Council Regulation (EU) 2025/398

Contents

THE COUNCIL OF THE EUROPEAN UNION,Having regard to the Treaty on the Functioning of the European Union, and in particular Article 215 thereof,Having regard to Council Decision (CFSP) 2025/396 of 24 February 2025 amending Decision (CFSP) 2022/266 concerning restrictive measures in response to the illegal recognition, occupation or annexation by the Russian Federation of certain non-government controlled areas of Ukraine^note,Having regard to the joint proposal from the High Representative of the Union for Foreign Affairs and Security Policy and the European Commission,Whereas:

(1)On 23 February 2022, the Council adopted Regulation (EU) 2022/263^note.

(2)Regulation (EU) 2022/263 gives effect to certain measures provided for in Council Decision (CFSP) 2022/266^note.

(3)On 24 February 2025 the Council adopted Decision (CFSP) 2025/396, which amends Decision (CFSP) 2022/266.

(4)Decision (CFSP) 2025/396 prohibits, subject to certain exceptions, the supply to the non-government controlled areas of Ukraine in the oblasts of Donetsk, Kherson, Luhansk and Zaporizhzhia (the ‘non-government controlled areas’) of banknotes denominated in any official currency of a Member State.

(5)Decision (CFSP) 2025/396 introduces restrictions on the export to the non-government controlled areas of certain goods and technology that are also restricted by Council Regulation (EU) No 833/2014^note.

(6)Decision (CFSP) 2025/396 prohibits the provision to the non-government controlled areas of accounting, auditing, bookkeeping, tax consulting, business and management consulting, public relations, construction, architectural, engineering, legal advisory, IT consultancy, market research and public opinion polling, technical testing and analysis and advertising services. It also prohibits the provision to the non-government controlled areas of certain software for the management of enterprises and software for industrial design and manufacture, and of related intellectual property rights or trade secrets.

(7)For the purposes of ensuring effective implementation, preventing circumvention and strengthening enforcement of the restrictive measures set out in Regulation (EU) 2022/263, as well as protecting Union operators, it is appropriate to introduce a number of horizontal provisions and to amend the wording of certain existing provisions.

(8)In order to ensure alignment with the interpretation of the Court of Justice of the European Union in Case C-72/11^note, Decision (CFSP) 2025/396 amends the provision prohibiting circumvention to clarify that the requirements of knowledge and intent are met not only where a person deliberately seeks the object or effect of circumventing restrictive measures but also where a person participating in an activity having the object or effect of circumventing restrictive measures is aware that such participation may have that object or that effect, and accepts that possibility.

(9)Regulation (EU) 2022/263 applies only within the jurisdictional limits defined in Article 15 thereof. At the same time, if Union operators are able to and effectively assert a decisive influence over the conduct of a legal person, entity or body established outside the Union, they may incur responsibility for actions of that legal person, entity or body that undermine the restrictive measures and should use their influence to prevent those actions from occurring.

(10)Such influence can derive from ownership or control over the legal person, entity or body. Ownership means being in possession of 50 % or more of the proprietary rights of the legal person, entity or body, or having a majority interest therein. Elements that indicate control include: the right or the power to appoint or remove a majority of the members of the administrative, management or supervisory body; the right to use all or part of the assets of the legal person, entity or body; managing the business of the legal person, entity or body on a unified basis, while publishing consolidated accounts; or the right to exercise a dominant influence over the legal person, entity or body.

(11)It is appropriate to require that Union operators undertake their best efforts to ensure that legal persons, entities and bodies established outside the Union that they own or control do not participate in activities that undermine the restrictive measures provided for in Regulation (EU) 2022/263. Such activities are those resulting in an effect that those restrictive measures seek to prevent, for example, that a recipient in the non-government controlled areas obtains goods, technology, financing or services of a type that is subject to prohibitions under Regulation (EU) 2022/263.

