Economy 1 June 2023, 4:51pm

Regular vetoes prompt EU to circumvent Hungary in sanction votes

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European Union member states are moving towards an agreement on the 11th package of sanctions targeting Russia for the invasion of Ukraine. But some of the European Commission's proposals to close loopholes and strengthen enforcement are expected to be watered down. However, there is one plane of the negotiations where the Hungarian government could scupper the EU measures. Even the European Commission could pry the veto weapon out of Budapest's hands because of Hungarian obstructionism.

Brussels has put forward several proposals in early May with the key goal of closing loopholes, tackling sanctions circumvention and enhancing enforcement. However, the original plans have been watered down during the back-and-forth negotiations between diplomatic envoys raising the bar to when this tool can be used. For instance, plans to ban ships transporting prohibited goods from entering EU ports are likely to be partly dropped, while restrictions relating to ship-to-ship transfers and vessels that switch off their navigation systems will include a grace period of about 30 days, Bloomberg cited people familiar with the latest legal texts under discussion.

One of the concerns was a plan to target third countries that are failing to prevent Russia from evading the restrictions. The main idea was to deter governments from assisting Russia and crack down on trade channels Moscow may be exploiting. The news agency noted that if diplomatic pressure proves ineffective, the mechanism would allow targeted export restrictions on key goods.

One of these third countries is China, and Hungary, which is welcoming Chinese capital with arms open wide, is not exactly a fan of this idea.

Hungary is blocking EU sanctions on the jailers of Russian dissident Vladimir Kara-Murza, amid a wider dispute involving its Russian banking arm, Euobserver reported. Nine Russians are to be blacklisted: Russian deputy justice minister Oleg Sviridenko, four Russian judges, a notorious prison chief, and three officials.

EU ambassadors had all but agreed on a list of Russian officials to blacklist for sending Kara-Murza to a penal colony for 25 years in April — a de facto death sentence for the disabled activist. The decision was to be finalised by EU foreign ministers in Brussels on Monday (22 May), diplomats said.

Kara-Murza's jailers are to be added to the EU's register of the world's worst human-rights offenders — joining a mixed bag of those who poisoned Russian dissident Alexei Navalny three years ago, Chinese tormentors of Uighur Muslims, and African warlords.

The 11th round of Russia sanctions is to curb sales of dual-use technology and blacklist 100 or so Russian officials and entities over the war in Ukraine, amid ongoing talks on final details. The EU is also preparing to pay out €500m in reimbursements to Ukraine arms donors.

But Hungary is now blocking all three procedures in a "furious" protest that Ukraine designated its OTP Bank as a "sponsor of war" earlier this month, causing stigma for its international reputation, three EU diplomats told EUobserver.

These disputes and delays have led to concerns about the efficiency and effectiveness of EU sanctions procedures. The European Commission has proposed a new sanctions system that would allow names to be included by a majority vote of EU member states, with the aim of preventing individual countries from blocking sanctions for their own reasons.

According to human rights activists and some experts, in order to ensure the effectiveness of EU sanctions and to avoid dysfunction in the decision-making process, it is necessary that no single country should be able to obstruct moral policy for its own self-interest.