EU Considers Capital Controls and Tariffs Against Russia Amid Hungary’s Veto Threat
Brussels is preparing to implement measures such as capital controls and tariffs on Russian goods if Hungary blocks the extension of EU sanctions against Russia, which were imposed in response to Moscow’s aggression in Ukraine.
The Gaze reports on this with reference to Financial Times.
The European Commission has informed EU member states that a substantial portion of the sanctions, including the €200 billion in frozen Russian state assets, could be transferred to a different legal framework in order to circumvent Hungary’s veto.
The proposed measures under consideration also include trade restrictions such as tariffs and capital controls, aimed at halting the flow of funds into Russia. Notably, these alternative actions would not require the unanimous approval of all 27 EU member states, unlike the sanctions extension, which needs consensus across the entire union.
“We are fully focused on Plan A, but alternative legal options are also on the table,” one official commented.
At a meeting of all 27 EU ambassadors on May 12, Hungary reportedly did not express significant opposition to the new sanctions package. The 17th sanctions package, targeting entities in China and other countries aiding Russia in evading sanctions, is expected to be approved on May 14 and officially enforced early next week.
The package will primarily focus on Russia’s military apparatus, as well as its so-called “shadow fleet” – a network of vessels used to circumvent maritime sanctions. While Hungary has not blocked the sanctions package outright, it has expressed concerns about the potential impact on its economic interests, specifically seeking to protect the Hungarian arm of Russian oil giant Lukoil from punitive measures.
On May 13, EU foreign ministers are set to review additional “punitive, financial, and economic sanctions” targeting Russia.
As The Gaze reported earlier, the Security Service of Ukraine states that it has exposed a Hungarian military intelligence network that was spying against Ukraine in Zakarpattia region.