(1)

On 24 February 2022, the President of the Russian Federation announced a ‘special military operation’ in Ukraine and Russian armed forces began an attack on Ukraine. That attack is a blatant violation of the territorial integrity, sovereignty and independence of Ukraine. Since then, the war of aggression against Ukraine has continuously escalated and the Russian destabilising activities and hybrid campaigns have extended to the territory of Member States of the Union.

(2)

In addition to a devastating impact on the Ukrainian economy, Russia’s war of aggression against Ukraine and Russia’s actions against the Union have created and continue to create serious economic challenges outside Ukraine. Given the proximity of the Union to Russia and Ukraine, and given Russia’s war of aggression against Ukraine as well as Russia’s actions against the Union, the Union’s economy has been affected and is expected to continue to be affected as long as Russia persists in its war of aggression. Furthermore, it is expected that the Union’s economy would be affected even more severely should the situation in Ukraine deteriorate.

(3)

The unjustified and unprovoked war of aggression against Ukraine triggered a shock to the Union economy through serious supply disruptions, higher uncertainty, increased risk premia, and lower investment and consumer spending in the Union. As a result, the annual average GDP growth in 2022–2023 was 1,9 percentage points lower than projected in the Commission’s 2021 Autumn Forecast for the median Member State.

(4)

In particular, Russia’s full-scale invasion of Ukraine in February 2022 sent oil, gas and food prices sharply higher, as markets adjusted to the loss or potential loss of exports from two major commodity suppliers. It also directly resulted in disruption to supply chains for Union imports from Ukraine, especially cereals and vegetable oils, as well as to exports from the Union to Ukraine, creating a particularly severe impact on the agriculture, food processing, fisheries and aquaculture sectors in the Union. Some metals and raw materials have become in short supply, because of the military aggression and the retaliatory measures taken by Russia, increasing costs for Union industries.

(5)

In light of the negative impacts on energy markets caused by Russia’s actions, Member States have put in place support for households and undertakings. The fiscal measures adopted by the Member States in the period 2022 to 2024 to minimise the macroeconomic and social impact of high energy prices amounted to more than EUR 365 billion. On 17 March 2023, the Commission adopted its Communication on a Temporary Crisis and Transition Framework for State Aid measures to support the economy following the aggression against Ukraine by Russia (1) which was followed on 4 July 2025 by a Communication on a Framework for State Aid measures to support the Clean Industrial Deal (Clean Industrial Deal State Aid Framework) (2).

(6)

Russia’s aggression against Ukraine and its weaponisation of energy supplies also exacerbated the urgency for the Union to reduce its dependence on fossil fuels by accelerating the roll-out of renewable energy, decarbonisation of industry and the deployment of capacities in sectors strategic to the transition towards a net-zero economy, also taking into account global challenges posing a threat of investments in those sectors being diverted in favour of third countries outside the EEA. At its level, the Union has taken several measures to respond to the energy crisis, including the REPowerEU that aimed to accelerate the transition to green energy and increase the Union energy independence. Under REPowerEU, an additional EUR 20 billion was made available to Member States through Regulation (EU) 2021/241 of the European Parliament and of the Council (3) to address the energy crisis resulting from the impact of Russia’s war of aggression.

(7)

In addition, Russia has been negatively impacting the Union economy and business through the seizure, confiscation or forced sale of economic assets within Russia belonging to Union investors. That negative impact comes on top of the separate payments and taxes levied on Union entities and investors, alongside significant restrictions on the free movement of capital, which in turn distort investments and negatively affect companies and markets. The risks of further asset seizures remain elevated, given the existing exposure and Union investors’ inability to exit the Russian market. In that context, on 30 September 2025, the President of the Russian Federation signed a decree for the accelerated sale of assets following their seizure.

(8)

In addition to the loss of economic growth and purchasing power, Russia’s actions have led to significant direct fiscal costs for Member States. This has happened in a period where Member States’ finances are still recovering from the COVID-19 crisis. A significant part of the budget of the Union has also had to be redirected towards measures aimed at addressing the direct and indirect consequences of Russia's war of aggression against Ukraine.