(12)Best efforts should be understood as comprising all actions that are suitable and necessary to achieve the result of preventing the undermining of the restrictive measures in Regulation (EU) 2022/263. Those actions can include, for example, the implementation of appropriate policies, controls and procedures to mitigate and manage risk effectively, considering factors such as the third country of establishment, the business sector and the type of activity of the legal person, entity or body that is owned or controlled by the Union operator. At the same time, best efforts should be understood as comprising only actions that are feasible for the Union operator in view of its nature, its size and the relevant factual circumstances, in particular the degree of effective control over the legal person, entity or body established outside the Union. Such circumstances include the situation where the Union operator, due to reasons that it did not cause itself, such as the legislation of a third country, is not able to exercise control over a legal person, entity or body that it owns.

(13)With a view to increasing awareness of enforcement action, it is appropriate that Member States report about penalties imposed for violations of the restrictive measures.

(14)Where a natural or legal person voluntarily, completely and in due time discloses a violation of the restrictive measures, it should be possible for national competent authorities to take that self-disclosure into account when applying penalties, as appropriate, in accordance with national administrative law or with other relevant national law or rules. The measures taken by Member States pursuant to Directive (EU) 2024/1226 of the European Parliament and of the Council^note, and the requirements contained therein regarding mitigating circumstances apply.

(15)It is appropriate to clarify that the protection against liability that is granted to Union operators if they did not know, and had no reasonable cause to suspect, that their actions would infringe Union restrictive measures cannot be invoked where Union operators have failed to carry out appropriate due diligence. It is appropriate for publicly or readily available information to be duly taken into account when carrying out such due diligence. Therefore, for example, a Union operator cannot successfully invoke such protection when it is accused of breaching the relevant restrictive measures because it has failed to carry out simple checks or inspections.

(16)These measures fall within the scope of the Treaty on the Functioning of the European Union and therefore, in particular with a view to ensuring their uniform application in all Member States, regulatory action at the level of the Union is necessary.

(17)Regulation (EU) 2022/263 should therefore be amended accordingly,

HAS ADOPTED THIS REGULATION:

Article 1 #

Regulation (EU) 2022/263 is amended as follows:

(1)Article 2(2) is replaced by the following:‘2.The prohibitions in paragraph 1 shall not apply in respect of goods originating in the specified territories which have been made available to the Ukrainian authorities for examination, for which compliance with the conditions conferring entitlement to preferential origin has been verified and for which a certificate of origin has been issued in accordance with the Association Agreement between the European Union and its Member States, of the one part, and Ukraine, of the other part.’;

(2)the following Article is inserted:‘Article 3a1.It shall be prohibited to sell, supply, transfer or export banknotes denominated in any official currency of a Member State to the specified territories or to any natural or legal person, entity or body in the specified territories, or for use in the specified territories.2.The prohibition in paragraph 1 shall not apply to the sale, supply, transfer or export of banknotes denominated in any official currency of a Member State provided that such sale, supply, transfer or export is necessary for:

(a)the personal use of natural persons travelling to the specified territories or members of their immediate families travelling with them;

(b)the official purposes of international organisations enjoying immunities in accordance with international law located in the specified territories; or

(c)civil society and media activities that directly promote democracy, human rights or the rule of law in the specified territories which receive public funding from the Union, Member States or countries listed in Annex IV.’

;

(3)Article 4 is amended as follows:

(a)paragraph 1 is replaced by the following:‘1.It shall be prohibited to sell, supply, transfer, or export, directly or indirectly, goods and technology, whether or not originating in the Union, as listed in Annex II:

(a)to any natural or legal person, entity or body in the specified territories, or

(b)for use in the specified territories.

(i)transport;

(ii)telecommunications;

(iii)energy;

(iv)the prospection, exploration and production of oil, gas and mineral resources.’

