Council Regulation (EU) 2024/1745 of 24 June 2024 amending Regulation (EU) No 833/2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine

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) 2024/1744 of 24 June 2024 amending Decision 2014/512/CFSP concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine (1),

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 31 July 2014, the Council adopted Regulation (EU) No 833/2014 (2).

(2) Regulation (EU) No 833/2014 gives effect to certain measures provided for in Council Decision 2014/512/CFSP (3).

(3) On 24 June 2024 the Council adopted Decision (CFSP) 2024/1744, which amends Decision 2014/512/CFSP.

(4) Decision (CFSP) 2024/1744 amends the prohibition to land in, take off from or overfly the territory of the Union so that it also applies to any aircraft which is used for a non-scheduled flight and with regard to which a Russian natural or legal person, entity or body is in a position to effectively determine the place or time of its take-off or landing, such as for example to fulfil the request of Russian natural persons to be transported to specific holiday destinations or the request of Russian legal persons to transport their employees to business meetings in the Union or their clients to tourist destinations. That amendment is aimed at avoiding circumvention practices of the prohibition to land in, take off or overfly the territory of the Union and at further pursuing the objective of indirectly exerting maximum pressure on the Russian Government in order to end its actions and policies destabilising Ukraine and the military aggression against it. The prohibition does not apply to an aircraft which a Russian person merely pilots without being in a position to effectively determine the place or time for its take-off or landing, such as in the case of pilots employed by non-Russian air carriers. Decision (CFSP) 2024/1744 also amends the same prohibition to introduce an exemption for certain aircraft when used for private, non-corporate flights carried out within Union territory and airspace for recreational or training purposes.

(5) With the aim of having a uniform set of rules across the Union and of combating circumvention of the flight ban, Decision (CFSP) 2024/1744 also introduces an obligation for operators to provide, for non-scheduled flights, upon request of the competent authorities of the Member State of departure, destination or overflying, information needed for the purpose of verifying compliance with the flight ban, including information about ownership of the aircraft and, where reasonable grounds to suspect circumvention of the flight ban exist, about passengers. Such information should be provided within a deadline set by the competent authorities of the Member State or Member States concerned.

(6) That obligation fully respects fundamental rights, in particular the right of respect for private life and the right to the protection of personal data, in accordance with the Charter of Fundamental Rights of the European Union (the ‘Charter’). In particular, any processing of personal data should remain limited to what is necessary for and proportionate to achieving the objectives of Regulation (EU) No 833/2014. For the purposes of the application of the relevant provisions of Regulation (EU) No 833/2014, the notion of non-scheduled flights should be interpreted in accordance with the definition of ‘scheduled air service’ set out in Regulation (EC) No 1008/2008 of the European Parliament and of the Council (4).

(7) In order to minimise the risk of circumvention, Decision (CFSP) 2024/1744 amends the prohibition on the transport of goods by road within the territory of the Union, including in transit. Union operators which are owned for 25 % or more by a Russian natural or legal person should be prohibited from becoming a road transport undertaking or from transporting goods by road in the Union, including in transit. The prohibition does not apply to road transport undertakings owned by dual nationals or Russian nationals having a temporary or permanent residence permit in a Member State. Road transport undertakings should disclose their ownership structure to the national competent authorities, upon their request.

(8) Given that there are considerable stocks of diamonds held outside Russia which no longer provide revenue to Russia, but which may need to be exported for processing or imported after processing, Decision (CFSP) 2024/1744 clarifies that rough diamonds imported from Russia prior to 1 January 2024 and polished diamonds imported from Russia or manufactured before 1 March 2024 or 1 September 2024, depending upon the weight of the diamond, are not covered by the diamond ban. Decision (CFSP) 2024/1744 also amends the ban on Russian diamonds in order to enable the temporary import or export of jewellery for repairs, auctions and trade fairs. It also amends the scope of application and the date of entry into force of the requirement to provide traceability-based evidence.

(9) The market for jewellery incorporating diamonds is global and closely interconnected. Restrictive measures concerning such jewellery are more effective and less likely to be circumvented when they are imposed in alignment with the Union’s main partners, such as the G7. Consequently, Decision (CFSP) 2024/1744 provides that the indirect import ban on Russian diamonds processed in third countries other than Russia, is temporarily not to apply to jewellery incorporating such diamonds until the Council decides otherwise in view of action taken within the G7 to pursue that measure.

