Proposal for a COUNCIL REGULATION on emergency measures addressing the serious economic difficulties caused by Russia's actions in the context of the war in Ukraine
Date: 2025-12-03
Institutions: European Commission, Secretariat-General
Subjects: EU aid, EU borrowing, EU restrictive measure, Russia, Russo-Ukrainian issue, Ukraine, damages, economic stabilisation, freezing of assets

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   EUROPEAN COMMISSION  Brussels, 3.12.2025  COM(2025) 3501 final 2025/3501 (NLE)  Proposal for a COUNCIL REGULATION on emergency measures addressing the serious economic difficulties caused by Russia's actions in the context of the war in Ukraine  
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

Russia’s  military  aggression  against  Ukraine  has  marked  the  dramatic  return  of  territorial 
conflict and high-intensity warfare on European soil. This structural change in the European 
security and defence and European geopolitics, has led Member States to rethink their defence 
plans and capacities.  

This  security  context  has  further  drastically  and  brutally  deteriorated  since  early  2025.  The 
EU and its Member States now face an intensifying Russian aggression against Ukraine and a 
growing security threat from Russia, with the recent intensification of hybrid attacks over the 
territory of Member States. It is also now clear that this threat will persist in the foreseeable 
future, considering that Russia has shifted to a war-time economy enabling a rapid scaleup of 
its military capabilities and replenishment of its stocks. 

There is a security impact to this context but also a serious economic impact. The unjustified 
and unprovoked war against Ukraine triggered a shock to the Union economy through serious 
supply disruptions, higher uncertainty, increased risk premia, lower investment and consumer 
spending  in  the  Union.  In  addition  to  the  loss  of  economic  growth  and  purchasing  power, 
Russia’s  actions  have  led  to  significant  direct  fiscal  costs  for  Member  States.  These  fiscal 
costs are a result of efforts by Member States to mitigate these economic impacts and increase 
their own defence capabiliites in answer to the increased security threat. 

Given  this  exceptional  situation,  which  depends  on  external  factors  which  are  beyond  the 
control  of the Member  States, but  which seriously  impacts  their economies, and is  likely  to 
affect  them  even  more  if  immediate  action  is  not  taken  to  allow  Ukraine  to  continue  to 
support  its  war  effort  and  to  limit  the  capacity  of  Russia  to  continue  the  intensification  of 
hybrids  attacks  over  the  territory  of  the  Union,  a  swift  and  coordinated  response  at  the 
Union’s level is therefore needed. 

In  this  situation  it  is  appropriate,  as  a  first  measure,  to  prohibit,  on  a  temporary  basis,  any 
direct or indirect transfer to or for the benefit of the Central Bank of Russia, or to or for the 
benefit  of  any  legal  person,  entity  or  body  acting  on  behalf  of,  or  at  the  direction  of,  the 
Central Bank of Russia, such as the Russian National Wealth Fund, in order to ensure that the 
assets and reserves of the Central Bank of Russia are not transferred to or for the benefit of 
Central Bank of Russia and therefore Russia.  

Preventing that funds are transferred to Russia is urgently required to limit the damage to the 
Union’s  economy.  In  the  absence  of  a  prohibition  to  transfer  the  assets  and  reserves  of  the 
Central Bank of Russia, these resources could be expected to be used to support Russia’s war 
effort  against  Ukraine  and  hybrid  activities  in  the  EU,  thereby  deepening  the  economic 
difficulties in the Union. 

As a second measure, it is also appropriate, under the current circumstances, to use drawing 
on  the  cash  balances  of  central  securities  depositories  or  other  financial  entities  which  hold 
assets and reserves of the Central Bank of Russia in order to ensure their prudent management 
by central securities depositories and their contribution to objective ensuring the maintenance 
of the economic stability of the Union. 

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These  central security  depositories  should reinvest,  on a daily basis for the whole period of 
application  of  this  Regulation,  an  amount  not  exceeding  the  amount  of  cash  balances 
accumulating  exclusively  due  to  the  restrictive  measures  in  a  Union  debt  instrument  in 
accordance with an accompanying proposal concerning a Reparations Loan to Ukraine.  

Obliging  the  central  security  depositories  to  invest  the  cash  balances  in  question  into  a 
Reparations Loan should allow the Union to make use, during a limited period of time, of the 
amounts  which  are  available  on  these  accounts  for  purposes  which  would  allow  to  mitigate 
the continuous serious economic difficulties within the Union caused by Russia’s unjustified 
and unprovoked invasion of Ukraine, while preserving the sustainability of public finances in 
a context where they are faced with additional fiscal needs to address the consequences of the 
war. In this context, the Reparations Loan should allow Ukraine to close its budgetary needs 
and  increase  its  capacity  to  defend  itself  against  Russia.  Without  this  loan,  it  can  be 
anticipated, in the current international context, that Ukraine will by April 2026 not be able to 
support its fiscal needs, entailing a realistic risk of defeat in a rather short term. 

• 

Consistency with existing policy provisions in the policy area 

This initiative will complement existing initiatives to provide EU support to Ukraine, such as 
the Ukraine Facility. 

• 

Consistency with other Union policies 

This proposal is consistent with other Union policy areas. In particular, it is without prejudice 
to  appropriate  measures  adopted  by  the  Council  under  the  Common  Foreign  and  Security 
Policy,  notably  Regulation  (EU)  No  833/2014  concerning  restrictive  measures  in  view  of 
Russia’s actions destabilising the situation in Ukraine, which continue to apply in parallel and 
which  have  a  scope  of  application  and  pursue  objectives  specific  to  Article  29  TEU  and 
Article 215 TFEU. The present proposal pursues objectives which are specific to the area of 
economic  stability  of  the  Union.  Its  field  of  application  is  limited  to  emergency  measures 
needed  to address  the  serious  economic  difficulties  within  the  Union  caused  by  Russia’s 
actions  in  the  context  of  the  war  in  Ukraine  and  the  risk  of  further  deterioration  of  the 
economic  situation.  In  that  sense,  the  measures  proposed  here  and  those  in  Regulation 
833/2014 are not mutually exclusive, but are complementary, each having its own scope, and 
aim to achieve different objectives.   

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

The  legal  basis  for  this  instrument  is  Article  122,  paragraph  1,  of  the  Treaty  on  the 
Functioning of the European Union (TFEU).  

This  Article,  which  is  part  of  chapter  1  “Economic  policy”  of  Title  VIII  “Economic  and 
monetary Policy”, allows the Council, based on a proposal of the Commission to decide, in a 
spirit  of  solidarity  between  the  Member  States  upon  measures  appopriate  to  the  economic 
situation,  in  particular  –  but  not  only  –  if  severe  difficulties  arise  in  the  supply  of  certain 
products.  This  Article  applies  without  prejudice  to  other  procedures  provided  for  in  the 
Treaties. 

In  the  present  case,  the  intervention  is  justified  by  the  need  to  preserve  the  stability  of  the 
economy  of  the  Union  which  has  been  affected  by  the  unjustified  and  unprovoked  war  of 
Russia  against  Ukraine  and  by  the  different  measures  and  acts  of  hybrid  nature  of  Russia 

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targeting  the  territory  of  the  Union,  its  Member  States  or  its  undertakings.  The  economic 
situation could be  further destabilised if the security context was  to  further deteriorate, as a 
result of Russia’s intervention in Ukraine or in the Member States. There is no other provision 
in  the  Treaties  which  allows  the  Council  to  adopt  measures  to  preserve  the  economy  in  a 
situation of crisis. 

