Hungary could put a crimp in new EU sanctions targeting Russia

European Commission President Ursula von der Leyen announced during her visit to Kyiv, Ukraine on Tuesday that the EU executive had adopted its proposal for the 11th sanctions package, with the focus now being on cracking down on circumvention. The EU seeks to stop the transit of several export goods via Russia.

We are adding more products to our transit ban. For example, advanced tech products or aircraft parts that are going to third countries via Russia will no longer end up in the Kremlin's hands,

said von der Leyen.

She stressed that the new measures are being worked out "in very close coordination with our international partners, particularly with the G7."

She stressed that additional action is necessary, as "we recently see a growth of highly unusual trade flows between the European Union and certain third countries. These goods then end up in Russia."

This is why [...] we are proposing a new tool to combat sanctions circumvention.

"If we see that goods are going from the European Union to third countries and then end up in Russia, we could propose to the Member States to sanction those goods' export. This tool will be a last resort and it will be used cautiously, following a very diligent risk analysis, and after approval by EU Member States," she said.

Diplomatic sources familiar with the proposal - drafted by von der Leyen's Commission - said it also included blacklisting "tens" of new companies, including from China, Iran, Kazakhstan and Uzbekistan.

But the talks between EU delegates promised to be conflictual, with no quick agreement expected because of differing views, several diplomats told Reuters.

A diplomatic source from an EU country hawkish on Russia was frustrated the Commission's proposal did not include stopping Russian diamond imports or nuclear energy cooperation.

At the opposite end of the debate, a diplomatic source from a country critical of the sanctions said the proposal to target third countries was bound to trigger a fraught discussion.

Hungary is almost certainly one of the countries opposing sanctions on non-EU countries, as some members of the Turkic Council would also be subject to restrictions, and Chinese companies are also expected to be added to the list.

Previously, the Hungarian government led by Viktor Orbán has indicated that it does not support every move on this issue. Similarly, several southern European member states have reservations, according to Rferl.

"[...] it isn't just Hungary that is lukewarm toward anticorruption sanctions. Some other member states, notably in southern Europe, have also expressed reservations by pointing out how far the EU really can go in terms of interfering in what could be classified as domestic issues in third countries," it said.

Restrictions on the diamond trade are a critical step for Belgium, which has repeatedly blocked plans to do so.

All 27 EU countries must agree for new sanctions to take effect in what would be the bloc's 11th round of such measures since Russia invaded Ukraine in February 2022. It would mark the first time the bloc had targeted China over accusations of Beijing's role in the war, something China's foreign ministry warned the EU against.

The new sanctions would highlight that oil tankers are not allowed to offload in high seas or arrive in ports with their GPS trackers off, an attempt to push back against flouting G7 restrictions on trading Russian oil, according to the sources.

"New EU measures will unfortunately do little to address the problem which is old, uninsured vessels performing STS (ship-to-ship transfers) outside the EU," Reuters cited Andrea Olivi, head of wet freight at commodities trader Trafigura, as saying. Olivi pointed to a fire last week on a tanker with no known insurance in waters off Malaysia as an example.

Cover photo: European Union