1a.Annex II shall include certain goods and technologies suited for use in the following key sectors:;

(b)paragraph 3 is deleted;

(4)Article 5 is replaced by the following:‘Article 51.It shall be prohibited to provide, directly or indirectly, accounting, auditing, including statutory audit, bookkeeping or tax consulting services, or business and management consulting or public relations services to legal persons, entities or bodies in the specified territories.2.It shall be prohibited to provide, directly or indirectly, construction, architectural and engineering services, legal advisory services and IT consultancy services to legal persons, entities or bodies in the specified territories.2a.It shall be prohibited to provide, directly or indirectly, market research and public opinion polling services, technical testing and analysis services and advertising services to legal persons, entities or bodies in the specified territories.2b.It shall be prohibited to sell, supply, transfer, export, or provide, directly or indirectly, software for the management of enterprises and software for industrial design and manufacture as listed in Annex III to legal persons, entities or bodies in the specified territories.3.It shall be prohibited to:

(a)provide, directly or indirectly, technical assistance or brokering services directly relating to infrastructure in the specified territories in the sectors referred to in Article 4(1a), independently of the origin of the goods and technology;

(a)humanitarian purposes, such as delivering or facilitating the delivery of assistance, including medical supplies, food, or the transfer of humanitarian workers and related assistance, or for evacuations;

(b)provide technical assistance, brokering services or other services related to the goods and services referred to in paragraphs 1, 2, 2a and 2b for their provision, directly or indirectly, to legal persons, entities or bodies in the specified territories;

(b)civil society activities that directly promote democracy, human rights or the rule of law in the specified territories;

(c)provide financing or financial assistance related to the goods and services referred to in paragraphs 1, 2, 2a and 2b for their provision, or for the provision of related technical assistance, brokering services or other services, directly or indirectly, to legal persons, entities or bodies in the specified territories;

(c)the functioning of international organisations enjoying immunities in accordance with international law located in the specified territories;

(d)sell, license or transfer in any other way intellectual property rights or trade secrets as well as grant rights to access or re-use any material or information protected by means of intellectual property rights or constituting trade secrets related to the software referred to in paragraph 2b and to the provision, manufacture, maintenance and use of that software, directly or indirectly to any natural or legal person, entity or body in the specified territories or for use in the specified territories.

(d)ensuring critical energy supply within the Union and the purchase, import or transport into the Union of titanium, aluminium, copper, nickel, palladium and iron ore;

(e)ensuring the continuous operation of infrastructures, hardware and software which are critical for human health and safety, or the safety of the environment;

(f)the establishment, operation, maintenance, fuel supply and retreatment and safety of civil nuclear capabilities, and the continuation of design, construction and commissioning required for the completion of civil nuclear facilities, the supply of precursor material for the production of medical radioisotopes and similar medical applications, or critical technology for environmental radiation monitoring, as well as for civil nuclear cooperation, in particular in the field of research and development;

(g)the provision of electronic communication services by Union telecommunication operators necessary for the operation, maintenance and security, including cybersecurity, of electronic communication services, in Ukraine, in the Union, between Ukraine and the Union, and for data centre services in the Union.

4.Paragraphs 1 and 2 shall not apply to the provision of services that are strictly necessary for the exercise of the right of defence in judicial proceedings and the right to an effective legal remedy.5.Paragraphs 1 and 2 shall not apply to the provision of services which are strictly necessary to ensure access to judicial, administrative or arbitral proceedings in a Member State, as well as for the recognition or enforcement of a judgment or an arbitration award rendered in a Member State, provided that such provision of services is consistent with the objectives of this Regulation and Regulation (EU) No 269/2014.6.Paragraphs 2, 2a and 2b shall not apply to the sale, supply, transfer, export, or provision of services necessary for public health emergencies, the urgent prevention or mitigation of an event likely to have a serious and significant impact on human health and safety or the environment, or as a response to natural disasters.7.By way of derogation from paragraph 2b, the competent authorities may authorise the provision of services referred to therein, under such conditions as they deem appropriate, after having determined that those services are necessary for the contribution of Ukrainian nationals to international open-source projects.8.By way of derogation from paragraphs 1, 2, 2a, 2b and 3, the competent authorities may authorise the sale, supply, transfer, export, or provision of the services referred to therein, under such conditions as they deem appropriate, after having determined that this is necessary for:9.The Member State concerned shall inform the other Member States and the Commission of any authorisation granted under paragraphs 7 and 8 within two weeks of the authorisation.’;