The  economic  stability  of  the  Union  is  largely  dependent  on  the  security  context  over  its 
territory, which is particularly threatened by Russia’s actions in Ukraine and in the Member 
States. This Regulation therefore aims at avoiding that Russia obtains additional resources to 
fuel its war economy that it largely uses against Ukraine but also, against the Member States 
of  the  Union,  by  continued  hybrid  campaign,  including  sabotage,  disruption  of  critical 
infrastructure,  cyber-attacks,  information  manipulation  and  interference  and  attempts  to 
undermine democracy including in the electoral process. This objective justifies a prohibition 
of direct or indirect transfers of assets and reserves for the benefit of Russia or other related 
beneficiaries. The proposed Regulation also aims at allowing Ukraine to be able to support its 
fiscal  needs  as  a  country  at  war  while  also  increasing  the  industrial  defence  cooperation 
between the Union and Ukraine to reinforce their mutual capacities to preserve their security. 
Indeed, Ukraine is considered as an integral part of Europe’s defence and security architecture 
and this latter is intrinsically connected with the economic situation of the Union. 

Finally, action at Union level to preserve the stability of the economy of the Union ensures the 
solidarity between the Member States and for all the Member States. The intervention which 
is  proposed  contributes  in  particular  to  the  protection  of  the  Member  States  which  are  the 
most  exposed  to  significant  economic  repercussions  should  the  security  context  at  borders 
with Ukraine and Russia further deteriorate. 

• 

Subsidiarity (for non-exclusive competence)  

The measures envisaged aim at preserving the stability of the economy of the whole Union. 

Action at Union level is necessary in order to allow the adoption of measures appropriate to 
the economic situation, in a spirit of solidarity with all the Member States. Since most of the 
assets and reserves of the Central Bank of Russia are located on the territory of one Member 
State,  it  would  not  be  possible  for  the  other  Member  States  to  take  equivalent  measures  at 
national level, even if their are particularily exposed to economic consequences resulting from 
actions by Russia.  

• 

Proportionality 

The  proposal  respects  the  proportionality  principle.  The  prohibition  of  transfer  that  the 
proposed  Regulation  establishes  only  targets  the  assets  and  reserves  of  the  Central  Bank  of 
Russia, which is ultimately Russia which is responsible of the war in Ukraine and of different 
types of hybrid attacks which have entailed economic consequences in the Union. No measure 
other  than  this  temporary  probition  can  allow  to  attain  the  objective  of  avoiding  to  provide 
substantial additional resources to Russia  to fuel  its war economy.   Moreover, the measures 
proposed in this Regulation are temporary and subject to regular review of the appropriateness 
of  the  instrument.  Therefore,  they  do  not  go  beyond  what  is  necessary  to  achieve  the 
objectives sought by the instrument. 

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Choice of the instrument 

This  act  takes  the  form  of  a  Regulation  because  it  creates  a  new  specific  and  temporary 
instrument that has to be binding in its entirety and directly applicable in all Member States. 
The form of a Regulation has been used in all the acts involving Article 122 TFEU.  

3. 

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Ex-post evaluations/fitness checks of existing legislation 

The proposal is a new instrument that is not connected with an existing act. 

• 

Stakeholder consultations 

Due to the urgency to prepare the proposal so that it can be adopted in a timely manner by the 
Council, a stakeholder consultation could not be carried out.  

• 

Collection and use of expertise 

Not relevant. 

• 

Impact assessment 

Due to the urgent nature of the proposal, no impact assessment was carried out. 

• 

Regulatory fitness and simplification 

Not relevant. 

• 

Fundamental rights 

The  measures  create  new  obligations  for  legals  entities  holding  assets  and  reserves  of  the 
Central  Bank  of  Russia  for  the  purpose  of  alleviating  the  Russian  aggression.  Given  the 
context  in  which  these  measures  are  taken  and  the  fact  that  these  measures  pursue  a  public 
policy  objective  of  avoiding  the  deterioration  of  the  economy  in  a  security  crisis  situation, 
these measures fully respect the fundamental rights and freedoms recognised in the Charter of 
Fundamental Rights, in particular Article 17 thereof, as they are justified and proportionate to 
the objectives pursued in line with Article 52. They do not beyond what is necessary to pursue 
this objective in so far as they only affect the use of cash balances generated by the assets and 
reserves  of  the  Central  Bank  of  Russia  and  do  not  lead  to  a  deprivation  of  the  rights  of 
property of financial institutions. 

4. 

BUDGETARY IMPLICATIONS 

This  proposal  does  not  require  additional  resources  from  the  EU  budget.  All  financial 
questions are covered in the regulation establishing the Reparations Loan.  

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5. 

• 

OTHER ELEMENTS 

Detailed explanation of the specific provisions of the proposal 

Article  1  of  the  proposed  Council  Regulation  provides  for  exceptional  and  time-limited 
emergency measures addressing the serious economic difficulties within the Union caused by 
Russia’s  actions  in  the  context  of  the  war  in  Ukraine.  These  measures  aim  to  prevent  that 
important resources are made available to Russia and aim to generate the financial resources 
needed to support Ukraine. 

Article 2 of the proposed Regulation sets out that any direct or indirect transfer of assets and 
reserves to or for the benefit of the Central Bank of Russia or related entities, is prohibited. 

Article  3  of  the  proposed  Regulation  establishes  reporting  obligations  for  legal  entities  that 
hold,  control  or  are  a  counterparty  to  assets  and  reserves  of  the  Central  Bank  of  Russia  or 
related  entities.  It  also  details  requirements  to  cooperate  with  the  Commission  in  any 
verification of the information received. 

Article 4 of the proposed Regulation lays down requirements for the management of the cash 
balances  corresponding  to  the  concerned  assets  and  reserves.  In  the  event  that  amounts  are 
enforced  against  a  Member  State  following  an  investor-State  arbitral  award  regarding  the 
assets of the Central Bank of Russia or related entities, these amounts are to be deducted from 
relevant liabilities. 

Article 5 of the proposed Regulation  establishes safeguards for claims  that  are made by the 
Russian Federation, the Central Bank of Russia, related entities, or any persons acting on their 
behalf,  that  are  in  connection  with  this  Regulation.  Any  judicial,  arbitral  or  administrative 
decision obtained on the basis of such claims shall not be recognised, given effect or enforced 
in the Union. These safeguards also concern relevant legal entities established in the Union, 
which shall be entitled to recover any direct or indirect damages, including legal costs, caused 
by expropriation, seizure, confiscation, transfer or measures having similar effects in respect 
of their assets. 

Article  6  of  the  proposed  Regulation  sets  out  a  review  clause  of  this  Regulation  by  the 
Commission. A report of the main findings of these reviews will be presented to the Council. 

Article  7  of  the  proposed  Regulation  details  the  modalities  for  its  entry  into  force  and 
application.  The  Regulation  will  apply  until  the  Council  decides  that  Russia’s  actions  in 
Ukraine  and  in  the  Member  States  have  objectively  ceased  to  pose  substantial  risks  for  the 
stability of the economy of the Union, taking into account whether Russia has ceased its war 
of aggression against Ukraine and provided reparations to Ukraine. 

