Just three weeks after the Supreme Court handed President Donald Trump a stinging defeat over the sweeping tariffs he imposed last year, the legal battle over his first move to replace those import taxes is heating up. Democratic attorneys general and governors from 24 states and a libertarian group representing two small businesses filed their first legal briefs Friday asking a federal trade court to strike down the 10 percent tariffs Trump imposed on most U.S. trading partners in February. Trump promised to hike those tariffs to 15 percent, but hasn’t yet done so. Legal experts told POLITICO that Trump’s backup tariffs are probably on stronger legal footing than the “Liberation Day” taxes the high court struck down. Despite that, his challengers are exuding bravado about their chances. “We are 100 percent confident that we will be successful in the Court of International Trade,” New York Attorney General Letitia James told reporters last week. Trump is also projecting confidence, repeatedly claiming that the same Supreme Court went ahead and blessed his use of other authorities, like the so-called Section 122 tariffs he’s turned to as a short-term fix. That is not true. While the three justices who dissented from last month’s decision did cite Section 122 as one of the tools Trump could use to rebuild his tariff scheme, the court’s six-justice majority explicitly declined to embrace that position. “We do not speculate on hypothetical cases not before us,” Chief Justice John Roberts wrote. While Trump called his new approach “time tested,” that authority has never been invoked before and the high court has not given its blessing to Trump using that specific law in the current circumstances. Here’s a look at the key issues in the legal fight over Trump’s replacement tariffs: A NEW RATIONALE The Supreme Court resolved the earlier Trump tariff case by finding that the statute Trump invoked, the International Economic Emergency Powers Act, conferred no power on any president to impose tariffs. With that off the table, the court did not have to examine whether the global emergency Trump asserted existed. The new challenges could face a bigger hurdle because their arguments will require judges to second guess Trump’s conclusion that the U.S. faces a “large and serious balance-of-payments deficit.” “The bottom line here is: How much deference does the president get in determining … this sort of predicate condition — that there’s a large and serious payments problem?” said Matthew Seligman, a lawyer representing importers seeking refunds of the previous tariffs. “How much deference does the president get in his determination in deciding how large is large and how serious is serious?” “I think [it] will probably be the court’s instinct to defer to the president’s determination that, whatever it is ‘balance of payments’ means, that the requisite facts on the ground exist,” Duke University law professor Timothy Meyer said. DEFINING ‘BALANCE OF PAYMENTS’ The text of the law Trump invoked for his latest round of tariffs, Section 122 of the Trade Act of 1974, makes eight references to “balance of payments” issues. Yet, it offers no definition of the term. Some experts contend the phrase refers to a specific problem the U.S. faced in the years leading up to the law’s enactment, involving the U.S. government buying or selling foreign currency to adjust or maintain exchange rates. “A balance of payments deficit is a term of art incorporating into law a settled meaning from international financial accounting,” the blue states’ lawsuit says. “A trade deficit does not qualify, either as a matter of economics or of law, as a balance of payments deficit.” “The president has tried to pull a fast one by switching the term balance of payments to mean balance of trade, in other words, a trade deficit. But those two things aren’t the same thing,” said Jeffrey Schwab of the Liberty Justice Center. However, other experts say the lack of a definition may indicate that different lawmakers had different views of what “balance of payments” meant and what problem they were trying to fix. “They had a broader set of problems in mind … .They weren’t seemingly talking about just official payments,” said Brad Setser, a Treasury Department official under President Barack Obama and an adviser to the U.S. Trade Representative under President Joe Biden. One awkward aspect for the White House: during the pitched battle over the “Liberation Day” tariffs, the administration’s lawyers suggested that Section 122 wasn’t a viable option to address the trade deficit. “Trade deficits … are conceptually distinct from balance-of-payments deficits,” Justice Department attorneys told the Court of Appeals for the Federal Circuit last June. TRUMP’S CARVE-OUTS The law Trump invoked for the replacement tariffs says they should be “of broad and uniform application,” but the president’s approach seems far from that standard. Attached to the proclamation he issued are 88 pages of exemptions and exceptions. The fine print waives the new tariffs for Mexico and