(9)

Those different elements show that Russia’s war of aggression against Ukraine has already had, and is continuing to have, direct and indirect repercussions on the economy of the Union and has significantly impacted the fiscal situation of the Member States. Despite all the measures taken at Union and Member State level, the effects of the disruptions caused by Russia's war of aggression against Ukraine and other actions by Russia on the territory of the Union have directly and indirectly affected the Union’s economic performance and have significantly impacted the fiscal situation of the Member States.

(10)

This situation of unprecedented urgency is a result of external factors which are beyond the control of the Member States and seriously impacts their economies. It threatens to affect them even more if immediate action is not taken to limit the capacity of Russia to intensify hybrids attacks over the territory of the Union. A swift and coordinated response at Union level is therefore needed. Such action should be taken in a spirit of solidarity between Member States in order to avoid the unequal repercussions that an increase of the threat by Russia threatens to have on the Member States, and in particular on those which are the closest to the borders of Russia and Ukraine. This response is without prejudice to appropriate measures adopted by the Council under the Common Foreign and Security Policy in relation to restrictive measures against Russia.

(11)

The need for urgent action arises from the recent stark deterioration of the security situation in Ukraine and in the Member States, which represents a real threat to the stability of the economic situation of the Union and is highly dependent on different parameters and their evolution in time.

(12)

Given the urgency of the above situation, it is appropriate to prohibit, on a temporary basis, any direct or indirect transfer of 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 (the ‘Central Bank of Russia or related entities’), in order to ensure that the assets and reserves of the Central Bank of Russia or related entities are not transferred to or for the benefit of Central Bank of Russia or related entities and ultimately Russia.

(13)

The transfer of funds to Russia should be prevented as a matter of urgency to limit the damage to the Union’s economy. Military spending has largely driven Russia’s robust growth since 2022, but the pace of Russia’s economic expansion has weakened markedly in 2025. The slowdown reflects inter alia the adverse impact of accumulated imbalances, notably high inflation and interest rates. The fiscal situation of Russia has worsened further in 2025, as oil prices have dropped, the Ruble has appreciated and Western sanction efforts have once more intensified. Given Russia’s fiscal position, it can be expected that any additional resources received would be directly used to finance its unjustified and unprovoked war of aggression against Ukraine with serious consequences for the European Union and its Member States.

(14)

This would create serious difficulties for the Union’s economy for two main reasons.

(15)

Firstly, the transfer of additional resources to Russia would exacerbate the risk of an escalation of hybrid belligerent activities targeted against Member States and in the territory of the Member States, creating additional economic disruptions and fiscal and economic costs, and adding to economic uncertainty. In its conclusions of 26 June 2025, the European Council strongly condemned all types of hybrid activities, in particular Russia’s continued hybrid campaign, including sabotage, disruption of critical infrastructure, cyber-attacks, information manipulation and interference, and attempts to undermine democracy, including in the electoral process. In those conclusions, the European Council noted that the Union and the Member States will continue to strengthen their resilience, prevent, deter and respond to Russia’s hybrid threats.

(16)

Russia’s hybrid activities are increasingly used in an attempt to destabilise not only Ukraine but also the Member States and the Union (for example through sabotages, drones, economic espionage, interference in election processes and misinformation campaigns). In this context, the Union and its Member States and businesses have suffered direct costs in addressing Russia’s hybrid campaign.

(17)

In the absence of a prohibition on the transfer of assets and reserves of the Central Bank of Russia or related entities, it is likely that those resources could be used to support Russia’s hybrid campaign, thereby deepening the economic difficulties in the Union. For example, in recent weeks the airspace has been violated over Belgium, the Netherlands, Poland, Romania, Denmark, Estonia, Germany, Lithuania and Latvia. Those incidents are a pattern, not accidental and risk being exacerbated in the case of a transfer of assets and reserves to, or for the benefit of, the Central Bank of Russia or related entities and ultimately Russia.