(5)Article 5a is amended as follows:

(a)the introductory wording of paragraph 1 is replaced by the following:‘1.The prohibitions set out in Article 5 shall not apply to the provision of technical assistance or services by:’;

(b)paragraph 2 is replaced by the following:‘2.By way of derogation from Article 5, in cases not covered by paragraph 1 of this Article, the competent authorities may grant specific or general authorisations, under such general and specific terms and conditions as they deem appropriate, for the provision of technical assistance or services, provided that such assistance and services are necessary for exclusively humanitarian purposes in the specified territories.’;

(6)Article 6 is replaced by the following:‘Article 6It shall be prohibited to provide services directly related to tourism activities in the specified territories.’;

(7)in Article 7(1), point (a) is replaced by the following:

(a)necessary for official purposes of international organisations enjoying immunities in accordance with international law located in the specified territories;’

;

(8)Article 8 is replaced by the following:‘Article 8It shall be prohibited to participate, knowingly and intentionally, in activities the object or effect of which is to circumvent prohibitions in this Regulation, including by participating in such activities without deliberately seeking that object or effect but being aware that the participation may have that object or effect and accepting that possibility.’;

(9)Article 10(1) is replaced by the following:‘1.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, particularly 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:

(a)designated natural or legal persons, entities or bodies listed in Annex I to Regulation (EU) No 269/2014;

(b)any natural person who, or legal person, entity or body which, has been found by an arbitral, judicial or administrative decision to have infringed the prohibitions set out in this Regulation;

(c)any natural or legal person, entity or body, if the claim relates to goods the import of which is prohibited under Article 2(1);

(d)any person, entity or body in the specified territories;

(e)any Russian person, entity or body;

(f)any person, entity or body acting through or on behalf of one of the persons, entities or bodies referred to in points (a) to (e) of this paragraph.’

;

(10)the following Articles are inserted:‘Article 10aAny person referred to in Article 15, point (c) or (d), shall be entitled to recover, in judicial proceedings before the competent courts of a Member State, any direct or indirect damages, including legal costs, incurred by that person or by a legal person, entity or body that the person referred to in Article 15, point (d) owns or controls, as a consequence of claims lodged with courts in third countries by persons, entities and bodies referred to in Article 10(1), points (a) to (f), 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, provided that the person concerned does not have effective access to the remedies under the relevant jurisdiction. Such damages may be recovered from the persons, entities or bodies referred to in Article 10(1), points (a) to (f), that lodged the claims with the courts in the third country, or from persons, entities or bodies that own or control those entities or bodies.Article 10bWhere no court of a Member State has jurisdiction pursuant to other provisions of Union law or of the law of a Member State, a court of a Member State may, on an exceptional basis, hear a claim for damages brought pursuant to Article 10a, provided that the case has a sufficient connection with the Member State of the court seised.’;

(11)Article 11 is replaced by the following:‘Article 111.The Member States and the Commission shall inform each other of the measures taken under this Regulation and share any other relevant information at their disposal in connection with this Regulation, in particular information in respect of:

(a)authorisations granted or denied under this Regulation;

(b)violation and enforcement problems, penalties applied for infringements of the provisions of this Regulation and judgments handed down by national courts.

