The advertisement - which featured a circle of yellow condoms in a mock European flag - provoked more than 160 complaints and caused 'widespread offence', a spokeswoman said.
The promotion, which appeared in the Independent and the Guardian, advertised the 26-country European pass with the headline 'Inter-Rail. You've got the rest of your life to be good.'
Underneath there was a reference to the European Community's year of Europe against Aids.
People complained that it encouraged young people to be promiscuous and was derogatory to the European Union flag.
BR denied that the advertisement encouraged promiscuity and claimed that a large number of 18- to 25-year-olds had sex on holiday.
The ASA upheld the complaints and said: 'The Authority considered the approach to be grossly irresponsible in its encouragement of promiscuity and noted it had caused widespread offence. The advertisers were requested to avoid any similar approaches in the future.' It also requested that BR did not use the illustration of the EU flag again.
A spokeswoman from BR, which has had three complaints upheld against it in the past 12 months, said it apologised for causing offence, but said: 'The creative concept was thoroughly researched amongst the target audience market with no negative reaction.'Reuse content