(10) Russia derives significant revenues from the sale and transport of liquified natural gas (LNG). Decision (CFSP) 2024/1744 prohibits reloading services in the territory of the Union for the purposes of transshipment operations where such services are used to transship Russian LNG, except in the case of such transshipments to Member States. That prohibition covers both ship-to-ship transfers and ship-to-shore transfers and re-loading operations. Ancillary services related to such transshipments are also banned. The prohibition does not affect imports into the Union or the security of supply of Member States. The Commission should monitor and report to the Council LNG developments linked to the prohibition and propose mitigating measures in the event of important developments related to it.

(11) Decision (CFSP) 2024/1744 prohibits new investment and the provisions of goods, technology and services for the completion of LNG projects such as Arctic LNG 2 and Murmansk LNG. That should not affect the purchase and import of LNG from Russian terminals and financial services provided to such LNG projects. Such a measure limits the expansion of Russia’s LNG capacity and thereby limits Russia’s revenues.

(12) Decision (CFSP) 2024/1744 introduces import restrictions on Russian LNG through Union LNG terminals that are not connected to the interconnected natural gas system. This is a targeted measure only affecting specific facilities in certain Member States. It does not impede in any way imports of Russian LNG through other facilities in the Union and does not have any adverse effects on the Union’s gas market and on its security of supply, including on available volumes and prices. Those restrictions should not affect the supply of Russian LNG from the mainland of a Member State to its outermost regions.

(13) Decision (CFSP) 2024/1744 introduces a sectoral ban prohibiting access to Member States’ ports and locks as well as a broad range of services related to maritime transport for vessels which contribute to Russia’s ability to wage war against Ukraine. That measure should constrain the activity of vessels involved in the transport of goods generating revenue for Russia’s warfare or vessels operated to contribute or support actions or policies supporting Russia’s actions against Ukraine. Vessels subject to the restrictive measures are listed in Annex XVI to Decision (CFSP) 2024/1744. Union restrictive measures, being an essential tool of the Union’s common foreign and security policy against Russia’s war of aggression against Ukraine, are not directed at Union flagged vessels. Such vessels operate under, and must comply with their obligations in accordance with, Union and national law. The competent authorities of the Member States should implement and enforce Union restrictive measures in their respective jurisdictions in relation to Union flagged vessels. Furthermore, Decision (CFSP) 2024/1744 clarifies the scope of the port access ban for Russian-flagged vessels and adds a derogation.

(14) Decision (CFSP) 2024/1744 introduces a prohibition on purchasing, importing, transferring or exporting Ukrainian cultural property goods and other goods of archaeological, historical, cultural, rare scientific or religious importance, where there are reasonable grounds to suspect that the goods have been unlawfully removed from Ukraine. Furthermore, it introduces a prohibition on related services.

(15) In 2020, Russia introduced new provisions in its Arbitration Procedure Code with the purpose of ensuring, unless otherwise established by an international treaty of Russia or by agreement of the parties, the exclusive competence of courts in Russia in disputes with the participation of persons in respect of which restrictive measures are applied or in disputes of one Russian or foreign person with another Russian or foreign person, if the basis for such disputes is restrictive measures. Such legislation, which has been extensively applied by Russian courts, has the clear objective or effect of forcing the satisfaction of claims against assets of Union companies in a foreign jurisdiction, claims which they would otherwise be prohibited from satisfying pursuant to Regulation (EU) No 833/2014 or Council Regulation (EU) No 269/2014 (5). Consequently, with a view to increasing the costs on the Russian Federation of its illegal actions in Ukraine, and determining it to end such actions, Decision (CFSP) 2024/1744 enables the possibility to subject companies which make use of those provisions of Russian law to a transaction ban.

(16) The Central Bank of Russia has developed the ‘System for Transfer of Financial Messages’ (SPFS), a specialised financial messaging service to exchange financial data, which is aimed at neutralising the impact of the measures established in Regulation (EU) No 833/2014, in particular concerning the banking and financial sector. With a view to containing the development of the SPFS, reducing Russia’s capacity to wage war and preventing the frustration of the measures established in Regulation (EU) No 833/2014, Decision (CSFP) 2024/1744 prohibits Union entities which operate outside of Russia from directly connecting to the SPFS or equivalent specialised financial messaging services set up by the Central Bank of Russia, and adds a transaction ban on Union operators with specifically listed entities using that system outside Russia. Those measures do not concern entities established and operating in Russia, including subsidiaries of Union entities. Decision (CSFP) 2024/1744 does not prohibit Union entities from dealing with Russian entities which use the SPFS, provided that those Union entities do not connect to the SPFS themselves. In addition, in order to avoid unintended consequences on the financing of, and payment for, legitimate business transactions and transactions for other justified purposes, Decision (CSFP) 2024/1744 also sets out targeted exceptions allowing Union entities to connect to the SPFS.

