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The renewal of the restrictions, set to expire at the end of January, has been in limbo due to Hungary’s veto threats
EU officials are developing backup plans to secure sanctions against Russia, including potentially invoking an 81-year-old law that involves the Belgian king, after Hungary threatened to veto their renewal, the Financial Times reported on Friday. In particular, the bloc is seeking to hold on to Russia’s frozen assets held by the Brussels-based clearinghouse Euroclear.
Hungarian Prime Minister Viktor Orban warned the EU in December that his government could veto the sanctions, which require unanimous approval to be extended.
If no agreement is reached, the sanctions will expire on January 31, potentially unlocking Russian sovereign assets worth €190 billion (around $213 billion) currently held by Euroclear. The profits generated from the assets will be used to repay the G7’s $50 billion loan to Ukraine. The EU considers the funds vital for negotiating any potential ceasefire agreement, the outlet noted.
In response to Budapest’s veto threat, EU officials are reportedly contemplating invoking a wartime decree from 1944 that could grant Belgian King Philippe the authority to block the transfer of assets from the country. Although the government would be responsible for issuing such a decree, it would still require the king’s approval and signature.
Belgium, which has resisted taking unilateral action regarding Russia’s assets, is concerned that such measures could expose it to legal challenges from Moscow. According to the FT, the country’s officials acknowledge that invoking royal powers could be legally fraught, particularly given Belgium’s bilateral investment treaty with Russia.
Hungary’s stance is linked to Donald Trump soon taking office as US president, the article said. Orban has reportedly suggested that if Trump eases US sanctions on Moscow, Budapest would push for the EU to adopt a similar approach.
Hungary has not yet decided whether to support the renewal of EU sanctions on Russia, and believes the bloc should make a decision only after consulting with the incoming Trump administration, Minister for EU Affairs Janos Boka said.
“I think it is only natural that before we decide on the rollover for another six months, we ask the incoming US administration how they see the future of the sanctions regime,” Boka told reporters on Thursday, according to Reuters.
If the sanctions expire, financial intermediaries would have no legal basis to retain the frozen assets, meaning “the money [would be] in Russia the next day,” according to an EU official cited by the FT. Trade restrictions and measures against various sectors of the Russian economy, as well as the EU’s oil import ban, would also be lifted.