Canada and some goods coming from Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, or Nicaragua. Trump also carved out a slew of product categories where consumers regularly complain about higher prices, including many foods, cars and prescription drugs. “The exemptions and exceptions the President has made are in direct violation of the text of Section 122, which requires generally uniform treatment the President is declining to observe,” Liberty Justice Center argues in the lawsuit filed on behalf of two importers, Burlap and Barrel and Basic Fun! But the law does contain wiggle room to exclude some products or single out countries in some circumstances. Trump’s proclamation seeks to invoke those exceptions, although many dispute whether his assertions about the current state of global trade and “the needs of the United States economy” are actually true or are just parroting the language in the statute. It’s unclear whether judges will accept Trump’s claims at face value and whether they have time to dig into such factual disputes on the accelerated timetable the challengers have demanded. Another uncertainty is whether a court that strikes down the carve-outs would throw out the tariffs altogether or do what Trump’s proclamation urges in such a scenario: wipe out the exemption and keep the broader tariffs. CAN THE COURTS BEAT THE CLOCK? The law Trump used to deploy the new tariffs limits his move to 150 days, roughly five months. While that may weaken Trump’s hand in negotiations with trading partners and force him to look to other tools to sustain his tariff policies, the short fuse means that the courts are unlikely to deliver a final verdict on the legality of the president’s action before it expires on July 24. In the challenges to Trump’s earlier tariffs, lower courts ruled against the policies but allowed the administration to keep collecting the duties while the fight played out. If the pattern holds, it could take months for the lower courts to consider the issues and a year or more if the Supreme Court decides to weigh in. To actually halt the tariffs, opponents will likely have to persuade the trade court or the Federal Circuit to refuse to issue the stays that the White House won the last time around. The Court of International Trade has set arguments on the pending suits, including a request for a preliminary injunction, for April 10. But some expect these cases to take longer to decide than the last time. “I would expect, at every level, that the time to write an opinion would be longer than it was in the IEEPA case because the issues are just more complicated,” Meyer said. WOULD TRUMP DOUBLE DIP? Some trade experts have speculated that, if the courts don’t stop the new tariffs by the time they are set to expire in July, Trump could attempt to re-issue them for another 150 days, perhaps with a few tweaks to make them a bit different than during the first phase. The statute doesn’t directly prohibit re-upping, but does say it’s up to Congress to extend such tariffs beyond the 150-day period. “It’s arguably a little ambiguous, if he wanted to re-declare a balance of payments emergency right after,” said Stanford Law Professor Alan Sykes. “Certainly the statutory language, to me, implies that the Congress did not want to leave that loophole in place. If I were the judge, I would say that that’s not permissible.”

BRUSSELS — EU countries on Saturday struck a deal to ensure the bloc’s entire framework of sanctions against Russian businesses and oligarchs don’t expire over the weekend, which would have led to restrictions on thousands of companies and individuals being abruptly relaxed. According to four diplomats, granted anonymity to comment on the closed-door talks, the rollover was agreed on unanimously after two names were removed from the list of sanctioned people. “In the context of the sanctions’ review, the Council also decided not to renew the listings of two individuals and to remove five deceased persons from the list,” the European Council later confirmed in a statement. The EU’s sanctions list must be renewed twice a year with unanimous support from all 27 member states. More than 2,600 people and entities have been sanctioned. The names that were removed were not disclosed. Slovakia had called for the removal of prominent tycoons Alisher Usmanov and Mikhail Fridman from the list. However, two of the diplomats said, neither was among those de-listed. Envoys had been unable to secure an agreement during all-day talks on Friday, launching a written procedure on Saturday to finalize the terms of the rollover. Capitals are hoping for a breakthrough on the EU’s forthcoming package of new sanctions — which will be the 20th to be imposed on Moscow since the start of its full-scale invasion of Ukraine — when the bloc’s leaders meet in Brussels for a summit on Thursday. Hungary has so far refused to sign off the latest round of additional restrictions, and is holding up the payment of a €90 billion loan to ensure Ukraine can continue to fund its defense and pay for essential services.

