Council Regulation (EU) 2024/2642

Concerning Restrictive Measures in View of Russia’s Destabilizing Activities

Article 1: Definitions

Defines key terms used throughout the regulation, including:

Claim: Any claim related to contracts or transactions.
Contract or Transaction: Any transaction of any form, including bonds, guarantees, and credits.
Competent Authorities: Identified authorities of Member States as listed in Annex II.
Economic Resources: Assets that can be used to obtain funds, goods, or services.
Freezing of Economic Resources: Preventing the use of economic resources.
Freezing of Funds: Preventing any change or use of funds.
Funds: Financial assets, including cash, deposits, securities, and financial commitments.
Territory of the Union: Includes Member States’ territories and airspace.

Article 2: Freezing of Funds and Economic Resources

All funds and economic resources of listed persons/entities in Annex I are to be frozen.
Prohibition on making funds available to listed persons/entities.
Criteria for listing include involvement in destabilizing activities such as undermining democracy, supporting violent actions, or exploiting conflicts.

Article 3: Derogations for Release of Funds

Allows authorization to release certain frozen funds for:
- Basic needs (e.g., food, medicine)
- Legal services
- Maintenance fees for frozen funds
- Extraordinary expenses with prior notification
- Official purposes of diplomatic missions or international organizations
- Electronic communication services by Union operators
Member States must inform others of any authorizations within two weeks.

Article 4: Humanitarian Exemptions

Exempts humanitarian assistance provided by recognized organizations from freezing provisions.
Exemption does not apply to certain entities marked with an asterisk in Annex I.
Competent authorities may authorize necessary releases for humanitarian needs.

Article 5-7: Additional Derogations and Provisions

Article 5: Authorizes the release of funds based on prior arbitral or judicial decisions not benefiting listed persons/entities.
Article 6: Allows payments due under existing contracts before listing in Annex I.
Article 7: Permits crediting of frozen accounts by financial institutions under specific conditions and mandates immediate reporting of such transactions.

Article 8: Information Sharing and Cooperation

Requires immediate provision of information to competent authorities for compliance.
Mandates cooperation with authorities for verification purposes.
Limits use of information to the purposes intended.

Article 9: Prohibition of Circumvention

Prohibits participation in activities intended to circumvent the measures.
Listed persons/entities must report their funds or economic resources within six weeks of listing.
Failure to comply is considered an attempt to circumvent the measures.

Article 10: Liability Protections

Protects individuals or entities acting in good faith from liability unless negligence is proven.
No liability if actions infringe the regulation without reasonable suspicion.

Article 11: Claims Prohibition

Disallows claims related to contracts or transactions affected by the measures if made by listed persons/entities.
Shifts the burden of proof to those seeking enforcement of such claims.

Article 12: Information Exchange

Requires the Commission and Member States to share information on measures and any related enforcement issues.
Mandates immediate sharing of relevant information that impacts the regulation’s implementation.

Article 13: Listing Procedure

Details the process for adding persons/entities to Annex I, including communication of grounds and opportunity for observations.
Requires regular review of Annex I at least annually.
Empowers the Commission to amend Annex II based on Member States’ information.

Article 14: Contents of Annex I

Includes grounds for listing and identification information for listed persons/entities.
For individuals, may include names, aliases, date/place of birth, nationality, identification numbers, gender, address, and profession.
For legal entities, may include names, registration details, and place of business.

Article 15: Penalties

Member States must establish effective, proportionate, and dissuasive penalties for infringements.
Requires measures for confiscation of proceeds from such infringements.
Member States must notify the Commission of their penalty rules and any amendments.

Article 16: Data Processing

Allows the Council, Commission, and High Representative to process personal data necessary for the regulation.
Limits data processing to what is necessary for preparing Annex I.
Designates these bodies as ‘controller’ to ensure data protection rights.

Article 17: Designation of Competent Authorities

Member States must designate and identify competent authorities in Annex II.
Requires notification of any changes to the Commission.

Article 18: Use of Information

Restricts the Commission to using provided or received information solely for the purposes intended under the regulation.

Article 19: Scope of Application

Applies within Union territories, on board Member States’ aircraft or vessels, to nationals of Member States regardless of location, and to legal entities incorporated under Member State law engaged in business within the Union.

Article 20: Entry into Force

The regulation becomes effective the day after its publication in the Official Journal of the European Union and is directly applicable in all Member States.