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2025/3501 (NLE) 

Proposal for a 

COUNCIL REGULATION 

on emergency measures addressing the serious economic difficulties caused by Russia's 
actions in the context of the war in Ukraine 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 122(1) thereof, 

Having regard to the proposal from the European Commission, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

On  24  February  2022,  the  President  of  the  Russian  Federation  announced  a  military 
operation  in  Ukraine  and  Russian  armed  forces  began  an  attack  on  Ukraine.  That 
attack is a blatant violation of the territorial integrity, sovereignty and independence of 
Ukraine. Since then, the aggression against Ukraine has continuously escalated and the 
Russian destabilising activities and hybrid campaign have extended to the territory of 
Member States of the Union. 

In  addition  to  a  devastating  impact  on  the  Ukrainian  economy,  Russia’s  war  of 
aggression  against  Ukraine  and  Russia’s  action  against  the  Union  have  created  and 
continue to create serious economic challenges outside Ukraine. Given the proximity 
of  the  Union  to  Russia’s  war  and  Russia’s  actions  against  the  Union,  the  Union’s 
economy has been affected and is expected to continue to be affected as long as Russia 
persists in its war of aggression. Furthermore, it is expected that the Union’s economy 
would be affected even more severely should the situation in Ukraine deteriorate. 

The  unjustified  and  unprovoked  war  against  Ukraine  triggered  a  shock  to  the  Union 
economy through serious supply disruptions, higher uncertainty, increased risk premia, 
and  lower  investment  and  consumer  spending  in  the  Union.  As  a  result,  the  annual 
average GDP growth in 2022–2023 was 1.9 percentage points lower than projected in 
the Commission’s 2021 Autumn Forecast for the median Member State.  

In particular, Russia’s full-scale invasion of Ukraine in February 2022 sent oil, gas and 
food prices sharply higher, as markets adjusted to the loss or potential loss of exports 
from two major commodity suppliers. It also directly resulted in a disruption of supply 
chains for Union imports from Ukraine, especially cereals and vegetable oils, as well 
as for exports from the Union to Ukraine, creating a particularly severe impact on the 
agriculture,  food  processing,  fisheries  and  aquaculture  sectors  in  the  Union.  Some 
metals  and  raw  materials  have  become  in  short  supply,  because  of  the  military 
aggression and the retaliatory measures taken by Russia, increasing costs for Union’s 
industries.  

(5) 

In  light  of  the  negative  impacts  on  energy  markets  caused  by  Russia’s  actions, 
Member States have put  in  place support to  households and undertakings.  The fiscal 
measures  adopted by the Member States in  the period 2022 to  2024 to  minimise the 
macroeconomic and social impact of high energy prices amounted to more than EUR 

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(6) 

(7) 

(8) 

(9) 

365  billion.  On  17  March  2023,  the  Commission  adopted  its  Communication  on  a 
Temporary  Crisis  and  Transition  Framework  for  State  Aid  measures  to  support  the 
economy following the aggression against Ukraine by Russia1 which was followed on 
4 July 2025 by a Communication on a Framework for State Aid measures to support 
the  Clean  Industrial  Deal  which  pursues  (Clean  Industrial  Deal  State  Aid 
Framework)2. 

Russia’s  aggression  against  Ukraine  and  its  weaponisation  of  energy  supplies  also 
exacerbated  the  urgency  for  the  Union  to  reduce  its  dependence  on  fossil  fuels  by 
accelerating  the  roll-out  of  renewable  energy,  decarbonisation  of  industry  and  the 
deployment  of  capacities  in  sectors  strategic  to  the  transition  towards  a  net-zero 
economy,  also  considering  global  challenges  posing  a  threat  of  investments  in  these 
sectors  being  diverted  in  favour  of  third  countries  outside  the  EEA.  At  its  level,  the 
Union  has  taken  several  measures  to  respond  to  the  energy  crisis,  including  the 
REPowerEU that aimed at accelerating the transition to green energy and increase the 
Union  energy  independence.  Under  REPowerEU,  an  additional  EUR  20  billion  was 
made available to Member States through Regulation (EU) 2021/241 of the European 
Parliament and of the Council3 to address the energy crisis resulting from the impact 
of Russia’s war of aggression. 

In  addition,  Russia  has  been  negatively  impacting  the  Union  economy  and  business 
through  the  seizure,  confiscation  or  forced  sale  of  economic  assets  within  Russia 
belonging to Union investors. Such impact comes on top of the separate payments and 
taxes  levied  on  Union  entities  and  investors  alongside  significant  restrictions  on  the 
free movement  of capital,  which in  turn create distortions  to investments, companies 
and  markets.  The  risks  of  further  asset  seizures  remain  elevated,  given  the  existing 
exposure  and  inability  to  exit  the  Russian  market.  In  that  context,  on  30  September 
2025, the President of the Russian Federation signed a decree for the accelerated sale 
of assets following their seizure.  

In  addition  to  the  loss  of  economic  growth  and  purchasing  power,  Russia’s  actions 
have led to  significant  direct  fiscal  costs for Member States. This  has happened  in  a 
period where Member State’s finances are still recovering from the COVID 19 crisis. 
A  significant  part  of  the  budget  of  the  Union  has  also  had  to  be  redirected  towards 
measures aimed at addressing the direct and indirect consequences of the war.  

These  different  elements  show  that  the  war  in  Ukraine  has  already  had,  and  is 
continuing to have, direct and indirect repercussions on the economy of the Union and 
has  significantly  impacted  the  fiscal  situation  of  the  Member  States.  Despite  all  the 
measures taken at Union and Member State level, the effects of the disruptions caused 
by the war in Ukraine and other actions by Russia on the territory of the Union have 
directly  and  indirectly  affected  the  Union’s  economic  performance  and  have 
significantly impacted the fiscal situation of the Member States.  

(10)  Given this exceptional situation, which depends on external factors which are beyond 
the control of the Member States, but which seriously impacts their economies, and is 
likely  to  affect  them even more if immediate action is  not taken to  allow Ukraine to 

1 
2 
3 

EN 

(2023/C 101/03) 
(C/2025/3602) 
Regulation  (EU)  2021/241  of  the  European  Parliament  and  of  the  Council  of  12  February  2021 
establishing 
17, 
the  Recovery 
ELI:http://data.europa.eu/eli/reg/2021/241/oj). 

and  Resilience  Facility 

18.2.2021, 

(OJ  L 

57, 

p. 

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  EN 

 
continue  to  support  its war  effort  and  to  limit  the  capacity  of  Russia  to  continue  the 
intensification  of  hybrids  attacks  over  the  territory  of  the  Union,  a  swift  and 
coordinated response at Union level is therefore needed. Such action should be taken 
in  a  spirit  of  solidarity  between  Member  States  in  order  to  avoid  the  unequal 
repercussions  that  an  increase  of  the  threat  by  Russia  could  entail  on  the  Member 
States,  and  in  particular  on  those  which  are  the  closest  to  the  borders  of  Russia  and 
Ukraine.  This  response  is  without  prejudice  to  appropriate  measures  adopted  by  the 
Council  under  the  Common  Foreign  and  Security  Policy  in  relation  with  sanctions 
against Russia in relation to restrictive measures against Russia. 