WARSAW — President Karol Nawrocki said Thursday evening he intends to veto government legislation that lays out the how Poland should spend its €43.7 billion allocation under the EU’s loans-for-weapons scheme known as SAFE. Prime Minister Donald Tusk’s government lacks the necessary votes in the country’s parliament to override the veto. The standoff will inevitably escalate the political feud between Tusk and the president over Poland’s political orientation. Nawrocki, like the nationalist-populist opposition Law and Justice (PiS) party that supports him, views Brussels with skepticism, unlike the pro-EU Tusk administration. Poland is the only country where SAFE has become a political issue. European Commission President Ursula von der Leyen said in December that EU countries had already gobbled up the whole €150 billion from SAFE and were clamoring for more. “The President has lost the chance to act like a patriot. Shame!” Tusk posted on X shortly after Nawrocki announced his decision. The PM said the government will convene for an extraordinary session Friday morning to prepare a response. GOVERNMENT ALLEGES “NATIONAL TREASON” The EU program provides low-interest, long-term loans with a 10-year grace period for principal repayments. The funds are raised by Brussels on capital markets and offer significant savings compared to national borrowing — a crucial issue for Poland, which plans to devote 4.8 percent of its GDP to defense this year. Following Nawrocki’s veto decision, Poland’s SAFE allocation will remain guaranteed, but the rules for spending it will likely be less flexible than they would have been under the legislation Nawrocki blocked. The government had planned to use the money to boost financing for the Border Guard and the police or to upgrade infrastructure. Foreign Minister Radosław Sikorski said before the decision: “If the President vetoes SAFE and we still implement it … I will propose that a plaque with the inscription be placed on every rifle, tank, gun, drone, and anti-drone: ‘Dear soldier of the Polish Army, [President] Nawrocki did not want to give you this.’” Key figures in the Tusk government hammered Nawrocki in the media and online following the decision, calling it “national treason.” The veto also defies the military, whose top brass have spoken out in favor of the SAFE loans. Chief of the General Staff Wiesław Kukuła in February described SAFE as a “game changer” for the military. PRESIDENT RAISES SPECTER OF “MASSIVE FOREIGN LOANS” In his speech, Nawrocki reiterated the arguments he has been rolling out against SAFE for weeks now, claiming the Security Action for Europe loans would saddle Poland with long-term debt and expose the country to exchange-rate risks.  “The SAFE mechanism is a massive foreign loan taken out for 45 years in a foreign currency, with interest costs that could reach as much as PLN180 billion [€42 billion]. Poland would therefore have to repay an amount roughly equal to the value of the loan itself in interest, with Western banks and financial institutions standing to profit from it,” Nawrocki said. The president also argued the scheme could allow Brussels to attach political conditions to Poland’s defense financing and would benefit foreign arms-makers disproportionately.  “SAFE is a mechanism under which Brussels, through the so-called conditionality principle, could arbitrarily suspend financing while Poland would still have to continue repaying the debt. That’s why it must be said clearly: Security subject to conditions is not security. Poland’s security cannot depend on decisions taken elsewhere,” Nawrocki declared. “I have decided that I will not sign the law that would allow Poland to take out a SAFE loan. I will never sign legislation that strikes at our sovereignty, independence, and economic and military security.” Instead, Nawrocki renewed his proposal for a domestic alternative to SAFE that would mobilize money to finance arms purchases without loans or interest payments — by involving the National Bank of Poland’s vast gold reserves. With 550 tons of gold stored in domestic and foreign vaults, the NBP is one of Europe’s top gold hoarders. Central bank chief Adam Glapiński said last week that the NBP holds around 197 billion złoty in “unrealized gains resulting from the increase in the value of the bank’s gold reserves,” and is considering using part of that to support defense spending. The operations would involve transferring the profits generated by the NBP to a dedicated vehicle, the Polish Defense Investment Fund. Glapiński also said the gains would be realized by transactions reducing the share of gold in the bank’s portfolio. 2027 ELECTIONS ON HORIZON Tusk and his ministers have lambasted the gold idea as highly speculative and said it was inconsistent with the central bank’s role as the guardian of Poland’s financial stability. The government has also said that nearly all of Poland’s SAFE money will go to domestic manufacturers, creating jobs and stimulating economic growth. The clash over SAFE comes as Poland prepares for a parliamentary election next year in which PiS hopes to defeat Tusk’s pro-EU coalition. Polls suggest that Tusk’s party, the liberal Civic Coalition, might come first but could lack the votes to form a majority.  The PiS, meanwhile, could secure a majority if it allies with the far-right Confederation party and with the even-more-extreme, antisemitic Confederation of the Polish Crown.

