Council Regulation (EU) 2025/401 of 24 February 2025 amending Regulation (EU) No 692/2014 concerning restrictive measures in response to the illegal annexation of Crimea and Sevastopol

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) 2025/397 of 24 February 2025 amending Decision 2014/386/CFSP concerning restrictive measures in response to the illegal annexation of Crimea and Sevastopol (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 23 June 2014, the Council adopted Regulation (EU) No 692/2014 (2).

(2) Regulation (EU) No 692/2014 gives effect to certain measures provided for in Council Decision 2014/386/CFSP (3).

(3) On 24 February 2025 the Council adopted Decision (CFSP) 2025/397, which amends Decision 2014/386/CFSP.

(4) Decision (CFSP) 2025/397 prohibits, subject to certain exceptions, the supply to Crimea and Sevastopol of banknotes denominated in any official currency of a Member State.

(5) Decision (CFSP) 2025/397 restricts the export to Crimea and Sevastopol of certain goods and technology that are also restricted by Council Regulation (EU) No 833/2014 (4).

(6) Decision (CFSP) 2025/397 prohibits the provision to Crimea and Sevastopol 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 Crimea and Sevastopol of certain software for the management of enterprises and of 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) No 692/2014, 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 (5), Decision (CFSP) 2025/397 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) No 692/2014 applies only within the jurisdictional limits defined in Article 10 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) No 692/2014. Such activities are those resulting in an effect that those restrictive measures seek to prevent, for example, that a recipient in Crimea or Sevastopol obtains goods, technology, financing or services of a type that is subject to prohibitions under Regulation (EU) No 692/2014.

(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) No 692/2014. 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 (6), 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) No 692/2014 should therefore be amended accordingly,

HAS ADOPTED THIS REGULATION:

Article 1

Regulation (EU) No 692/2014 is amended as follows:

(5) Article 2d(4) is deleted;

(7) Article 3 is deleted;

(8) Article 4 is replaced by the following: ‘Article 4 It 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.’

(10) the following Articles are inserted: ‘Article 6a Any person referred to in Article 10, 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 10, 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 6(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 6(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 6b

Where 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 6a, provided that the case has a sufficient connection with the Member State of the court seised.’

(12) the following Article is inserted: ‘Article 7a (2)  Regulation (EU) 2018/1725 of the European Parliament and of the Council of 23 October 2018 on the protection of natural persons with regard to the processing of personal data by the Union institutions, bodies, offices and agencies and on the free movement of such data, and repealing Regulation (EC) No 45/2001 and Decision No 1247/2002/EC (OJ L 295, 21.11.2018, p. 39, ELI: http://data.europa.eu/eli/reg/2018/1725/oj)." (3)  Regulation (EU) No 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down the Union Customs Code (OJ L 269, 10.10.2013, p. 1, ELI: http://data.europa.eu/eli/reg/2013/952/oj)." (4)  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, ELI: http://data.europa.eu/eli/reg/2013/575/oj)." (5)  Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (OJ L 173, 12.6.2014, p. 349, ELI: http://data.europa.eu/eli/dir/2014/65/oj)." (6)  Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC (OJ L 141, 5.6.2015, p. 73, ELI: http://data.europa.eu/eli/dir/2015/849/oj)." (7)  Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation) (OJ L 119, 4.5.2016, p. 1, ELI: http://data.europa.eu/eli/reg/2016/679/oj).’;"

(13) Article 8(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 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 8a Natural 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 IV is added in accordance with Annex II to this Regulation;

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

Article 2

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

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 24 February 2025.

For the Council The President K. KALLAS

(1) OJ L, 2025/397, 24.2.2025, ELI: http://data.europa.eu/eli/dec/2025/397/oj.

(2) Council Regulation (EU) No 692/2014 of 23 June 2014 concerning restrictive measures in response to the illegal annexation of Crimea and Sevastopol (OJ L 183, 24.6.2014, p. 9, ELI: http://data.europa.eu/eli/reg/2014/692/oj).

(3) Council Decision 2014/386/CFSP of 23 June 2014 concerning restrictive measures in response to the illegal annexation of Crimea and Sevastopol (OJ L 183, 24.6.2014, p. 70, ELI: http://data.europa.eu/eli/dec/2014/386/oj).

(4) Council Regulation (EU) No 833/2014 of 31 July 2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine (OJ L 229, 31.7.2014, p. 1, ELI: http://data.europa.eu/eli/reg/2014/833/oj).

(5) Judgment of the Court of Justice (Third Chamber) of 21 December 2011, Criminal proceedings against Mohsen Afrasiabi and Others, C-72/11, ECLI:EU:C:2011:874, paragraph 67.

(6) Directive (EU) 2024/1226 of the European Parliament and of the Council of 24 April 2024 on the definition of criminal offences and penalties for the violation of Union restrictive measures and amending Directive (EU) 2018/1673 (OJ L, 2024/1226, 29.4.2024, ELI: http://data.europa.eu/eli/dir/2024/1226/oj).