(11)  The  need  for  urgent  action  arises  from  a  combination  of  factors:  the  recent 
deterioration  of  the  security  situation  in  Ukraine  and  in  the  Member  States,    the 
uncertainties in relation to the capacity of Ukraine to cope with its fiscal needs in 2026   
as well as the need for the Union, in light of the recent intensification of hybrid attacks 
over the territory of Member States, to increase its efforts to strengthen the European 
Defence  Technical  and  Industrial  Basis  (European  DTIB),  including  by  establishing 
broader cooperation with Ukraine on these matters. In the current context, the stability 
of  the  economic  situation  of  the  Union  is  highly  dependent  on  these  different 
parameters and of their evolution in time. 

(12) 

In this situation it is appropriate, as a first measure, to prohibit, on a temporary basis, 
any direct or indirect transfer to or for the benefit of the Central Bank of Russia, or to 
or  for  the  benefit  of  any  legal  person,  entity  or  body  acting  on  behalf  of,  or  at  the 
direction of, the Central Bank of Russia, such as the Russian National Wealth Fund, in 
order  to  ensure  that  the  assets  and  reserves  of  the  Central  Bank  of  Russia  are  not 
transferred to or for the benefit of Central Bank of Russia and therefore Russia.  

(13)  The transfer of funds to Russia must be prevented as a matter of urgency to limit the 
damage to the Union’s economy. Military spending has largely driven Russia’s robust 
growth  since  2022,  but  the  pace  of  Russia’s  economic  expansion  has  weakened 
markedly in 2025. The slowdown reflects inter alia the adverse impact of accumulated 
imbalances, notably high inflation and interest rates. The fiscal situation of Russia has 
worsened  further  in  2025,  as  oil  prices  have  dropped,  the  Ruble  appreciated  and 
Western sanction efforts once more intensified. Given Russia’s fiscal position, it can 
be expected that any additional resources received will be directly used to finance its 
unjustified and unprovoked war against Ukraine. 

(14)  This would create serious difficulties for the Union’s economy for two main reasons. 

(15)  Firstly,  it  would  exacerbate  the  risk  of  an  escalation  of  hybrid  belligerent  activities 
targeted  against  Member  States  and  in  the  territory  of  the  Member  States,  creating 
additional  economic  disruptions  and  fiscal  and  economic  costs,  and  adding  to 
economic  uncertainty.  In  its  conclusions  of  26  June  2025  the  European  Council 
strongly  condemned  all  types  of  hybrid  activities,  in  particular  Russia’s  continued 
hybrid  campaign,  including  sabotage,  disruption  of  critical  infrastructure,  cyber-
attacks,  information  manipulation  and  interference,  and  attempts  to  undermine 
democracy,  including  in  the  electoral  process.  In  those  conclusions,  the  European 
Council noted that the Union and the Member States will continue to strengthen their 
resilience, prevent, deter and respond to Russia’s hybrid threats. 

(16)  Russia’s  hybrid  activities  are  increasingly  used  in  an  attempt  to  destabilise  not  only 
Ukraine  but  also  the  Member  States  and  the  Union  (for  example  through  sabotages, 
drones,  economic  espionage,  interference  in  election  processes  and  misinformation 

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campaigns).  In  this  context,  the  Union  and  its  Member  States  and  businesses  have 
suffered direct costs in addressing Russia’s hybrid campaign. 

(17) 

In  the  absence  of  a  prohibition  on  the  transfer  of  assets  and  reserves  of  the  Central 
Bank  of  Russia,  it  is  likely  that  those  resources  could  be  used  to  support  that 
campaign, thereby deepening the economic difficulties in the Union. For example, in 
recent  weeks  the  airspace  has  been  violated  over  Belgium,  the  Netherlands,  Poland, 
Romania,  Denmark,  Estonia,  Germany,  Lithuania,  and  Latvia.  These  incidents  are  a 
pattern, not an accident. 

(18)  Secondly,  the  availability  of  additional  funds  for  Russia’s  war  of  aggression  risks 
prolonging  and  aggravating  economic  uncertainty  and  will  require  a  greater  fiscal 
response  from  the  Union  and  its  Member  States  to  support  Ukraine  and  the  Union’s 
economy. 

(19)  The European Council Conclusions from 23 October 2025 recognise that Russia’s war 
of aggression against Ukraine and its repercussions for European and global security 
in a changing environment constitute an existential challenge for the Union. The Joint 
Communication of the High Representative and of the Commission Preserving Peace, 
Defence Readiness 2030 Roadmap4 indicates that Ukraine remains Europe’s first line 
of defence and is an integral part of Europe’s defence and security architecture. 

(20) 

(21) 

In this context, should Russia’s war of aggression continue, it can be expected that the 
repercussions on the Union’s economy would be even more severe in the case where 
Ukraine  would  not  be  able  to  support  the  fiscal  efforts  that  are  necessary  for  the 
continuation of its war  effort. A defeat  by Ukraine would also  be associated with  an 
increased risk of aggression by Russia against one of the Member States or a country 
in  the  neighbourhood  of  Ukraine,  including  candidate  countries,  having  direct  and 
indirect  repercussions  on  the  security  and  economic  situation  in  the  Union.  Such  a 
situation would further increase the level of uncertainty for economic operators. This 
impact is likely to be more severe in the Member States which are closer to the borders 
of  Ukraine  and  of  Russia  and  Belarus.  Recent  econometric  analysis  by  the 
Commission suggests that due to the war GDP growth in 2022–2023 was already 1.4–
1.8 percentage points lower in Member States bordering the countries at war compared 
to the Union average, with losses only moderating slightly when extended to 2024. 

In  October  and  November  2025,  Russian  air  attacks  targeting  transport  networks, 
residential  areas  and  energy  infrastructure  in  Ukraine  intensified  further.  Russia 
launched  seven  large-scale  combined  missile  and  long-range  drone  attacks,  causing 
severe  disruptions  to  Ukrainian  energy  production  and  resulting  in  the  need  for 
additional gas imports for the heating season. The most devasting attacks took place in 
the nights of 7 November, involving over 500 drones and missiles, and 24 November, 
with  464  drones  and  22  missiles.  According  to  figures  presented  by  the  UN  Human 
Rights  Monitoring  Mission  in  Ukraine  on  25  November  2025,  civilian  casualties  in 
major  cities  in  2025  (January  to  October)  increased  26%  compared  to  the  previous 
year, while civilian injuries increased 75% over the same period. Since the start of the 
full-scale invasion by Russia, at least 14,534 civilians have been killed, including 745 
children, and 38,472 injured, including 2,349 children. 

(22)  Additionally,  the  military  aggression  against  Ukraine  by  Russia  has  already  led  to  a 
major  displacement  of  Ukrainian  citizens  both  internally  and  in  neighbouring 

4 

JOIN(2025) 27 final 

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countries,  with  an  unprecedented  inflow  into  the  Union  of  refugees,  with  major 
humanitarian  and  economic  consequences  on  the  Member  States.  In  particular,  the 
Union  and  its  Member  States  have  had  and  continue  to  have  to  make  an  important 
fiscal  effort  to  host  Ukrainian  refugees.  Russia’s  invasion  of  Ukraine  has  forced 
millions of people to flee their country to safety, mostly towards Member States. By 
the end of September 2025, a total  of 4.3 million  non-EU citizens  who fled Ukraine 
have received temporary protection under Directive (EU) 2001/55/EU. Since 2022, the 
gross fiscal cost associated with hosting refugees for the Union is estimated  at about 
0.2% of GDP per year and different estimations show that the resulting fiscal costs for 
the Member States in the period between 2022 and 2025 could reach above EUR 155 
billion.  A  further  escalation  of  Russia’s  war  of  aggression  could  lead  to  additional 
increases of refugee flows. 

