EU Explores Belgian Royal Decree to Maintain Russia Sanctions Amidst Hungarian Veto Threat “`

The European Union faces a potential impasse regarding the renewal of sanctions against Russia, scheduled to expire at the end of January, due to Hungary’s threatened veto.

Faced with Hungary’s veto threat, EU officials are exploring alternative strategies to maintain sanctions on Russia, potentially utilizing a 1944 Belgian wartime decree involving the King’s authority. This action aims to safeguard Russia’s frozen assets held by Euroclear, the Brussels-based clearinghouse.

Hungarian Prime Minister Viktor Orban issued a December warning that his government might veto the sanctions’ renewal, requiring unanimous consent for extension.

Failure to reach an agreement by January 31st could release approximately €190 billion (about $213 billion) in Russian sovereign assets held by Euroclear. These funds, intended to repay Ukraine’s $50 billion G7 loan, are considered crucial for negotiating potential ceasefires by the EU.

In response to Hungary’s veto threat, EU officials are considering invoking a 1944 wartime decree. This decree could empower Belgium’s King Philippe to prevent asset transfers. While the Belgian government would formally issue such a decree, the King’s signature and approval would be necessary.

Belgium, hesitant to act unilaterally on Russia’s assets, is wary of legal challenges from Moscow. Invoking royal authority, according to the FT, carries significant legal risks, especially concerning Belgium’s bilateral investment treaty with Russia.

Hungary’s position is reportedly linked to the upcoming Trump administration. Orban reportedly suggested that if the US eases sanctions, Hungary would advocate for a similar EU approach.

Hungary’s decision on supporting the sanctions renewal remains pending, with a preference to consult the incoming Trump administration first, according to Minister for EU Affairs Janos Boka.

“Before deciding on a six-month rollover, it’s natural to consult the incoming US administration on their view of the sanctions regime’s future,” Boka stated to reporters on Thursday, as reported by Reuters.

Sanctions expiry would remove the legal basis for retaining frozen assets, resulting in their immediate return to Russia, according to an EU official quoted by the FT. This would also lift trade restrictions, sector-specific measures against the Russian economy, and the EU’s oil import ban.