US grants Hungary and Turkey exception to sanctions for Russian Gazprombank gas payments

The United States has granted an exception to the sanctions imposed on Gazprombank for Hungary and Turkey to pay for Russian gas. This was reported by Hungarian Foreign Minister Péter Szijjártó, according to Reuters.

“Today they made an exception for gas payments related to Gazprombank, which is good news. But we have developed a solution together with our regional allies—an alternative payment method that does not violate the sanctions but allows us to make payments for gas,” Szijjarto said.

According to the Hungarian minister, the latest sanctions against Russia could negatively affect some US allies.

Turkish Energy Minister Alparslan Bayraktar said that Turkey has also agreed to exempt its payments for Russian gas from the sanctions imposed by the US against Gazprombank.

The EU is pressuring the US to explore ways to ease US sanctions against Russia’s Gazprombank, a financial institution that is key to ensuring the supply of Russian natural gas to the EU countries.

Kremlin leader Putin has signed a decree that means that payments for Russian gas are no longer tied to one particular bank, Gazprombank.

European countries that are still buying Russian gas are trying to find a way to pay for supplies after December 20 without violating new US sanctions.

Turkey is negotiating with the US to ease the sanctions regime, which will allow the country to continue using Russia’s Gazprombank to pay for Russian natural gas imports.

The United States imposed sanctions on Gazprombank, one of the few major Russian lenders not yet blacklisted, to limit the Kremlin’s ability to finance its military efforts and to support its war of aggression against Ukraine.

The new US sanctions list included state-owned Gazprombank, the main conduit for Russian energy payments, and its six international subsidiaries from the global financial system.

According to the United States, Russia used Gazprombank as a conduit for the purchase of military equipment for the war in Ukraine, as well as for payments to soldiers and compensation to the families of those killed in the fighting.

The United Kingdom and Canada imposed sanctions on Gazprombank in the first weeks of the war in 2022.

Previously, the United States avoided following suit, mainly so that European countries could continue to pay for Russian gas supplies.

The US sanctions will close one of the few remaining windows in Russia for international banking transactions by prohibiting Gazprombank from conducting dollar transactions.