(23)  As  a  consequence  of  Russia’s  actions  in  Ukraine,  which  pose  a  direct  threat  to  the 
security  situation  in  the  Union,  the  Union  and  its  Member  States  have  had  to 
substantially  increase  their  investments  in  defence  capabilities.  Since  the  start  of 
Russia’s  war  of  aggression  against  Ukraine  in  February  2022,  the  Union  defence 
expenditure-to-GDP  ratio  has  increased  by  around  0.25  percentage  points,  reaching 
1.5%  of  GDP  in  2024  (or  around  EUR  270  billion).  On  28  May  2025,  the  Council 
adopted, as an emergency measure, Council Regulation (EU) 2025/11065 which aims 
to  provide  financial  assistance  to  Member  States  to  allow  them  to  support  their 
defence  industrial  readiness.  The  Commission  Autumn  2025  Forecast  projects  a 
further increase in defence spending of around 0.5 percentage points by 2027, when it 
would reach 2.0% of GDP (or around EUR 405 billion). In addition to these economic 
consequences  for  the  Union’s  economy  caused  by  Russia’s  war  of  aggression  in 
Ukraine,  Russia  is  itself  causing  direct  economic  impacts  on  the  Union’s  economy 
through its actions. This would be aggravated if Russia had access to additional funds 
in the absence of a transfer prohibition. 

(24) 

In  light  of  these  different  considerations,  ensuring  a  prohibition  of  the  transfer  of 
assets and reserves of the Central Bank of Russia to or for the benefit of the Central 
Bank of Russia and therefore Russia is a measure that is appropriate in order to avoid 
further  repercussions  on  the  economic  situation  of  the  Union  caused  by  Russia’s 
actions. In so far as it is limited in time and reversible, it does not go beyond what is 
necessary to pursue that objective. 

(25)  As a second measure, it is also appropriate, under the current circumstances, to draw 
on  the  cash  balances  of  financial  institutions  which  hold  assets  and  reserves  of  the 
Central  Bank  of  Russia in  order  to  ensure  that  these  amounts  are  managed  in  a  way 
which  ensures  the  maintenance  of  the  economic  stability  of  the  Union  while  not 
undermining their prudent management. 

(26) 

Indeed,  under  Union  restrictive  measures,  balance  sheet  management  transactions 
linked  to  assets  and  reserves  of  the  Central  Bank  of  Russia  or  linked  to  assets  and 
reserves of any legal person, entity or body acting on behalf of, or at the direction of, 
the  Central  Bank  of  Russia,  such  as  the  Russian  National  Wealth  Fund,  remain 
possible.  They  include  in  particular  the  reinvestment  of  cash  balances,  which  are 

5 

Council  Regulation  (EU)  2025/1106  of  27  May  2025  establishing  the  Security  Action  for  Europe 
(SAFE)  through  the  Reinforcement  of  the  European  Defence  Industry  Instrument  (OJ  L,  2025/1106, 
28.05.2025, ELI:http://data.europa.eu/eli/reg/2025/1106/oj). 

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accumulating  in  particular  due  to  immobilised  coupon  or  dividend  and  redemption 
payments and maturing deposits, in line with a prudent investment policy.  

(27)  The prohibition of those transactions means that cash balances remain blocked on the 
accounts  of  financial  institutions.  In  particular,  it  generates  an  extraordinary  and 
unexpected accumulation of cash balances on the balance sheets  of central  securities 
depositories  within  the  meaning  of  Regulation  (EU)  No  909/2014  of  the  European 
Parliament  and  of  the  Council (6).  It  is  therefore  appropriate  to  establish  measures 
necessary for the prudent management by financial institutions in the form of specific 
regulatory  rules  for  balance  sheet  management  transactions  of  financial  institutions 
holding  reserves  and  assets  of  the  Central  Bank  of  Russia.  Upon  receipt  of  the 
Commission’s  call  for  funds,  financial  institutions  should  reinvest  an  amount  not 
exceeding the amount of cash balances accumulating exclusively due to the restrictive 
measures in a Union debt instrument in accordance with the [Regulation establishing 
the Reparations Loan]. The reinvestment by central securities depositories referred to 
in  the  preceding  subparagraph  should  be  notwithstanding  Article  46  of  Regulation 
(EU)  909/2014,  and  should  be  undertaken  on  a  daily  basis.  for  the  whole  period  of 
application of this Regulation. 

(28)  Obliging the financial institutions which hold assets and reserves of the Central Bank 
of Russia to invest the cash balances in question into a debt instrument in accordance 
with  the  [Regulation  establishing  the  Reparations  Loan]  should  allow  the  Union  to 
make use, during a limited period of time, of the amounts which are available on these 
accounts for purposes which  would allow to mitigate the continuous serious economic 
difficulties within the Union caused by Russia’s unjustified and unprovoked invasion 
of Ukraine, while preserving the sustainability of public finances  in a context where 
they are faced with additional fiscal needs to address the consequences of the war. In 
this  context,  the  Reparations  loan  should  allow  Ukraine  to  meet  its  budgetary  needs 
and  increase  its  capacity  to  defend  itself  against  Russia,  which  contributes  to  the 
security  of  the  Union  on  which  the  stability  of  the  economy  of  the  Union  depends. 
Moreover, in the present security context, the capacity of the Union and of its Member 
States to defend themselves and increase deterrence against any kind of aggression or 
interference on their territory is also fundamental to ensure the economic stability of 
the  Union.  The  [Regulation  establishing  the  Reparation  Loan]  will  contribute  to  that 
objective by increasing defence industry cooperation between the Union and Ukraine, 
contributing to the ramp up of their mutual defence capacity, alongside the cooperation 
established  under  Regulation  [EDIP  Regulation]  and  of  the  SAFE  instrument 
established by Regulation (EU) 2025/1106. 

(29)  The use of the proceeds from the investment of cash balances stemming from transfer 
restrictions regarding the assets of the Russian Central Bank through the Reparations 
Loan aims to address  an economic situation within the EU and is appropriate to that 
situation.  It  will  alleviate  the  fiscal  burden  on  Member  States  of  the  indispensable 
support to Ukraine.  

(30)  The war has a massive effect on the fiscal capacity of Ukraine to support the war effort 
and the direct and indirect consequences of the war. The recent intensification of the 

6 

Regulation  (EU)  No 909/2014  of  the  European  Parliament  and  of  the  Council  of  23 July  2014  on 
improving  securities  settlement  in  the  European  Union  and  on  central  securities  depositories  and 
amending  Directives  98/26/EC  and  2014/65/EU  and  Regulation  (EU)  No 236/2012  (OJ  L  257, 
28.8.2014, p. 1, ELI:http://data.europa.eu/eli/reg/2014/909/oj). 

