Hungary defies sanctions: Trump ally moves to unfreeze billions in Russian assets

15 March 2025 is the deadline for the European Union to renew sanctions against individuals and organisations involved in Russia’s aggression against Ukraine.  

If the deadline is missed, more than 2,400 sanctioned individuals and businesses could suddenly be freed from EU-imposed restrictions.  

There is now a real danger of this happening thanks to Hungary, which is blocking the approval of sanctions. Hungarian Prime Minister Viktor Orbán, one of Trump’s key allies in the EU, has repeatedly undermined EU unity on sanctions. However, until now, Hungary’s opposition has usually amounted to blackmail, demanding concessions from the EU in exchange for its support. This time, however, Brussels sources say Hungary is not making any demands at all.  

The sanctions package at risk includes the freezing of tens of billions of euros in assets belonging to Russian companies, oligarchs and politicians.  

If the EU fails to renew the restrictions before the deadline, there is a real danger that these funds could be moved out of Europe and lost forever, eliminating a crucial potential resource for Ukraine’s reconstruction and military procurement.  

European diplomats are currently scrambling to prevent the worst-case scenario from materialising. However, the issue is likely to resurface as early as July.  

European Pravda has uncovered some behind-the-scenes details and explains what is happening.

What sanctions are at stake?

In simple terms, the European Union's sanctions regime against Russia consists of two main categories, with a history dating back to 2014.  

In March 2014, following Russia’s illegal annexation of Crimea, the EU imposed individual sanctions on persons and companies responsible for undermining Ukraine’s territorial integrity, sovereignty and independence. In July 2014, after Russian forces shot down Malaysia Airlines Flight MH17, killing all 293 people on board, including 211 EU citizens, the EU introduced economic (or sectoral) sanctions targeting entire sectors of Russia’s economy and key areas of business.  

Both sanction categories have been repeatedly expanded since then. Even after Russia’s full-scale invasion of Ukraine in 2022, the EU maintained the legal framework of its 2014 sanctions, continuing to add new restrictions within the same regulatory framework.  

However, a key procedural legacy from the pre-war period remains: EU sanctions are only valid for six months at a time and must be formally renewed by the European Council every six months.  

The renewal process usually takes place without any debate via a written procedure.  

But in 2025, things did not go as planned.

All EU sanctions decisions require unanimity. Consequently, the requirement to renew them every six months enables individual countries such as Hungary to exert leverage by threatening to block a decision in exchange for concessions.  

When sectoral sanctions were up for renewal in January 2025, Hungary again used this tactic but ultimately relented.  

Now the renewal of individual sanctions is at stake. Hungary has once again opposed the extension and has not yet lifted its veto.  

The sanctions package in question is vast, targeting over 2,400 individuals and entities involved in crimes against Ukraine and its sovereignty since 2014. This includes top Russian leadership – Vladimir Putin, Foreign Minister Sergei Lavrov, Prime Minister Mikhail Mishustin, former and current Defence Ministers Sergei Shoigu and Andrei Belousov, and numerous oligarchs who fund the Kremlin.  

Under the current decision, all these sanctions are set to expire on 15 March 2025. If they are not renewed, all restrictions will be legally lifted on 16 March 2025.  

The sanctions under threat include EU travel bans and asset freezes for Russian individuals and businesses. The latter is particularly significant, as it prevents the Russian elite from accessing and moving their wealth within Europe.

The secrets behind Europe's asset freeze 

The mechanism for freezing Russian assets became fully operational after the full-scale invasion of Ukraine in 2022.  

The total value of Russian assets immobilised in jurisdictions across the EU, the G7 and Australia is estimated at approximately €260 billion. The majority of these funds – around €210 billion – are frozen within the European Union, with €190 billion held in Belgium’s Euroclear, the world’s largest securities depository.  

Discussions of frozen Russian assets often focus solely on Russia’s state funds, primarily those of the Central Bank of Russia (CBR).  

However, as European Pravda has learned, that is far from the whole story.  

Money belonging to Putin and his oligarchs is in the mix.

"Indeed, more than half of the frozen assets do belong to the Central Bank. But at least a third of the total sum consists of funds belonging to sanctioned Russian individuals and entities," a diplomat from a key EU member state told European Pravda.  

