Hungary Fails in Lawsuit Over Use of Frozen Russian Assets for Ukraine

The European Court of Justice has dismissed Hungary’s lawsuit against the EU’s decision to use revenues from frozen Russian assets to fund military aid for Ukraine.JOIN US ON TELEGRAMFollow our coverage of the war on the @Kyivpost_official. Budapest argued that the procedure violated voting rules as well as the EU’s fundamental values and constitutional principles, including the rule of law, the equality of member states, and the democratic functioning of the bloc. The European Court of Justice, the highest instance of the EU’s two tribunals, determined that it does not have jurisdiction to rule on the matter. “Consequently, this action does not fall within the category of actions which fall within the exclusive jurisdiction of the Court of Justice and must therefore be examined by the General Court of the European Union”, the Court of Justice of the European Union wrote on its website. Hungary’s legal challenge is not over but merely delayed and transferred to a lower jurisdiction. While the General Court prepares to hear the case, the EU remains legally cleared to keep moving Russian asset profits to Ukraine’s military. The legal dispute stems from a previous EU Council decision. After freezing Russian funds in response to the invasion of Ukraine, the EU Council decided that the net profits arising from these immobilized assets would be directed toward supporting Ukraine’s budget through Extraordinary Revenue Acceleration (ERA) loan aid. As part of that original decision, the Peace Fund Committee was mandated to determine the specific allocation of the money on a regular basis. Other Topics of Interest Russia Launches First Commercial 5G Networks For First Time Since Nearly a Decade of Delays Nearly 10 million people could gain 5G access as Moscow moves to end years of delays tied to Western sanctions and equipment shortages. However, since Budapest had constructively abstained from the initial plan to use the frozen asset profits, the Peace Fund Committee ruled that Hungary could not participate in subsequent votes to allocate the funds – a procedure Budapest challenged as unlawful and which kickstarted the lawsuit. Hungary continues to block the opening of negotiation clusters for Ukraine’s accession to the EU. On Tuesday, Sept. 8, Budapest vetoed the opening of Clusters 2 and 3 for the fourth time. The total value of immobilized Russian sovereign assets worldwide stands at around €290 billion ($339 billion), with the bulk held in a small number of EU and G7 jurisdictions. Belgium accounts for the largest share, holding roughly €180 billion ($210.6 billion) in frozen Russian assets, primarily through the Brussels-based clearing house Euroclear, which acts as custodian for a large portion of Russia’s central bank reserves.