Emanation of a foreign State: when attachment becomes impossible

The qualification as an emanation of a foreign State (émanation d'État étranger) does not, on its own, permit an attachment of the assets of the entity concerned. The first civil chamber holds that this qualification must be set aside where it compromises the achievement of the objectives pursued by measures established by the European Union. The basis remains Article 2284 of the French Civil Code, interpreted in the light of European Union law. The creditor then loses any enforcement measure against that entity's assets.

The essentials

• A foreign entity may be classified as an emanation of a State where it does not have sufficient functional independence under its constitutive instruments and where its assets merge with those of the State.
• That qualification must be set aside where it compromises the achievement of the objectives pursued by measures established by the European Union.
• A company created to satisfy a condition for granting financial assistance under the European Stability Mechanism, tasked with monetising assets transferred by the State in order to contribute to repaying that assistance, escapes that qualification.
• The assets of such an entity cannot then be subject to any enforcement measure in France by the State's creditors.
• The textual basis is Article 2284 of the French Civil Code, read in the light of European Union law.

How was the emanation of a foreign State set aside?

The qualification as an emanation of a State gives way before the objectives of a scheme established by the European Union (Civ. 1re, 17 June 2026, No. 23-10.435). A foreign State was ordered by an arbitral award, declared enforceable in France, to pay a sum of money to a company. That creditor argued that a company created by the legislation of that State, in order to allow it to qualify for a financial assistance programme under the European Stability Mechanism, constituted an emanation of the State. It obtained authorisation to attach half of the funds deposited in an account which it assumed was held by that company.

The attachment proved fruitless: the account-holding institution stated that the company held no monetary claim in its books. The company then sought from the court of appeal the revocation (rétractation) of its authorising decision. The decision under appeal (CA Paris, 15 September 2022, No. 20/00419) dismissed that application, holding that the State exercised a permanent power of control and direction over the company and that the company had no assets of its own.

The first civil chamber first sets out the applicable rule (free translation), on the basis of Article 2284 of the French Civil Code interpreted in the light of European Union law. That provision binds the debtor in respect of all its present and future assets. The decision also recalls the strict conditionality to which the Treaty establishing the European Stability Mechanism subjects any financial assistance.

While a claim against a foreign State may give rise to enforcement measures in France against an asset belonging to an entity distinct from that State and having its own legal personality, where that entity does not, under its constitutive instruments, enjoy sufficient functional independence to have autonomy in law and in fact vis-à-vis the State and where its assets merge with those of that State, so that it must be regarded as one of its emanations, recourse to that qualification must nevertheless be set aside if it compromises the achievement of the objectives pursued by measures established by the European Union.

The Court then applies that rule. The company's independence from the government and its supervision by the European institutions were among the conditions for granting the financial assistance. Its purpose – monetising assets transferred by the State in order to contribute to repaying that assistance – was incompatible with enforcement proceedings brought directly against its assets by the State's creditors. The quashing is partial and without remittal: the Court orders the revocation of the authorisation and dismisses the application (requête) for attachment.

What the decision changes for a State's creditor

A creditor cannot obtain an attachment of the assets of a foreign entity merely because the State controls it and merges its assets with those of the State. The reasoning proceeds in two stages. The first examines the criteria for an emanation: the absence of sufficient functional independence under the constitutive instruments and the merger of assets. The second checks that the qualification does not compromise the objectives of a measure established by the European Union. If this second check fails, the qualification is excluded, whatever the outcome of the first.

For the entity concerned, the stakes go beyond the attachment at issue. Once accepted, a qualification as an emanation of a State may serve as a basis for other enforcement measures brought by other creditors of the same State. The decision under discussion produces the opposite effect: the assets of that company cannot be subject to any enforcement measure in France by the State's creditors. The protection extends to all of its assets, not only to the account initially targeted.

What scope for attachments against a foreign State?

The decision confirms the definition of an emanation of a State and adds to it a limit drawn from European Union law. The definition remains that of a distinct entity, having its own legal personality, which does not have sufficient functional independence under its constitutive instruments and whose assets merge with those of the State. The decision introduces a European filter: the qualification is set aside where it compromises the achievement of the objectives pursued by measures established by the European Union.

The divergence from the decision under appeal concerns the method. The court of appeal had examined the company's current structural autonomy and held that the circumstances of its creation were not sufficient to establish it. The first civil chamber holds, on the contrary, that those circumstances – the independence required by the European institutions and the supervision exercised by them – required the qualification as an emanation of a State to be excluded.

Several questions remain open. The decision does not define the scope of the measures established by the European Union capable of producing this exclusionary effect. Nor does it rule on the conditions laid down by Article L. 111-1-2 of the French Code of Civil Enforcement Procedures, which govern any measure targeting an asset belonging to a foreign State. As the case law stands on 17 June 2026, the limit laid down concerns a financial assistance scheme subject to strict conditionality.

What arguments for an entity targeted by an attachment?

A foreign entity targeted by an attachment has an interest in documenting the European origin of its independence and the dedication of its assets. The factors relied on by the Court are verifiable: the European political declaration behind the scheme, the founding legislation and the entity's statutory purpose, the financial assistance agreement and the reports of the European Commission. Those documents establish the link between the entity's independence and the condition attached to the granting of the assistance.

For the creditor, the analysis must precede the request for authorisation. An entity wholly owned by a foreign State is not necessarily open to attachment: its purpose may neutralise the qualification as an emanation. The course of this case illustrates the point. The authorised attachment proved fruitless, the entity obtained the revocation of the authorisation, and the creditor company bears the court costs together with an overall procedural indemnity of €6,000.

Checks before bringing an enforcement measure

• Identify the true owner of the asset targeted: the measure presupposes an asset belonging to the entity pursued, and not to the State itself.
• Check whether the entity was created or made independent in order to comply with a requirement of the European institutions.
• Examine the dedication of the assets: those intended to contribute to repaying European assistance are beyond the reach of the State's creditors.
• On the side of the entity concerned, gather the founding legislation, the statutory purpose and the documents relating to the financial assistance.
• Bear in mind that any measure targeting an asset of a foreign State remains subject to the conditions of Article L. 111-1-2 of the French Code of Civil Enforcement Procedures.