Russian sources also estimate that about a third of the frozen assets in the EU do not belong to the Russian Central Bank.  

While Euroclear does not disclose exact figures, it was recently forced, under Belgian tax regulations on windfall profits, to acknowledge that a significant portion of its frozen Russian assets does not belong to the CBR.  

European diplomats recognise that if individual sanctions are not renewed, these assets could be lost.  

According to an EU official who spoke to European Pravda on condition of anonymity due to the sensitivity of the matter, failure to extend the sanctions could effectively unfreeze up to 30% of all frozen Russian assets.  

That means at least €60 billion (possibly more) could be at stake.  

This poses a serious threat to Ukraine's financial aid programmes.  

Since late 2024, a new mechanism has been in place whereby G7 countries provide Ukraine with financial aid through loans backed by windfall tax revenues from frozen Russian assets.  

If a third of those assets are unfrozen, the resulting loss in revenues would undermine this funding model. Even more critically, it would dash hopes of transferring the frozen assets themselves to Ukraine – something Kyiv considers a potential source for war reparations and reconstruction funding.  

For now, all these plans hang in the balance due to Hungary's obstruction.

What does Orbán want?

Brussels has no doubt that Hungary is aligning its position with the United States.  

"They want to change everything through the so-called American peace negotiations," a diplomat familiar with EU sanctions talks told European Pravda.  

The latest round of discussions took place on 10 March in Brussels, during a meeting of EU member state ambassadors.  

"For most EU countries, extending sanctions is about ensuring that Ukraine has a strong position in any negotiations. Hungary sees it differently," the diplomat emphasised, adding that Budapest is not demanding the complete removal of sanctions, but a reduction of the list.

Multiple sources say that Hungary initially sought to have eight individuals removed from the sanctions list, although diplomats refuse to disclose their names. There has been speculation that Budapest may be pushing for sanctions on Vladimir Putin, Sergei Lavrov and several other Russian officials to be lifted, potentially as a way of creating a more favourable atmosphere for peace talks from the Kremlin’s perspective. However, European Pravda has been unable to confirm or refute these claims.  

One detail about Hungary's position is particularly alarming: its diplomats are no longer presenting clear demands.  

"Hungary has stated that for now, it does not have a mandate to make a decision on renewing the sanctions regime against Russia," an EU source familiar with the 10 March discussions told European Pravda.  

At the time of publication, Hungarian representatives in Brussels had not responded to a request for comment.  

What happens next? 

The European Commission believes that Hungary will likely agree to extend sanctions at the last minute.  

However, EU diplomats are considerably more sceptical.  

Two diplomats representing different regions of the EU have suggested that an agreement with Hungary might not be reached by the deadline, meaning the sanctions could expire on 16 March.  

"We are very concerned, because this could create serious problems," one of them told European Pravda.  

Even in the worst-case scenario, Brussels would still have a brief window to negotiate a late agreement and prevent the release of frozen assets. The EU’s infamous bureaucratic complexity, with its multiple legal and procedural steps, could delay Russia from regaining access to its funds.  

Brussels is already preparing for this scenario.  

If Hungary continues its blockade until 15 March, the issue will be raised at the EU Foreign Affairs Council meeting on Monday, 17 March. There, foreign ministers from 26 EU states will seek ways to pressure Hungary into approving the sanctions extension.  

Some EU officials see this as the most likely outcome.  

"Individual sanctions against Russia will be extended on Monday, 17 March during the Foreign Affairs Council meeting, which oversees sanction regimes," one European diplomat confidently stated.  

Even if the EU manages to avoid the consequences of a brief lapse in sanctions, this episode raises serious concerns about the integrity of the EU’s sanctions framework as a whole.  

For now, European negotiators are using all available leverage, including behind-the-scenes diplomatic tools, to persuade Hungary to approve the sanctions in time.  

The next meeting of EU ambassadors is scheduled for Wednesday, 12 March, followed by another critical session on Friday, 14 March, the eve of the deadline.  

Tetiana Vysotska, 

European Pravda’s correspondent in Brussels