Hungary asks for exemption from US sanctions for Russia's Gazprombank

The Hungarian government has requested that United States authorities exempt Russia's Gazprombank from sanctions to allow countries in the region to pay for their gas deliveries to the bank, Minister of Foreign Affairs and Trade Peter Szijjarto said in Brussels after a meeting of Nato foreign ministers on December 4.

Fielding questions, Szijjarto said that the United States' chief diplomat had signalled a willingness for some form of consultations with allies on the sanctions affecting Gazprombank.

Such an exemption would not be without precedent, he said, adding that the US has granted exemptions to Russian banks involved in uranium transactions.

Washington slapped sanctions on state-owned Gazprombank. The bank is involved in financing major infrastructure and energy projects and also plays a role in managing financial flows related to Russia's energy exports, as payments are processed through the company.

According to Szijjarto, the sanctions could cause serious difficulties for Hungary and two other Nato members, as well as for Serbia, as any stoppage in imports of Russian gas would threaten the security of their energy supplies. The countries affected suspiciously align with those whose governments that are sympathetic to President-elect Donald Trump, he noted.

Szijjarto said he had consulted on the matter by phone with the energy ministers of Serbia, Slovakia and Turkey, with whom coordinated steps would be taken.

Before the Nato foreign ministers meeting, Szijjarto, speaking in his annual commission hearing in parliament, argued that the sanctions affect gas procurement and transit as well as nuclear fuel supply and the expansion of the Paks nuclear project, with the potential to disrupt Hungary’s energy supplies.

While legal solutions were found for most areas, alternative proposals are still under review for others, he said, referring to recent talks with deputy-PM Alexandre Novak in Moscow.

During the commission hearing, an opposition MP highlighted that under the 2021 agreement, Hungary's Russian gas imports have nearly doubled to 23mcm per day in three years.

Szijjarto highlighted ongoing negotiations with Qatar regarding gas supplies post-2027 but said that current infrastructure limits LNG imports as a full substitute for Russian gas.

The delivery of LNG depends on the Southeast European gas pipeline network, which currently lacks sufficient capacity to entirely replace Russian gas, he added.

Szjjarto criticised the EU for declining financial support to develop alternative gas supply routes, as natural gas is being gradually phased out under EU energy goals.

The minister defended the expansion of Hungary’s nuclear capacity, citing growing electricity demand and environmental benefits. He highlighted that the project's contract has been amended six times, with each modification approved by the EU.