Hungary takes EU Council to court over use of frozen Russian assets

The Hungarian government is escalating its conflict with Kyiv and Brussels by filing a lawsuit at the EU Court of Justice challenging the decision to use of frozen Russian assets through the European Peace Facility (EPF) without Budapest’s approval.

The case, published on the Court’s website, was lodged in July against a decision of the Council of the EU concerning EPF adopted at the end of May, according to documents seen by EUalive.

Hungary is asking the Court to block the transfer of income generated from Russian assets to the EPF. Budapest recalls that it abstained from supporting the decision to use Russian funds for Ukraine’s needs and insists the Council’s decision should be declared invalid.

The EU has decided to transfer almost all revenues from taxing profits on frozen Russian assets to the EPF, a fund from which member states are reimbursed for the costs of military aid to Ukraine. Budapest argues that its abstention in the Council did not amount to consent for providing such support through the facility.

The Council’s decision grants Ukraine 99.7% of interest payments from frozen Russian assets, amounting to roughly €3-5 billion annually.

Hungary is widely regarded as the EU’s most Kremlin-friendly government and has repeatedly obstructed military assistance to Ukraine, sanctions against Russia, and Kyiv’s accession talks.

Western countries immobilised roughly $300 billion in Russian sovereign assets at the outbreak of the full-scale war, with around two-thirds held in the EU.

In the lawsuit, initially brought before the EU Court of Justice and later referred to the General Court, Budapest seeks to “annul the decision… regarding the allocation of the amounts to assistance measures for the supply of military support to the Ukrainian Armed Forces” and “order the defendants to pay the costs.”

It may take years for the Court to issue a ruling, while EU funding could also continue under the Ukraine Facility instrument. In June 2024, Hungary filed a similar lawsuit challenging an EPF decision to support Ukraine, which is still being heard.

Since Russia’s full-scale invasion in 2022, the EU and its member states have provided over $150 billion in financial, military, and humanitarian support to Ukraine, including $12.8 billion via the EPF.

Additionally, the EU Commission proposed in September 2024 to lend Ukraine up to 35 billion euros as part of a loan package organised by the Group of Seven major industrial nations, as it seeks to help the country rebuild its economy and its war-shattered power grid.

The court case comes against the backdrop of mounting tensions between Kyiv and Budapest. The two governments have exchanged sharp rhetoric after Ukrainian drones repeatedly struck the Russian Druzhba pipeline, which supplies oil to Hungary and Slovakia.

During the summer of 2025, Ukraine intensified drone and missile attacks on the Druzhba (“Friendship”) oil pipeline, one of the last remaining energy arteries linking Russia with Central Europe. The strikes targeted pumping stations and storage facilities in western Russia, temporarily disrupting flows to Hungary and Slovakia.

Kyiv framed the attacks as part of its strategy to undermine Moscow’s oil revenues, which continue to fund the Kremlin’s war effort.

Hungary, however, voiced alarm over the strikes, warning that they threatened its energy security and calling Brussels to intervene in its favour and against Ukraine. The incidents further strained relations between Budapest and Kyiv, deepening the political rift over EU support for Ukraine and the use of frozen Russian assets.