EU to tighten sanctions enforcement, Hungary among the targets

The European Commission is getting frustrated with member states, such as Hungary because they enforce the sanctions against Russia superficially. The EU could force Hungary and other countries to report how they act against Russian businessmen.

Even the European Commission is getting fed up with the bloc’s lukewarm enforcement of certain sanctions against Russia, portfolio.hu reports. The European Commission plans to monitor certain countries, such as Hungary more strictly with new regulations regarding transparency.

Since the start of the war, the European Union has adopted 10 sanction packages against Russia. Alongside the import ban on Russian raw materials and export bans on technology, the EU also seized assets from various individuals, state and private companies in Russia.

Countries insist on keeping information confidential

According to the latest available data, the EU sanctioned 1,473 individuals and 205 organisations with business connections to Russia. In response to a question from Portfolio, the European Commission stated that the total amount of assets frozen in the EU as of mid-March was about EUR 21 billion.

Portfolio writes that the European Commission wanted to map the size and location of Russia’s frozen assets, including the nearly USD 300 billion in Russian foreign currency reserves frozen in G7 and EU countries in the bloc.

But this option was rejected, not only by Hungary but by 12 other EU member states. At the same time, Portfolio reports that the Hungarian authorities’ lukewarm disclosure and action, along with that of other member states, might be what has caught the eye not only of Brussels but of some member states as well.

EU officials told Portfolio that similar situations reveal what appears to be weak management in some member states. Countries can see “exactly” when another is passive in certain cases.

“What is clear is that the Hungarian, Maltese or even Danish subsidiaries of a sanctioned individual’s Luxembourg company do not enforce asset freezing despite a clear link” – a source from Brussels told Portfolio.

Nudging countries to act

Hungary, Malta, and Greece reported just a couple of thousands of euros of frozen assets in the last months. There may be problems with data reporting, as every country said that they have frozen larger assets. But the fact remains that many countries have not begun to sanction private assets.

To make it easier for countries to find a legal basis to freeze assets connected to Russian people under sanctions and to enforce legally binding action from the so far reluctant EU member states, Anders Ahnlid Swedish diplomat told AFP that the EU would get “creative”.

According to Portfolio, this could mean a new EU procedure, that will validate enforcement obligations, with new penalties built into the system.

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Source: portfolio.hu, AFP

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