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war has dramatically exacerbated the needs. On 7 September 2025, Russia launched its 
largest ever aerial attack on Ukraine, using 810 drones, four ballistic missiles and nine 
cruise  missiles.  Moreover,  September  and  October  2025  have  been  the  months  with 
the  highest  number  of  attacks  on  energy  infrastructure  since  the  start  of  the  war, 
causing power outages  across most regions of the country. Such attacks, which have 
been utilised throughout the war, are particularly problematic during winter, increasing 
the  risks  to  civilians  through  disruptions  to  heating  and  electricity.  To  address  this, 
Ukraine is having to increase its military expenditure, now needing around EUR 108 
billion  a  year.  Whilst  Ukraine  has  increased  domestic  revenue  mobilisation  to  help 
address this, around half has to be covered by in-kind military assistance from donors. 
This situation has recently become acute due to the decision of the US administration 
not to seek congressional approval for any new funding for US military assistance to 
Ukraine. Whilst the US administration has continued to deliver military assistance that 
was committed by the previous administration, as of November 2025 this has largely 
expired, leaving a significant deficit in the military assistance provided to Ukraine. 

In  that  context,  on  15  September,  Ukraine  presented  its  draft  budget  for  2026.  To 
address  the  war,  that  budget  projects  defence  and  security  expenditure  of  EUR  56 
billion, supported by EUR 52 billion of in-kind military assistance. Given the negative 
impact of the war on Ukraine’s economy, that budget projects that, in addition to the 
necessary in-kind military assistance, EUR 43 billion of international financial support 
is needed. As of November 2025, only EUR 22 billion has been firmly committed. If 
the Union does not rapidly come up with a swift solution to allow Ukraine to support 
its budgetary needs and in particular its war efforts, it can be anticipated, in the current 
international context, that by April 2026, Ukraine will not be able to support its fiscal 
needs, entailing a realistic risk of defeat in the rather short term. 

(31) 

(32)  The Union and its Member States are the largest donors to Ukraine. Since the start of 
the  war,  they  have  supported  Ukraine  and  its  citizens  through  direct  budgetary  and 
financial commitments, mobilising EUR 187.3 billion. This includes EUR 85.6 billion 
enabled  by  the  Union  budget  through  a  series  of  programmes  for  macro-financial 
assistance,  including  the  loans  provided  under  the  Ukraine  Loan  Cooperation 
Mechanism;  financial  assistance  and  budgetary  support  under  the  Ukraine  Facility; 
humanitarian aid and emergency support; crisis response;  and assistance and funding 
for early recovery and reconstruction. Out of this total amount of EUR 187.3 billion, 
Member  States  have  provided  individually  or  through  the  European  Peace  Facility, 
military support in the value of EUR 66 billion. However, the capacity of the Union 
and of its Member States to provide additional funding to Ukraine is currently limited 
and does not correspond to the magnitude of the needs. 

(33)  Mobilisation  of  additional  significant  resources  by  the  Member  State  to  be  able  to 
finance  Ukraine  would  constitute  an 
its 
Communication  of  19  March  20257,  the  Commission  invited  all  Member  States  to 
make  use  of  the  flexibility  provided  by  the  national  escape  clause  in  a  coordinated 
manner with a view to maximising the impact on the Union’s defence capabilities. So 
far,  Belgium,  Bulgaria,  Czechia,  Denmark,  Germany,  Estonia,  Finland,  Greece, 
Croatia,  Latvia,  Lithuania,  Hungary,  Poland,  Portugal,  Slovenia  and  Slovakia  have 
decided to request the activation of the clause. While such an activation constitutes an 
appropriate  means  for  Member  States  to  increase  their  defence  expenditures  without 

important  economic  challenge.  In 

7 

Commission Communication (C (2025) 2000 final) of 19 March 2025. 

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breaching commitments under EU fiscal rules, its effects are also limited by the fiscal 
constraints  of  Member  States  that  have  been  seriously  impacted  by  a  succession  of 
crises during the last decade. 

(34)  Additionally, a speedy recovery of Ukraine, supported through the Reparations Loan, 
would be beneficial for the internal market. Considering that Ukraine is a candidate to 
accede  to  the  Union,  this  support  is  a  strategic  investment  of  the  Union  in  peace, 
security,  stability  and  prosperity  in  Europe  and  allows  the  Union  to  be  better 
positioned to address global challenges. It also provides increased economic and trade 
opportunities  to  the  mutual  benefit  of  the  Union  and  Ukraine,  while  supporting  a 
gradual transformation of the country.  

(35)  The use of proceeds from investments of cash balances is therefore inextricably linked 

to mitigating the serious economic consequences of the Russian invasion of Ukraine.  

(36)  As a result, the temporary use of amounts invested in line with this Regulation allows 
addressing  the  serious  economic  difficulties  caused  by  the  Russian  invasion  of 
Ukraine in a spirit of solidarity.  

(37) 

In light of the specific challenges posed by the obligation to reinvest on legal entities 
holding assets and reserves of the Central Bank of Russia other than central securities 
depositories,  the  Council  should  retain  implementing  powers  to  set  out  further 
conditions for such investment. 

(38)  These  specific  measures  are  without  prejudice  to  the  claim  of  the  Central  Bank  of 
Russia,  which  is  the  asset  that  is  subject  to  transfer  restrictions.  This  asset  is  not 
impacted  by  the  measures  provided  under  this  Regulation.  The  cash  balances 
accumulating on the balance sheets of legal entities holding assets and reserves of the 
Central Bank of Russia as a result of the prohibition of transfers to or for the benefit of 
the  Central  Bank  of  Russia  do  not  belong  to  the  Central  Bank  of  Russia  and  do  not 
constitute  sovereign  assets.  The  prohibition  of  transfers  to  or  for  the  benefit  of  the 
Central Bank of Russia is temporary, reversible and under periodic review. 

(39)  Any  award  based  on  an  investor-State  dispute  settlement  proceeding  under  Member 
States’  bilateral  investment  treaties  based  on  an  alleged  confiscation  of  the  claim 
would  therefore  be  considered  as  lacking  legal  basis.  Enforcement  of  such  an  award 
would  be  considered  to  represent  a  tacit  unilateral  waiver  of  the  claim  towards  the 
concerned  legal  entities  holding  assets  and  reserves  of  the  Central  Bank  of  Russia. 
This  would  ensure  that  there  is  no  double  payment  to  the  Central  Bank  of  Russia 
should  the  transaction  prohibition  be  lifted.  Within  the  framework  of  the  debt 
instrument,  such  legal  entities  should  therefore  reduce  their  liabilities  towards  the 
Central  Bank  of  Russia  or  its  affiliated  entities,  for  amounts  equivalent  to  losses  in 
connection with the transfer prohibition of its assets, incurred by a Member State as a 
consequence  of  investor-State  dispute  settlement  proceedings  brought  by  the  Central 
Bank of Russia or its affiliated entities against that Member State. 

(40)  These additional measures create new obligations for legal entities holding assets and 
reserves  of  the  Central  Bank  of  Russia  for  the  purpose  of  alleviating  the  Russian 
aggression. Given the context in which these measures are taken and the fact that these 
measures  pursue  a  public  policy  objective  of  avoiding  the  deterioration  of  the 
economy  in  a  security  crisis  situation,  these  measures  fully  respect  the  fundamental 
rights  and  freedoms  recognised  in  the  Charter  of  Fundamental  Rights,  in  particular 
Article  17  read  in  accordance  with  Article  52  thereof,  as  they  are  justified  and 
proportionate to the objectives pursued. 

