Draft Regulation

This is a draft EU regulation that spells out in legal terms the mechanism for transferring the frozen Russian accounts from Belgium and elsewhere in the EU to the Union itself. Download the PDF for a printable version.

COUNCIL REGULATION (EU) 2026/...

of ...

amending Regulation (EU) 2025/2600 on emergency measures addressing the serious economic difficulties caused by Russia’s actions in the context of the war of aggression against Ukraine, as regards the establishment of a European instrument for the centralised custody and management of immobilised Russian assets

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) Council Regulation (EU) 2025/2600 established exceptional and temporary emergency measures addressing the serious economic difficulties within the Union caused by Russia’s actions in the context of its war of aggression against Ukraine, including a prohibition on the direct or indirect transfer of assets or reserves of the Central Bank of Russia, or 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.

(2) A significant volume of assets and reserves belonging to the Central Bank of Russia or to entities acting on its behalf remains immobilised within the Union’s financial system pursuant to Union restrictive measures. Those assets are currently held through a limited number of financial arrangements and custodians domiciled in certain Member States. The concentration of such assets in a limited number of national financial infrastructures requires a Union-level response to ensure the uniform and effective implementation of Union restrictive measures and the orderly functioning of the Union’s financial system.

(3) In order to address those risks and ensure a coherent and effective implementation of Union measures, it is appropriate to establish a Union-level mechanism providing for the centralisation of the custody of those immobilised assets and reserves. The purpose of such centralisation is not to affect the ownership of those assets or reserves, which remains with their respective owners, but to organise their safekeeping and management within a uniform Union framework. This centralised custody arrangement should ensure legal certainty for market operators, safeguard the integrity of the Union’s financial infrastructure and prevent fragmentation in the application of Union measures.

(4) The centralisation of custody should therefore be carried out through a specific Union instrument entrusted with the safekeeping and management of the assets concerned. That instrument should operate under strict conditions ensuring the full segregation of the assets placed under custody. The establishment of such an instrument should be understood as a technical and administrative mechanism designed to organise custody and management functions at Union level and should not be interpreted as affecting ownership of the assets concerned.

(5) The measures introduced by this Regulation are exceptional and strictly temporary in nature. They are justified by the current extraordinary circumstances arising from Russia’s war of aggression against Ukraine, including Russia’s continued refusal to acknowledge its obligation to provide reparations for the damage caused by its war of aggression, and the risks that those circumstances pose for the Union’s economic and financial stability. The centralisation of custody of the assets concerned should therefore apply only for as long as those circumstances persist and should be subject to regular review in order to ensure that the measures remain necessary and proportionate.

(6) Accordingly, once the circumstances justifying the temporary measures have ceased to exist, the custody mechanism and the instrument established for that purpose should be wound down in an orderly manner.

(7) In order to achieve the objectives of the centralised custody mechanism, and in line with the international practice followed during the Iraqi conflict, in particular United Nations Security Council Resolution 1483 (2003) calling upon all States to transfer assets of the Iraqi public sector to a single centralised fund, it is appropriate to establish a European instrument for temporary custody and management of the assets and reserves concerned, and to lay down the conditions and procedures enabling the Union, through that instrument, to receive, hold, safekeep, manage and deploy those assets. The Instrument should be open to receiving the assets and reserves concerned both, on a mandatory basis, from entities established in the Union, and, on a voluntary basis, from authorities, central banks, financial institutions or other entities of third countries that elect to transfer custody to the Instrument. Once such custody has been transferred, the Instrument should be empowered to manage and deploy those assets and reserves, with the consent of the Commission, in any manner consistent with the objectives of this Regulation.

(8) In order to ensure the effective and timely transfer of custody, the reporting and centralisation obligations of entities holding such assets should be reinforced. Regulation (EU) 2025/2600 should therefore be amended accordingly.

(9) The Union should preserve its right, and the right of its Member States, to take all appropriate measures, in accordance with international law, to address the consequences of Russia’s war of aggression against Ukraine, including as regards reparations.

HAS ADOPTED THIS REGULATION:

Article 1

Amendments to Regulation (EU) 2025/2600

Regulation (EU) 2025/2600 is amended as follows:

(1) Article 1 is replaced by the following:

‘Article 1

Subject matter

1. 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 its war of aggression against Ukraine and the risk of further deterioration of the economic situation in the Union, as well as the related and increasing threats to public security of the Union, including those directly concerning Belgium for the immobilising of Russian assets currently under Euroclear’s custody.

These measures aim to respond to those difficulties and threats in order to avoid a serious deterioration of the economic and financial stability in the Union and its Member States by preventing significant resources from being made available to Russia to continue its actions in the context of the war of aggression against Ukraine.

2. In order to achieve these objectives, and in line with the international practice followed during the Iraqi conflict, this Regulation establishes the European instrument for temporary custody and management of assets or reserves of the Central Bank of Russia, or 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 (the ‘Instrument’).

