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EU officials are drawing up fallback measures including the use of an 81-year-old law involving the Belgian king to safeguard the bloc’s sanctions against Russia after Hungary threatened to veto their renewal.
Hungarian Prime Minister Viktor Orbán told the bloc’s other 26 leaders in December that he could block this month’s rollover of EU sanctions against Russia, which requires unanimous approval — a move that would lead to the expiry of the measures on January 31.
Orbán said he was awaiting the inauguration of Donald Trump as US president on Monday. If Trump eases US sanctions on Moscow, Orbán said he would insist that the EU follows suit.
“Now there’s a significant change in the US administration . . . a meaningful exchange should take place before we decide to roll over the sanctions regime for another six months,” János Bóka, Hungary’s EU affairs minister, told reporters on Thursday. “We want to reserve our decision until we know how the US administration sees the future of the sanctions regime.”
The outgoing Biden administration on Wednesday relisted some 100 entities from the finance, energy and defence sectors under a different law that involves Congress in a bid to complicate any efforts by Trump to take them off the Russia sanctions list.
While EU officials say their primary focus is on convincing Orbán to keep the sanctions against companies and Russian sovereign assets frozen in the EU, they are working out measures that could safeguard at least some of them.
They include around €190bn of Russian state assets at the Belgium-based central securities depository Euroclear. The profits arising from those assets will repay a $50bn loan to Ukraine, and officials believe they are a critical part of a potential ceasefire agreement.
If sanctions lapsed an official described “the money being in Russia the next day” as financial intermediaries would have no legal basis to hold on to it. Trade restrictions and sectoral sanctions such as an oil import ban would also end.
“I am really very worried about this and others should be too,” said a senior EU diplomat who is in regular discussions with Hungarian officials. “There’s a high chance Orbán does not break.”
As the state assets are physically held at a Belgian entity, one fallback option is to utilise a wartime decree passed in 1944 that allows King Philippe to block the transfer of assets from the country, according to four officials involved in the discussions.
The Royal Palace declined to say whether the king had been approached, adding that the responsibility for such a decree lay with the government, although it would need to be signed by the sovereign.
Euroclear declined to comment.
“Belgium, together with the other EU member states, is doing everything possible to reach an agreement on the renewal of sanctions against Russia. We have been able to reach an agreement in the past and we will continue to work to ensure that this is also the case this time,” a spokesperson for Belgium’s foreign ministry said.
Belgium has long resisted implementing national measures regarding the immobilised assets, which it fears would leave it open to legal challenges from Russia. One Belgian official said that using the extraordinary powers would infringe a bilateral investment treaty Belgium has with Russia.
“If Orbán doesn’t yield, the only solution is a national one,” said a senior Commission official involved in the preparations.
Several member states have floated the proposal of stripping Hungary of its voting rights to push through the renewal, but such a drastic move would probably fail to secure the required unanimous support from all the other states.
Anitta Hipper, EU spokesperson for foreign affairs, said that “work is ongoing to ensure a smooth and timely agreement” by member states to extend the sanctions.
Additional reporting by Henry Foy and Marton Dunai in London and Andy Bounds in Brussels