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(41)  The measures linked to the prohibition of transfers to or for the benefit of the Central 
Bank of Russia of the assets and reserves of the Central Bank of Russia should remain 
in place until Russia’s actions in Ukraine and in the Member States have objectively 
ceased to pose substantial risks for the stability  of the economy of the Union, taking 
into  account  the  circumstances  where  Russia  ceases  its  war  of  aggression  against 
Ukraine  and  provided  reparations  to  Ukraine  to  the  extent  necessary  to  allow  for 
reconstruction  without  economic  and  financial  consequences  for  the  Union.  Upon 
lifting  the  transaction  prohibition  in  connection  with  the  assets  and  reserves  of  the 
Central  Bank  of  Russia  the  Council  should  lay  down  appropriate,  strictly  necessary 
and temporary winding  down provisions for the protection of the legitimate interests 
of  the  operators  of  the  Union  and  of  the  Member  States,  including  an  appropriate 
timeframe  for  the  fulfilment  of  obligations  following  the  lifting  of  the  measures.  In 
particular, to ensure legal certainty and an orderly winding down, rules on the timeline 
and modalities of the reimbursement of cash balances should be established. 

(42)  The need to ensure the financial stability of the Union and to safeguard the systemic 
importance of central securities depositories for the functioning of securities markets 
should be taken into consideration in the application of this Regulation.  

(43)  Considering  the  scale  of  the  crisis,  the  level  of  its  social,  economic  and  financial 
impact and the need to act as soon as possible, this Regulation should enter into force 
as  a  matter  of  urgency  on  the  day  following  that  of  its  publication  in  the  Official 
Journal of the European Union. 

(44)  Since the objectives of this Regulation cannot be sufficiently achieved by the Member 
States,  but  can  rather  be  better  achieved  at  Union  level,  the  Union  may  adopt 
measures, in accordance with the principle of subsidiarity as set out in Article 5 of the 
Treaty on European Union. In accordance with the principle of proportionality, as set 
out  in  that  Article,  this  Regulation  does  not  go  beyond  what  is  necessary  to  achieve 
that objective.  

HAS ADOPTED THIS REGULATION: 

Article 1 

Subject matter 

This  Regulation  establishes  exceptional  and  temporary  emergency  measures  addressing  the 
serious economic difficulties within the Union caused by Russia’s actions in the context of the 
war  in  Ukraine  and  the  risk  of  further  deterioriation  of  the  economic  situation.  These 
measures  aim  to  maintain  economic  stability  in  the  Union  by  preventing  that  important 
resources  are  made  available  to  Russia  to  continue  its  actions  in  the  context  of  the  war  in 
Ukraine and in the Member States.  

Article 2 
Prohibition of transfer  

Any direct or indirect transfer of assets or reserves to or for the benefit of the Central Bank of 
Russia, or to or for the benefit of any legal person, entity or body acting on behalf of, or at the 
direction of, the Central Bank of Russia, such as the Russian National Wealth Fund, shall be 
prohibited. 

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Article 3 
Reporting 

To  the  extent  not  already  required  by  other  provisions  of  Union  law,  and 
notwithstanding  the  applicable  rules  concerning  reporting,  confidentiality  and 
professional  secrecy,  natural  and  legal  persons,  entities  and  bodies,  including  the 
European Central Bank, national central banks, financial sector entities as defined in 
Article  4  of  Regulation  (EU)  No  575/2013  of  the  European  Parliament  and  of  the 
Council8,  insurance  and  reinsurance  undertakings  as  defined  in  Article  13  of 
Directive  2009/138/EC  of  the  European  Parliament  and  of  the  Council9,  central 
securities depositories as defined in Article 2 of Regulation (EU) No 909/2014 of the 
European  Parliament  and  of  the  Council10  and  central  counterparties  as  defined  in 
Article  2  of  Regulation  (EU)  No  648/2012  of  the  European  Parliament  and  of  the 
Council11 shall provide to the Commission, by [three months after date of entry into 
force of this Regulation], information on the assets and reserves referred to in Article 
2  which  they  hold  or  control  or  are  a  counterparty  to.  Such  information  shall  be 
updated every three months and shall at least include the following: 

(a) 

information identifying the natural or legal persons, entities or bodies owning, 
holding  or  controlling  such  assets  and  reserves,  including  the  name,  address 
and VAT registration or tax identification number;  

(b) 

the amount or market value of such assets and reserves at the date of reporting; 

(c) 

the  types  of  assets  or  reserves  as  well  as  cryptoassets  and  other  relevant 
categories  of  assets,  including  non-pecuniary  assets.  For  each  of  those 
categories,  and  where  available,  relevant  features  such  as  quantity,  location, 
currency, maturity and contractual conditions between the reporting entity and 
the asset owner shall be indicated. 

Where  the  reporting  natural  or  legal  person,  entity  or  body  has  established  an 
extraordinary and unforeseen loss or damage to the assets and reserves referred to in 
Article 2, that information shall be reported immediately to the Commission. 

Member States, as well as the natural and legal persons, entities and bodies covered 
by  the  reporting  obligation  set  out  in  this  Article,  shall  cooperate  with  the 
Commission  in  any  verification  of  the  information  received.  The  Commission  may 
request  any  additional  information  it  requires  to  carry  out  such  verification.  When 
such  a  request  is  addressed  to  a  natural  or  legal  person,  entity  or  body,  the 
Commission  shall  simultaneously  transmit  it  to  the  competent  authority  of  the 
relevant Member State. Any information received by the Commission shall be made 
available to the relevant Member State. 

Regulation  (EU)  No  575/2013  of  the  European  Parliament  and  of  the  Council  of  26  June  2013  on 
prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 
648/2012 (OJ L 176, 27.6.2013, p. 1) 
Directive  2009/138/EC  of  the  European  Parliament  and  of  the  Council  of  25  November  2009  on  the 
taking-up  and  pursuit  of  the  business  of  Insurance  and  Reinsurance  (Solvency  II)  (OJ  L  335, 
17.12.2009, p. 1). 
Regulation  (EU)  No  909/2014  of  the  European  Parliament  and  of  the  Council  of  23  July  2014  on 
improving  securities  settlement  in  the  European  Union  and  on  central  securities  depositories  and 
amending  Directives  98/26/EC  and  2014/65/EU  and  Regulation  (EU)  No  236/2012  (OJ  L  257, 
28.8.2014, p. 1). 
Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC 
derivatives, central counterparties and trade repositories (OJ L 201, 27.7.2012, p. 1). 

1. 

2. 

3. 

8 

9 

10 

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4. 

5. 

1. 

2. 

3.  

4.  

Any  information  provided  to  or  received  by  the  Commission  and  the  competent 
authorities of the Member States in accordance with this Article shall be used by the 
Commission  and  the  competent  authorities  of  the  Member  States  only  for  the 
purposes for which it was provided or received. 

Any  processing  of  personal  data  shall  be  carried  out  in  accordance  with  this 
Regulation and Regulations (EU) 2016/679 and (EU) 2018/1725 and only in so far as 
necessary for the application of this Regulation  and to  ensure effective cooperation 
between  Member  States  as  well  as  with  the  Commission  in  the  application  of  this 
Regulation. 

