Hungary loses court fight over profits from frozen Russian assets

The European Union’s General Court has thrown out Hungary’s legal challenge against the bloc’s decision to channel profits from frozen Russian central bank assets toward Ukraine’s military support. The ruling, handed down on September 9, removes one of the legal obstacles to the EU’s strategy of turning Moscow’s own money against it.

Hungary had argued that its voting rights were violated when a European Peace Facility committee allocated the first tranche of extraordinary revenues from immobilized Russian assets to support Ukraine. The court didn’t even get to the merits of that argument, ruling instead that it simply lacked jurisdiction over matters falling under the EU’s Common Foreign and Security Policy.

What the court actually decided

The EU’s Common Foreign and Security Policy, known as CFSP, occupies a peculiar zone in European law. It’s one of the few areas where EU courts have traditionally declined to exercise judicial review, treating foreign policy and defense decisions as the domain of member states acting collectively rather than something judges should second-guess.

Hungary’s lawyers tried to argue around that limitation, framing the case as a procedural rights issue rather than a foreign policy dispute. By dismissing on jurisdictional grounds, the General Court effectively reaffirmed that CFSP decisions sit beyond the reach of judicial challenge.

The case originated from a June 2024 decision by the EPF committee, back when Viktor Orbán was still running things in Budapest. Orbán’s government had been the most vocal critic of EU military aid to Ukraine, frequently wielding its veto power to delay or water down collective action.

A Hungary that looks very different now

Péter Magyar, who replaced Orbán as Prime Minister, has systematically reversed his predecessor’s Russia-friendly posture. In June 2026, the new Hungarian government lifted its veto on EPF funding for Ukraine. Magyar’s administration also expelled Russian diplomats.

The EPF has been a central pillar of Europe’s Ukraine support architecture. Between 2022 and 2024, the facility mobilized approximately €6.1 billion for Ukraine, with total support figures cited across various EU mechanisms reaching as high as €12.8 billion.

The money pipeline from Moscow’s frozen billions

After Russia’s full-scale invasion of Ukraine in 2022, EU member states immobilized roughly €200 billion in Russian sovereign assets held at European financial institutions, primarily at Euroclear in Belgium. Rather than seizing the principal, the EU settled on capturing the windfall profits generated by those assets. Annual revenues from the immobilized funds are estimated at €3 to €5 billion, money that would otherwise flow back to Moscow.

The court’s refusal to engage with the substance of Hungary’s claims means that the legal architecture supporting these transfers remains untested on its merits. With Hungary’s veto lifted and the legal challenge dismissed, EU member states can now discuss additional distributions from the EPF.

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