2.The Member States shall immediately inform each other and the Commission of any other relevant information at their disposal which might affect the effective implementation of this Regulation.3.Any information provided or received in accordance with this Article shall be used for the purposes for which it was provided or received, including ensuring the effectiveness of the measures set out in this Regulation.4.Any document held by the Council, the Commission or the High Representative of the Union for Foreign Affairs and Security Policy (the “High Representative”) for the purpose of ensuring the enforcement of the measures set out in this Regulation, or of preventing the violation or circumvention thereof, shall be subject to professional secrecy and shall enjoy the protection afforded by the rules applicable to the Union institutions. That protection shall also apply to the joint proposals from the High Representative and the Commission for the amendment of this Regulation and to any preparatory documents related to them.It shall be presumed that the disclosure of any documents or proposals referred to in the first subparagraph would harm the security of the Union or that of one or more of its Member States or the conduct of their international relations.’;

(12)the following Article is inserted:‘Article 11a1.The Commission shall process personal data to the extent necessary for the performance of its tasks as attributed by this Regulation related to its contribution to the correct implementation, enforcement and prevention of the circumvention of the measures imposed under this Regulation.1a.The Commission shall process personal data, including special categories of personal data and personal data relating to criminal convictions and offences as defined in Article 10(2) and Article 11 of Regulation (EU) 2018/1725 of the European Parliament and of the Council^note, for the purposes of the identification of the natural or legal persons, entities or bodies that are subject to the restrictive measures provided for in this Regulation, in order to assist the persons referred to in Article 10 of this Regulation in their compliance with this Regulation.2.For the purposes of this Regulation, the Commission is designated as “controller” within the meaning of Article 3, point (8) of Regulation (EU) 2018/1725 in relation to the processing activities necessary to accomplish the tasks referred to in paragraph 1 of this Article.3.The competent authorities of the Member States, including enforcement authorities, customs authorities within the meaning of Regulation (EU) No 952/2013 of the European Parliament and of the Council^note, competent authorities within the meaning of Regulation (EU) No 575/2013 of the European Parliament and of the Council^note, Directive 2014/65/EU of the European Parliament and of the Council^note, Directive (EU) 2015/849 of the European Parliament and of the Council^note, as well as Financial Intelligence Units as referred to in Directive (EU) 2015/849 and administrators of official registers wherein natural persons, legal persons, entities and bodies as well as immovable or movable property are registered, shall process and exchange without delay information, including personal data, with other competent authorities of their Member State, with competent authorities of other Member States and with the Commission, if such processing and exchange is necessary to carry out the tasks of the processing authority or the receiving authority under this Regulation, in particular when they detect instances of breach, circumvention or attempts at breach or circumvention of the prohibitions set out in this Regulation. This provision is without prejudice to rules regarding the confidentiality of information held by judicial authorities.4.Any processing of personal data shall be carried out in accordance with this Regulation, Regulation (EU) 2016/679 of the European Parliament and of the Council^note and Regulation (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.

(13)Article 13(1) is replaced by the following:‘1.Member States shall lay down the rules on penalties, including as appropriate criminal penalties, applicable to infringements of the provisions of this Regulation and shall take all measures necessary to ensure that they are implemented. The penalties provided for must be effective, proportionate and dissuasive, and Member States may take the voluntary self-disclosure of infringements of the provisions of this Regulation into account as a mitigating factor, in accordance with the respective national law. Member States shall also provide for appropriate measures of confiscation of the proceeds of such infringements.’;

(14)the following Article is inserted:‘Article 13aNatural and legal persons, entities and bodies shall undertake their best efforts to ensure that any legal person, entity or body established outside the Union that they own or control does not participate in activities that undermine the restrictive measures provided for in this Regulation.’;

(15)Annex II is amended in accordance with Annex I to this Regulation;

(16)Annex III is added in accordance with Annex II to this Regulation;

(17)Annex IV is added in accordance with Annex III to this Regulation.

UNITED KINGDOM

SOUTH KOREA

AUSTRALIA

CANADA

NEW ZEALAND

NORWAY

SWITZERLAND

LIECHTENSTEIN

ICELAND’.

Council Regulation (EU) 2025/398

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Annex I

Annex II

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Annex IV · List of countries referred to in Article 3a, paragraph 2, point (c)

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Article 2#

Annex I

Annex II

III

Annex IV · List of countries referred to in Article 3a, paragraph 2, point (c)

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