(18)

Secondly, the availability of additional funds for Russia’s war of aggression risks prolonging and aggravating economic uncertainty and would require a greater fiscal response from the Union and its Member States to support Ukraine and the Union’s economy.

(19)

The European Council Conclusions from 23 October 2025 recognise that Russia’s war of aggression against Ukraine and its repercussions for European and global security in a changing environment constitute an existential challenge for the Union. The Joint Communication of the High Representative and of the Commission Preserving Peace, Defence Readiness 2030 Roadmap (4) indicates that Ukraine remains Europe’s first line of defence and is an integral part of Europe’s defence and security architecture.

(20)

In this context, should Russia’s war of aggression continue, it can be expected that the repercussions on the Union’s economy would be even more severe in the case where Ukraine would not be able to support the fiscal efforts that are necessary for the continuation of its war effort. A defeat of Ukraine would also be associated with an increased risk of aggression, including through hybrid activities, by Russia against one of the Member States or a country in the neighbourhood of Ukraine, including candidate countries, having immediate direct and indirect repercussions of unprecedented magnitude on the security and economic situation in the Union. Such a situation would further increase the level of uncertainty for economic operators. That impact would likely be more severe in the Member States which are closer to the borders of Ukraine, Russia and Belarus. Recent econometric analysis by the Commission suggests that due to the war GDP growth in 2022–2023 was already 1,4–1,8 percentage points lower in Member States bordering the countries at war compared to the Union average, with losses only moderating slightly when extended to 2024.

(21)

In October and November 2025, Russian air attacks targeting transport networks, residential areas and energy infrastructure in Ukraine intensified further. Russia launched seven large-scale combined missile and long-range drone attacks, causing severe disruptions to Ukrainian energy production and resulting in the need for additional gas imports for the heating season. The most devasting attacks took place during the nights of 7 November, involving over 500 drones and missiles, and 24 November, with 464 drones and 22 missiles. According to figures presented by the UN Human Rights Monitoring Mission in Ukraine on 25 November 2025, civilian casualties in major cities in 2025 (January to October) increased by 26 % compared to the previous year, while civilian injuries increased by 75 % over the same period. Since the start of the full-scale invasion by Russia, at least 14 534 civilians have been killed, including 745 children, and 38 472 injured, including 2 349 children.

(22)

Additionally, the military aggression against Ukraine by Russia has already led to a major displacement of Ukrainian citizens both internally and in neighbouring countries, with an unprecedented inflow into the Union of displaced persons from Ukraine, with major humanitarian and economic consequences for the Member States. In particular, the Union and its Member States have had to and continue to have to make an important fiscal effort to host displaced persons from Ukraine. Russia’s invasion of Ukraine has forced millions of people to flee their country to safety, mostly towards Member States. By the end of September 2025, a total of 4,3 million non-EU citizens who fled Ukraine have received temporary protection under Council Directive 2001/55/EU (5). Since 2022, the gross fiscal cost for the Union associated with hosting displaced persons from Ukraine is estimated at about 0,2 % of GDP per year and different estimations show that the resulting fiscal costs for the Member States in the period between 2022 and 2025 could reach above EUR 155 billion. A further escalation of Russia’s war of aggression could lead to the risk of sudden and mass influx of displaced persons from Ukraine or of persons in need of international protection.

(23)

As a consequence of Russia’s actions in Ukraine, which pose a direct threat to the security situation in the Union, the Union and its Member States have had to substantially increase their investments in defence capabilities. Since the start of Russia’s war of aggression against Ukraine in February 2022, the Union defence expenditure-to-GDP ratio has increased by around 0,25 percentage points, reaching 1,5 % of GDP in 2024 (or around EUR 270 billion). On 28 May 2025, the Council adopted, as an emergency measure, Council Regulation (EU) 2025/1106 (6) which aims to provide financial assistance to Member States to allow them to support their defence industrial readiness. The Commission Autumn 2025 Forecast projects a further increase in defence spending of around 0,5 percentage points by 2027, when it would reach 2,0 % of GDP (or around EUR 405 billion). In addition to those economic consequences for the Union’s economy caused by Russia’s war of aggression in Ukraine, Russia is itself causing direct economic impacts on the Union’s economy through its actions. This would be suddenly and drastically aggravated if Russia had access to additional funds in the absence of a transfer prohibition.