3. The assets and reserves of the Central Bank of Russia, or 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 transferred to the Instrument: (i) immediately and on a mandatory basis, by all entities established in the Union; and (ii) on a voluntary basis, by authorities, central banks, financial institutions or other entities of third countries, where those third countries or entities elect to transfer custody of such assets and reserves to the Instrument.

This Regulation lays down the conditions and procedures enabling the Union, through the Instrument, to:

(a) receive and hold all assets or reserves, and the related liabilities, of the Central Bank of Russia, or 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;

(b) deposit those assets in safekeeping in one or more direct accounts for securities and cash opened with one or more appropriate financial institutions, which may include central banks;

(c) provide a record of the ownership of those assets and reserves in the name of the Central Bank of Russia, or of any legal person, entity or body being the legitimate owner, with no prejudice to the prohibition of transfer of such assets and reserves to their owners until the expiry of the temporary application of the measures established by this Regulation;

(d) manage and deploy the assets and reserves in custody in any manner consistent with the objectives of this Regulation;

(e) carry out all relevant administrative functions necessary for the efficient attainment of its objectives, including (without limitation) negotiate, execute and sign all legal documentation related to the use and investment of assets and reserves under custody in compliance with this Regulation, and generally do such other things necessary for the successful implementation of this Regulation.’;

(2) Article 2 is replaced by the following:

‘Article 2

Prohibition on transfer and establishment of the EU instrument

1. Unless otherwise authorised by this Regulation, any direct or indirect transfer of assets or reserves of the Central Bank of Russia, or 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.

2. With effect from [•], centralisation of custody and safekeeping of all assets and reserves of the Central Bank of Russia, or 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 assigned to the Instrument. The Commission shall establish the necessary arrangements (i) for the administration of the Instrument, including its governance, and the management of the assetsand reserves whose custory is transferred to the Instrument, (ii) for the full segregation of the assets whose custody is transferred to the Instrument, including the securities in which those assets shall be invested in compliance with this Regulation, and (iii) for the opening of direct accounts of the Instrument with the European Central Bank and the European System of Central Banks TARGET2 or with any other appropriate central bank or other duly authorised financial institution.

Ownership of the assets or reserves remains with their respective owners at all times.

3. Cash balances and returns on investments corresponding to the assets and reserves referred to in paragraph 1 shall be managed by the Instrument separately.’;

(3) The following Article 2a is inserted:

‘Article 2a

Preservation of ownership

1. Nothing in this Regulation shall be interpreted as affecting the ownership of the assets referred to in Article 2.

2. The measures established by this Regulation consist solely in the temporary centralisation of custody and management functions necessary to ensure the uniform and most efficient implementation of Union restrictive measures and the protection of financial stability.’;

The following Article 2b is inserted:

‘Article 2b

Indemnification of Member States

The Union shall indemnify and hold harmless any Member State, and any financial infrastructure or custodian established in a Member State, in respect of any liability, loss, damage, cost or expense arising from or in connection with the transfer of assets and reserves to the Instrument pursuant to this Regulation, including any claim brought by Russia or by any person or entity acting on its behalf.’;

(4) In Article 3, paragraph 1 is replaced by the following:

‘1. 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 Council, insurance and reinsurance undertakings as defined in Article 13 of Directive 2009/138/EC of the European Parliament and of the Council, central securities depositories as defined in Article 2 of Regulation (EU) No 909/2014 of the European Parliament and of the Council and central counterparties as defined in Article 2 of Regulation (EU) No 648/2012 of the European Parliament and of the Council shall provide to the Commission, by 14 March 2026, information on the assets and reserves referred to in Article 2 of this Regulation which they hold or control or are a counterparty to and shall centralise custody of all such assets and reserves in the Instrument on the accounts opened by the Instrument with the European Central Bank by [•] or such other date that may be indicated by the Commission.’;

The Instrument shall also be entitled to receive and accept, on such terms as the Commission may determine, assets and reserves of the same nature as those referred to in Article 2 of this Regulation which are held, controlled or immobilised by authorities, central banks, financial institutions or other entities of third countries, where those third countries or entities elect to transfer custody of such assets and reserves to the Instrument. The Commission shall be empowered to conclude the necessary arrangements with the competent authorities of such third countries for the purpose of facilitating such transfers.

(5) In Article 3, the following paragraph 1a is inserted:

‘1a. The information required under paragraph 1 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 crypto- assets 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.’;

(6) In Article 6, the following paragraph 1a is inserted:

‘1a. Nothing in this Regulation shall be understood as limiting the right of the Union, or of its Member States, to take any further measures, in accordance with international law, to address the consequences of Russia’s war of aggression against Ukraine.’;

Article 2

Entry into force

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, ...

For the Council

The President

...