Hungary and the future of EU sanctions on Russia

The removal of US sanctions imposed on Hungarian Prime Minister Viktor Orban’s aide Antal Rogan signals a potential shift in the US position with regards to both Hungary and Russia. Rogan is a senior aide who was sanctioned by the Biden administration in January 2025 for corruption. OFAC at the time said Orban, “orchestrated schemes designed to control several strategic sectors of the Hungarian economy.” 

In a statement from Secretary of State Marco Rubio’s spokesperson, they said the sanctions on Rogan were “inconsistent with US foreign policy interests”. In a talk between Rubio and Hungarian Foreign Minister Péter Szijjártó, Rubio informed Szijjártó of the changes and they discussed “ways to strengthen U.S.-Hungary alignment on critical issues and opportunities for economic cooperation.” 

Reports from EU insiders earlier this week, following instructions from EU leaders to work on a 17th package of EU sanctions on Russia, have stated that those Pro-Russia sanctions Member States, and the Commission, believe they may have found a potential solution to prevent Member States blocking the renewal of these sanctions by individual Member States. This has come to the forefront of concerns again following the difficult negotiations earlier this year during the renewal negotiations in January.  

The EU’s Russia sanctions regime will be up for renewal in September, given the sunset clauses inbuilt within EU sanctions, and negotiations will likely begin shortly, given the approach of the Summer period. The questions over Member States abilities to veto sanctions are particularly important given the position of Hungary, under Orban. Orban is particularly close to the Putin regime, and has increasingly been objecting to EU sanctions.  

The options being considered are: 

• Transitioning the sanctions measures into trade-related matters, removing them from Common Security Foreign Policy (CFSP) matters and positioning them as Customs ones, which would therefore not need unanimity.  
• The most likely option is changing the dynamic of EU sanctions to focus on setting the parameters for sanctions that would be adopted by Member States under national legislation; such a move would need unanimity, as sanctions would only apply in those EU Member States that adopted the necessary domestic legislation. This would avoid the potential issue of sanctions being lifted because EU-level sanctions must be agreed by consensus of all Member States to become law. Diplomats from at least 6 EU Member States have suggested that their countries would look to adopt such legislation domestically. Currently, all EU sanctions regimes must be renewed on a six-month to one-year basis and as with the adoption of sanctions, the renewal must be agreed unanimously. The trade-based option seems the most unlikely to be pursued, however, as it would only cover the trade elements of the existing EU sanctions on Russia. 
• A final more ‘nuclear’ option being considered is to withhold EU funding from Hungary unless it agrees to renew the sanctions. However, this is far from a desirable option as it would likely lead to legal action by Hungary and may push other Member States into supporting Hungary, as countries like Poland, Austria, Greece, and the Czech Republic have been resistant to such action in the past. Indeed, when it comes to sanctions more broadly, it is well known that a number of EU Member States are not the strongest proponents and have at various times sought to block sanctions on other countries. Additionally, it would be complicated by the grounds under which such action was undertaken. The incoming German government has been clear it will be seeking a tougher approach to countries within the EU who violate the rule of EU law. However, where Hungary utilises its veto to block a renewal of sanctions on Russia, this would not mean they’d be violating the rule of EU law. In fact, if anything, any pursuit against Hungary may be labelled as such, on Common Security Foreign Policy, all Member States have the power of a veto. Therefore, being punished for using it would in fact be a breach of EU law. 

There seems to be an increasing degree of pessimism regarding the future of Russia-based sanctions at the EU, especially given the direction of travel in the US, under Trump, and the close relationship between Trump and Orban. Whilst the options being set out will provide some resilience to the current EU sanctions if they rely on domestic legislation, this may well give rise to a more complicated sanctions compliance picture with individual Member States' adopted sanctions, and having to designate and hold all corresponding evidence.  

It is clear from all of this that there are significant questions about the future of the EU’s sanctions regime on Russia if Hungary will not approve the renewal. Whatever the solution, it is likely it will make sanctions compliance more complex, with greater divergence emerging. 

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