by a civil-law notary is not a 'legal advisory service.' A notary acts as an independent public official, not as an advocate for a specific party's interests. There is no contractual advisory relationship with a client.

Conclusion: The authentication of a contract of sale by a notary falls outside the prohibition of Article 5n(2) of Regulation No 833/2014.

• Notary's ancillary tasks are not prohibited

Ancillary tasks such as holding the purchase monies in an escrow account and the payment of those monies to the seller, the cancellation of the existing charges burdening that property, and the registration in the Land Register of the transfer of title of that property are also not prohibited. These tasks cannot be considered legal advice.

         Conclusion: The execution of a contract of sale is also permissible.

• Translation services provided by an interpreter are not legal advice

An interpreter who provides language support during the notarial proceedings is providing a linguistic service, not legal advice.

Conclusion: An interpreter may participate in the authentication of a contract of sale, even if one of the parties is a Russian legal person.

Key lessons for practice

1. Clarity for notaries restored
   
   Notaries may continue to authenticate and execute contracts of sale for Russian parties. This prevents a de facto real estate sales ban and avoids legal impasses.
    
2. Sanctions' purpose is economical, not subject to private-law
   
   The Court emphasized that the sanctions are not intended to block individual real estate sales transactions. Only legal entities on sanctions lists are subject to asset freezes. The sale of real estate by Russian parties is not, in and of itself, prohibited.
    
3. Legal advice ≠ Public law functions 
   
   The judgment draws an important distinction between:
   
    Economic, advisory services (which are prohibited) and Public-law functions, such as those of a civil-law notary (which are not prohibited).
   
   This distinction is crucial for compliance departments and legal assessments across the EU.
    
4. EU sanctions law requires contextual interpretation
   
   The Court makes it clear that the sanctions rules cannot be automatically translated into national definitions. The purpose, nature and function of the service must be taken into account.

Relevance for legal and notarial professionals

Notaries can continue to perform their statutory duties without fear of sanctions, provided they are not giving legal advice that advocates for the interests of Russian parties.

Lawyers, however, must remain vigilant. They operate in an advisory capacity and therefore fall within the scope of the prohibition.

Interpreters may be present during the authentication and execution of contract of sale, as their role is linguistic, not legal.

Finally: what does this mean for clients?

For EU citizens who wish to purchase real estate from Russian legal persons (not on the sanctions list), the Jemerak judgment offers reassurance. Transactions can proceed, as long as they are conducted within the legal framework. The sanctions target advisory services, not the legal facilitation of transactions.

Sanctions regulations are complex, particularly those adopted against Russia following the invasion of Ukraine. Each situation is different and requires a concrete, fact-based assessment.