Article 4 
Balance sheet management transactions  

Cash balances corresponding to the assets and reserves referred to in Article 2 shall 
be managed in line with applicable rules, subject to the provisions in this Article. 

For the purpose of the balance sheet management transactions in the first paragraph, 
financial  sector  entities  as  defined  in  Article  4  of  Regulation  (EU)  No  575/2013, 
insurance  and  reinsurance  undertakings  as  defined  in  Article  13  of  Directive 
2009/138/EC,  central  securities  depositories  as  defined  in  Article  2  of  Regulation 
(EU)  No  909/2014  and  central  counterparties  as  defined  in  Article  2  of  Regulation 
(EU) No 648/2012 shall, upon receipt of the Commission’s call for funds, reinvest an 
amount not exceeding the amount of cash balances accumulating exclusively due to 
the  restrictive  measures  in  a  Union  debt  instrument  in  accordance  with  the 
[Regulation establishing the Reparations Loan]. That debt instrument shall be treated 
as equivalent to cash under applicable accounting rules.  

The  reinvestment  by  central  securities  depositories  referred  to  in  the  preceding 
subparagraph shall be notwithstanding Article 46 of Regulation (EU) 909/2014, shall 
be undertaken on a daily basis. The Council shall adopt implementing regulations to 
define  any  further  conditions  for  the  obligation  to  reinvest  of  the  financial  sector 
entities, insurance and reinsurance undertakings and central counterparties 

Within the framework of the debt instrument referred to in paragraph 2, in the event 
amounts are enforced against a Member State having reported entities holding assets 
of  the  Central  Bank  of  Russia  within  their  jurisdiction  following  an  investor-State 
arbitral  award  for  which  the  claim  was  brought  by  the  legal  persons,  bodies  and 
entities  referred  to  in  Article  2  against  that   Member State  in  connection  with 
measures  imposed  under  Article  2  and  the  first  subparagraph  of  this  paragraph, 
amounts up to those amounts enforced shall  be deducted. 

Those amounts shall be notified by the Commission to the legal entities identified in 
paragraph 2 following the application of Article 24 of the [Regulation  establishing 
the Reparations Loan] and shall be deducted by: 

(a) 

(b) 

those  legal  entities  from  their  liabilities  towards  the  legal  persons,  entities  or 
body referred to in Article 2;  

the Union from its liabilities towards those legal entities under the terms of the 
debt instrument referred to in the second subparagraph.  

EN 

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  EN 

 
1. 

2. 

3. 

4. 

5. 

6. 

7.  

Article 5 
Safeguards 

No claims in connection with any contract or transaction the performance of which 
has been affected, directly or indirectly, in whole or in part, by the measures imposed 
under this Regulation, including claims for indemnity or any other claim of this type, 
such as a claim for compensation or a claim under a guarantee, notably a claim for 
extension  or  payment  of  a  bond,  guarantee  or  indemnity,  particularly  a  financial 
guarantee  or  financial  indemnity,  of  whatever  form,  shall  be  satisfied,  if  they  are 
made by the Russian Federation, by the legal persons, entities and bodies referred to 
in  Article  2  or  by  persons  acting  on  their  behalf  or  at  their  direction.  No  judicial, 
arbitral  or  administrative  decision  obtained  by  the  Russian  Federation,  by  the  legal 
persons,  bodies  and  entities  referred  to  in  Article  2  or  by  persons  acting  on  their 
behalf  or  at  their  direction  in  connection  with  the  measures  in  Article  2  shall  be 
recognised, given effect or enforced in the Union for as long as this Regulation is in 
force. 

In any proceedings for the enforcement of a claim, the onus of proving that satisfying 
the claim is not prohibited by the first subparagraph shall be on the person seeking 
the enforcement of that claim. 

This  paragraph  is  without  prejudice  to  the  right  of  the  legal  persons,  entities  and 
bodies  referred  to  in  paragraph  1  to  judicial  review  of  the  legality  of  the  non-
performance of contractual obligations in accordance with this Regulation. 

Actions by a financial instituions identified in Article 4(2) carried out in good faith 
pursuant to Article 2 and 4 on the basis that such actions are in accordance with this 
Regulation  shall  not  give  rise  to  liability  of  any  kind  on  the  part  of  that  financial 
insitution, or of its directors or employees, unless it is proved that the action was a 
result of negligence. 

Financial  institutions  identified  in  Article  4(2)  established  in  the  Union  shall  be 
entitled to recover, in judicial proceedings before the competent courts of a Member 
State,  any  direct  or  indirect  damages,  including  legal  costs,  caused  to  those  legal 
entities or to a legal person, entity or body that they own or control, by any persons, 
entities  or  bodies  that,  outside  the  Union,  benefited  from,  seeks  to  enforce  or 
enforces, a Decree of the President of the Russian Federation, Russian legislation or 
implementing  act  which  entails  expropriation,  seizure,  confiscation,  transfer  or 
measures having similar effects in respect of assets of those legal entities. 

Such  damages  may  be  recovered  from  the  persons,  entities  or  bodies  that  benefit 
from, seek to enforce or enforce outside the Union such Decree of  the President of 
the  Russian  Federation,  Russian  legislation  or  implementing  act,  or  from  any  legal 
person, entity or body that they own or control, or is acting on their behalf or at their 
direction. 

Central securities depositories established in the Union shall be entitled, in the event 
of  an unlawful expropriation, seizure, confiscation, transfer or measures in relation 
to  the  assets  and  reserves  of  the  Central  Bank  of  Russia    or  in  relation  to  funds 
frozen under Regulation 269/2014 having similar effects in respect of funds held by 
them  on  account  of  account  holders,  to  pass  on  such  effects,  where  necessary  with 
discharge, to the funds credited to the accounts in the books of those of the account 
holders  in  relation  to  whom  the  central  securities  depository  holds  the  funds  in 

EN 

17 

  EN 

question,  provided  the  central  securities  depositories  have  exhausted  all  available 
remedies, including those provided in Article 11bc, to recover such funds. In case of 
subsequent  availability  of  those  funds,  the  central  securities  depository  shall  credit 
those  funds  or  financial  instruments  pro  rata  to  their  initial  holding  to  the  affected 
account holders.  

Article 6 

Review  

By  31  December  2026,  and  every  12  months  afterwards,  the  Commission  shall  carry  out  a 
review  of  this  Regulation  and  present  a  report  on  the  main  findings  of  that  review  to  the 
Council.  

Article 7 

Final provision 

This  Regulation  shall  enter  into  force  on  the  day  following  that  of  its  publication  in  the 
Official Journal of the European Union. 

It  shall  apply  until  the  Council  decides,  on  the  basis  of  a  proposal  of  the  Commission,  that 
Russia’s  actions  in  Ukraine  and  in  the  Member  States  have  objectively  ceased  to  pose 
substantial  risks  for  the  stability  of  the  economy  of  the  Union,  taking  into  account  the 
circumstances  where  Russia  would  have  ceased  its  war  of  aggression  against  Ukraine  and 
have  provided  reparations  to  Ukraine  to  the  extent  necessary  to  allow  for  reconstruction 
without economic and financial consequences for the Union. 

This Regulation shall be binding in its entirety and directly applicable in the Member States in 
accordance with the Treaties. 

Done at Brussels, 

For the Council 
The President 

EN 

18 

  EN