Brussels is preparing to exert control over capital flows and duties against Russia in the event that Hungary blocks the extension of EU economic sanctions imposed against Moscow in response to its war in Ukraine, the Financial Times reports, writes UNN.
Details
The European Commission has informed bloc countries that a significant portion of the sanctions, including the freezing of €200 billion in Russian state assets, could be transferred to another legal basis to circumvent Budapest's veto, the Financial Times reported, citing five officials briefed on the ongoing discussions.
Such preparation, as indicated, comes against the backdrop of the EU's pledge to maintain economic pressure on Moscow amid diplomatic efforts aimed at forcing Russia to agree to a proposed ceasefire and direct peace talks with Ukraine.
But Hungary, whose Prime Minister Viktor Orban has repeatedly delayed EU sanctions against Russia, has threatened to veto the extension of economic restrictions that expire at the end of July unless all 27 member states agree to extend them for another six months. Restrictions also include import bans and price caps in sectors such as energy.
The bypass routes being considered would require only a majority of EU countries to extend the sanctions. Capital controls to prevent funds from flowing into Russia and trade measures such as tariffs are two options that have been mentioned by the European Commission in recent weeks, officials said.
Previous ideas included bilateral measures at the national level that would allow countries such as Belgium, where most of the Russian €200 billion is blocked, to ban the repatriation of Russian assets, the paper writes.
"We are all focused on Plan A," one official said. "But there are discussions about the legal basis for alternative options."
Budapest did not raise serious objections to a new package of sanctions against Moscow, which was discussed at a meeting of all 27 ambassadors on Monday, according to three diplomats briefed on the discussions. The 17th package of measures, targeting companies in China and other countries that help Moscow evade sanctions, is expected to be signed on Wednesday and formally implemented early next week, the paper indicates.
In January, the EU introduced duties on Russian and Belarusian fertilizers, which, according to two officials, is an example of how current sanctions on other Russian imports could be converted into trade measures.
The European Commission has pledged to submit legislative proposals next month that would allow it to ban new Russian gas and spot contracts this year and phase them out completely by 2027. It insisted that these would not be sanctions, but declined to provide more details to member states.
It also said it would propose a tariff on enriched uranium as part of efforts to reduce the EU's dependence on Russian fuel.
Some EU diplomats are concerned that a ban on Russian gas without sanctions would lead to companies being drawn into lengthy legal battles and have demanded assurances from the European Commission that any new measures would be legally sound, the paper writes.
During a meeting last week, the European Commission said it was surprised by the "lack of trust" from member states and that, according to a person present, "the best people" are working on the rules.