The European Union has reached a deal with Hungary to renew sanctions on more than 2,400 primarily Russian entities and individuals hours before they were set to expire on March 15, an EU official with knowledge of the negotiations told the Kyiv independent.
The EU had been braced for a standoff over the issue, just the latest diplomatic tussle between the largely pro-Ukraine bloc, and its most pro-Kremlin member.
Hungarian Prime Minister Viktor Orban has repeatedly opposed military aid for Ukraine and warned that Ukraine's EU membership would "destroy" Hungary.
He has maintained ties with Russian President Vladimir Putin despite Russia's full-scale invasion, amplifying Kremlin narratives in Europe.
In exchange for Hungary lifting its veto, the EU on March 14 agreed to remove four individuals from the list, fewer than half the initial number demanded by Budapest.
"We know very well that our sanctions are working. They are biting and crippling the Russian economy," Anita Hipper, EU spokesperson for foreign affairs said following the renewal.
"And this is exactly the intended effect, because what we want to achieve with this is to ensure that Ukraine is strong and Russia doesn't have the money and the fuel to put in its war machine."
Who remains on the list?
The sanctions list, renewed for another six months, includes Putin, Foreign Minister Sergey Lavrov, former Ukrainian President Viktor Yanukovych, as well as members of the Russian State Duma and individuals responsible for sham elections and referenda in occupied Ukrainian territories.
Individuals involved in the kidnapping and forced adoption of Ukrainian children, the atrocities in Bucha and Mariupol, as well as high-ranking officials, military personnel and Wagner group commanders are also among the 2,400 individuals and entities on the list.
Hungary had demanded that five more individuals be removed from the list but folded on those demands following extensive negotiations with EU officials.
Mikhail Fridman
Oligarch Mikhail Fridman’s removal had been high on Hungary’s list of demands. Budapest’s Ambassador to the EU had explicitly stated that removing Fridman, one of Russia’s longest standing oligarchs, was a condition for lifting Hungary’s veto. Despite this, he remains sanctioned.
Fridman has "cultivated close ties with Putin," according to the French sanctions register, and "he is cited among Russia’s biggest financiers and as a facilitator in Putin’s inner circle."
Investigative reporters revealed in May 2023 that Alfa Insurance, a subsidiary of Alfa-Bank owned by Fridman and Petr Aven, provided insurance for vehicles used by Russian forces in Ukraine. The company has also reportedly serviced the Main Office of Special Programs, which is responsible for guarding Russian President Vladimir Putin.
Fridman also remains sanctioned by the U.S. and the U.K.
Fridman and Aven had previously sold their stakes in Alfa-Bank and its insurance division in an effort to overturn the sanctions, the Financial Times (FT) reported on Feb. 6.
Petr Aven
A close associate of Fridman, Petr Aven was also on Hungary’s wishlist.
Aven is accused by the UK, France and Switzerland of "destabilising or undermining or threatening the territorial integrity, sovereignty or independence of Ukraine."
According to the Swiss sanctions registry, Aven is "one of approximately 50 wealthy Russian businesspersons who regularly meet with Putin in the Kremlin."
He is accused of taking directives from Putin and implementing his foreign policy agenda.
"Aven and his business partner Mikhail Fridman have been engaged in the Kremlin’s efforts to lift the Western sanctions issued to counter Russian aggressive policy against Ukraine," it adds.
Like Fridman, he is also sanctioned by the U.S. and the U.K.
Alisher Usmanov
Hungary also wanted oligarch Alisher Usmanov to be delisted alongside his sister, Gulbakhor Ismailova, who was taken off the list.
The Russian-Uzbek businessman made his fortune in metal and mining operations after the fall of the Soviet Union.
Usmanov "is associated with individuals within the government of Russia who are involved in destabilising and threatening the territorial integrity, sovereignty and independence of Ukraine," according to the U.K.’s sanctions list.
France also says that Usmanov "provided active material or financial support to Russian decision-makers responsible for the annexation of Crimea and the destabilisation of Ukraine."
Usmanov also remains sanctioned by the U.S. and the U.K.
Dmitry Mazepin
Hungary also sided with Dmitry Mazepin, who EU judges described as "a member of the closest circle of President Putin."
He founded Uralchem Group, which is "one of the world's largest producers and exporters of nitrogen, potash and complex fertilizers," according to Forbes.
EU court documents state that "he is one of the leading businesspersons involved in economic sectors providing a substantial source of revenue to the Government of Russia."
Mazepin is also sanctioned by the U.K.
Musa Bazhaev
Finally, Hungarian officials went to bat for Musa Bazhaev. Sanctioned by the EU and the U.K, Bazhaev is among the top 200 richest people in Russia and through his business operations as head of the Alliance group is deemed to be "providing a substantial source of revenue" to the Russian government.
Bazhaev had challenged the EU’s sanctions against him but his case was rejected by the EU’s General Court.
Who has been taken off the list?
Mikhail Degtyaryov
Russia’s sport minister since May 2024, Degtyaryov will be delisted as part of the deal reached between Brussels and Budapest.
Degtaryov was involved in "the inauguration of the de facto embassy of the unrecognised so-called Donetsk People’s Republic in Moscow, and he contributes to undermining or threatening the territorial integrity, sovereignty and independence of Ukraine," according to the sanctions placed against him by Switzerland.
He remains sanctioned by the U.S. and the U.K.
Viatcheslav Moshe Kantor
An Israeli-British-Russian businessman, Kantor has been described by the French sanctions register as maintaining "close ties with Russian President Vladimir Putin" which have allowed him to "preserve his very large fortune."
As he conducts business in "economic sectors which provide a substantial source of revenue for the Russian government," he therefore contributes to "destabilizing" Ukraine.
Kantor remains sanctioned by the U.K.
Gulbakhor Ismailova
Ismailova, the sister of Russian oligarch Alisher Usmanov, will also be removed from the list at the behest of Hungary.
"She relies on a network of shell companies to hide the wealth of her brother," according to the Swiss sanctions register.
Usmanov, who remains on the EU sanctions list "provided active material or financial support to Russian decision-makers responsible for the annexation of Crimea and the destabilisation of Ukraine."
She remains sanctioned by the U.S. and U.K.
Separately to the negotiations with Hungary, Russian businessman Vladimir Rashevsky will be removed following his legal challenge against the sanctions being upheld by the European Court of Justice.
Three other individuals will be removed as they are now deceased.
What next?
Hungary withdrawing its veto means these sanctions will be renewed for another six months but another fight between Brussels and Budapest looms.
Economic sanctions against Russia, including the freezing of nearly $200 billion in Russian central bank assets, also need to be renewed by the EU in July.
As the U.S. signals an openness to easing sanctions against Russia, EU member states worry that Hungary could become emboldened in its dealings with Brussels and block the renewal of economic sanctions.
As the EU’s most pro-Kremlin member states continue to be a thorn in the bloc’s side, other member states are considering moving against Budapest.
If a majority of member states agree, Hungary could be stripped of its voting rights, and ability to veto, within the EU.
Such a move, though politically difficult, could indicate that EU member states have finally lost patience with Hungary.
Oleg Sukhov
