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U.S. sanctions Russian firms tied to Hungary’s Paks II nuclear plant—but spares the project

A high-stakes game of sanctions and exemptions unfolds as Hungary’s nuclear future hangs in the balance. Why is the U.S. drawing this fine line with Russia?

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1 min read
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In the image there is a book with army tank and jeeps on it, it seems like a war along with a text above it.

U.S. sanctions Russian firms tied to Hungary’s Paks II nuclear plant—but spares the project

The U.S. has imposed fresh sanctions on key Russian entities linked to Hungary’s Paks II nuclear power plant. While targeting Gazprombank and Rosatom executives, Washington has also lifted restrictions on the project itself. The move reflects a complex balance between pressure on Moscow and support for Hungary’s energy goals.

The Paks II plant represents Russia’s first nuclear venture in the EU. It involves two VVER-1200 Generation III+ reactors, designed to operate for 60 years. Hungarian regulators approved construction in August 2022, confirming the project met international safety standards.

The U.S. sanctions now affect Gazprombank, which processed payments between Hungary and Russia for oil, gas, and the plant’s construction. Additionally, executives from Rosatom—the state nuclear firm overseeing Paks II—face restrictions. Despite these measures, Washington has removed sanctions on the project itself, signalling support for Hungary’s push for energy independence.

Broader U.S. sanctions also target third-country banks facilitating transactions with key Russian financial institutions. While no specific list of affected banks was provided, the restrictions aim to limit financial flows tied to the Russian Central Bank, the National Wealth Fund, and the Ministry of Finance.

The sanctions on Gazprombank and Rosatom executives remain in place, but the Paks II project can proceed without direct U.S. restrictions. Hungary continues its work on the plant, which is set to play a long-term role in the country’s energy supply. The U.S. stance reflects both pressure on Russian entities and backing for Hungary’s infrastructure development.

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