(17) Certain credit and financial institutions established outside of the Union might be facilitating transactions that frustrate the measures established in Regulation (EU) No 833/2014. Decision (CSFP) 2024/1744 establishes a transaction ban on Union operators with credit and financial institutions as well as crypto assets providers, established outside of the Union, when the Council has determined that those entities facilitate transactions that support Russia’s defence-industrial base through the export, supply, sale, transfer or transport towards Russia of dual-use goods and technology, goods and technology as listed in Annexes XI, XX and XXXV to Regulation (EU) No 833/2014, common high priority items as listed in Annex XL to Regulation (EU) No 833/2014, or firearms and ammunition as listed in Annex I to Regulation (EU) No 258/2012 of the European Parliament and of the Council (6).

(18) Decision (CFSP) 2024/1744 further broadens the existing prohibition on the provision of support, including financing and financial assistance or any other benefit, from a Union, Euratom or Member State programme to any legal person, entity or body established in Russia or to any legal person, entity or body majority owned by them. Targeted exemptions are also introduced.

(19) In order not to unduly restrict the right to employment of Union nationals who resided in Russia before the invasion of Ukraine in February 2022 and who are employed by subsidiaries of Union and of partner countries’ entities in Russia, Decision (CFSP) 2024/1744 creates an exemption from the prohibition to provide certain services to the Government of Russia or to legal persons, entities or bodies established in Russia.

(20) The Russian Government and Russian courts have been undertaking actions to illegitimately deprive Member State intellectual property rights holders of their protection in Russia. This has resulted in an undue competitive advantage for the Russian industry and contributed to Russia’s revenues, further enabling it to wage war in Ukraine. In order to neutralise that, Decision (CFSP) 2024/1744 imposes restrictions on accepting applications for registrations in the Union of certain intellectual property rights by Russian nationals, natural persons resident in Russia and Russian companies. In particular, and without prejudice to their procedural rules, Intellectual Property Offices and other competent institutions should not allow the filing of such applications. Moreover, in complying with that obligation, if any such applications are filed, Intellectual Property Offices and other competent institutions should not be required to issue a formal decision of refusal, thereby allowing the possible re-filing once the current restriction is repealed. In order to implement that restriction, Intellectual Property Offices and other competent institutions should be enabled to request the necessary information from natural persons and companies applying for registration of the relevant intellectual property rights.

(21) Decision (CFSP) 2024/1744 introduces a prohibition on the acceptance, by political parties, foundations, alliances, non-governmental organisations, including think tanks, and media service providers in the Union, of financing, donations or any other economic benefits or support from Russia, whether directly or indirectly. In view of the continued concerted efforts by Russia to interfere with democratic processes in the Union and to undermine its democratic foundations, including through influence campaigns and the promotion of disinformation aimed at undermining the territorial integrity, sovereignty and independence of Ukraine and through promoting pro-Russian propaganda aimed at justifying and supporting Russia’s war of aggression against Ukraine, it is appropriate that funding from Russia and its proxies to actors in the Union which form part of the public-opinion forming processes be prohibited. Those propaganda and disinformation campaigns are capable of undermining the foundations of democratic societies and are an integral part of the arsenal of modern hybrid attacks. Restricting that financial support aims to safeguard the integrity of the Union’s political processes, protect Union citizens from manipulation and defend the internal affairs of the Union from malign interference by ensuring the protection of the principles of rule of law, democracy and media pluralism. Member States can counter such interference with democratic processes and undermining of democratic foundations, as appropriate within the confines of existing national compliance frameworks. Consistent with the fundamental rights and freedoms recognised in the Charter, in particular with the right to freedom of expression and information, the freedom to conduct a business and the right to property as recognised in Articles 11, 16 and 17, respectively, thereof, that restriction does not prevent media service providers and their staff from carrying out any other activities in the Union, such as research and interviews. Moreover, that restriction does not modify the obligation to respect the rights, freedoms and principles referred to in Article 6 of the Treaty on European Union, including in the Charter, and in Member States’ constitutions, within their respective fields of application.

(22) 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.