(24)

In light of those different considerations, ensuring a prohibition on the transfer of assets and reserves of the Central Bank of Russia or related entities to or for the benefit of the Central Bank of Russia or related entities and ultimately Russia is a measure that is appropriate in order to avoid further repercussions of unprecedented magnitude on the economic situation of the Union caused by Russia’s actions. In so far as it is limited in time and reversible, it does not go beyond what is necessary to pursue that objective.

(25)

It is also appropriate, under the current circumstances, that the financial institutions which hold assets and reserves of the Central Bank of Russia or related entities, manage separately the cash balances that have been accumulating as the assets mature.

(26)

The specific measures set out in this Regulation are without prejudice to the assets of the Central Bank of Russia that consist of a claim against Union financial institutions that is subject to transfer restrictions. The ownership of those assets is not impacted by the measures provided for under this Regulation. The cash balances accumulating on the balance sheets of the financial institutions holding assets and reserves of the Central Bank of Russia as a result of the prohibition on transfers to or for the benefit of the Central Bank of Russia do not belong to the Central Bank of Russia and do not constitute sovereign assets. The prohibition on transfers of the assets and reserves of the Central Bank of Russia or related entities is temporary, reversible and under periodic review.

(27)

Those additional measures create new obligations for the financial institutions holding assets and reserves of the Central Bank of Russia or related entities for the purpose of alleviating the economic consequences for the Union of Russia’s war of aggression against Ukraine. Given the context in which those measures are taken and the fact that those measures pursue a public policy objective of avoiding the deterioration of the Union economy in a security crisis situation, those measures fully respect the fundamental rights and freedoms recognised in the Charter of Fundamental Rights, in particular Article 17 read in accordance with Article 52 thereof, as they are justified and proportionate to the objectives pursued.

(28)

The measures linked to the prohibition on transfers of the assets or reserves of the Central Bank of Russia or related entities should remain temporary. They should be maintained as long as the making available of significant financial and other resources to Russia to continue its actions in the context of its war of aggression against Ukraine poses, or threatens to pose, serious economic difficulties within the Union and the Member States and the risk of causing further serious deterioration of the economic situation in the Union and in the Member States persists. It is therefore appropriate to discontinue the measures provided for in this Regulation where Russia ceases its war of aggression against Ukraine, provides reparations to Ukraine to the extent necessary to allow for reconstruction without economic and financial consequences for the Union and where Russia’s actions in the context of its war of aggression against Ukraine have objectively ceased to pose a serious risk of severe difficulties to the economy of the Union and its Member States. For that purpose, the Council, on a proposal from the Commission, which should take into account the Commission report on the basis of the annual review of this Regulation, should amend this Regulation, including by laying down appropriate, strictly necessary and temporary winding-down provisions for the protection of the legitimate interests of the operators of the Union and of the Member States, including an appropriate timeframe for the fulfilment of obligations following the discontinuance of the measures. In particular, to ensure legal certainty and an orderly winding down, rules on the timeline and modalities of the reimbursement of cash balances should be established.

(29)

The need to ensure the financial stability of the Union and to safeguard the systemic importance of central securities depositories for the functioning of securities markets should be taken into consideration in the application of this Regulation.

(30)

Considering the scale of the crisis, the level of its social, economic and financial impact and the need to act as soon as possible, this Regulation should enter into force as a matter of urgency on the day following that of its publication in the Official Journal of the European Union.

(31)

Since the objectives of this Regulation cannot be sufficiently achieved by the Member States, but can rather be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary to achieve those objectives,