LONDON — Keir Starmer is so often portrayed as a process-obsessed lawyer that a colleague once called him “Mr. Rules.” But Wednesday’s documents release about the prime minister’s appointment of Peter Mandelson — a friend of the late convicted sex offender Jeffrey Epstein — to be Britain’s ambassador to Washington provides more evidence of the raw politics that greased the wheels of Downing Street. There is no “smoking gun” that showed Starmer knew everything about the Mandelson-Epstein relationship. That’s because he didn’t, and one was never expected. The question from the PM’s critics has always been whether he should have taken a different course, given what he did know. That means the most difficult revelation for Starmer is that a top Foreign Office official and his most senior foreign policy aide, national security adviser Jonathan Powell, both had concerns about the appointment — even as the PM’s chief of staff, Morgan McSweeney, pushed to get it over the line. In other words: The process was there, but the final call was political — and rested on the PM’s personal judgement. ‘REPUTATIONAL RISK’ Starmer decided to sack Mandelson last September after new revelations about his close historic friendship with Epstein. Mandelson has apologized “unequivocally” for his association with Epstein and “to the women and girls that suffered.” The prime minister said at that time — and often repeats now — that the “depth and extent” of the relationship clearly went further than he had known when he appointed Mandelson. This is true, but the new files show red flags were there nonetheless.  The 147-page cache published by the U.K. government shows Starmer was warned that Mandelson’s friendship with Epstein was a “reputational risk.” A note to the prime minister from Dec. 11, 2024 provides the receipts for what Starmer recently admitted — that he was warned about reports that Mandelson had stayed in Epstein’s home after his 2008 conviction for soliciting prostitution from a minor. Aides also flagged to Starmer the fact — which was not public at the time — that Mandelson brokered a meeting between his friend Epstein and former PM Tony Blair in 2002 to talk about “economic and monetary trends.” Separately, Starmer’s national security adviser Powell raised concerns, albeit they only appear in the files after Mandelson’s sacking. The 147-page cache published by the U.K. government shows Starmer was warned that Mandelson’s friendship with Epstein was a “reputational risk.” | Lucy North/PA Images via Getty Images Powell’s misgivings are revealed in notes of a “fact-finding” call between Powell and the PM’s General Counsel Mike Ostheimer, the evening after Starmer sacked Mandelson last September. The notes show Powell — who had worked for years with Mandelson in Tony Blair’s Downing Street — raised concerns about Mandelson’s reputation directly with McSweeney.  Powell told Ostheimer he had found the process “unusual” and “weirdly rushed” — and that the most senior civil servant in the Foreign, Commonwealth and Development Office, Philip Barton, also “had reservations around the appointment.” But Mandelson got the job anyway, and arrangements were made in haste ahead of Donald Trump’s January 2025 inauguration as U.S. president. Mandelson was handed his IT equipment and first set of “official sensitive” level files on Boxing Day. Two previous shortlists in 2024 — one compiled by Starmer’s predecessor as PM Rishi Sunak, and a second by McSweeney’s predecessor as chief of staff Sue Gray — had been torn up before Mandelson strode forward. Starmer made his decision less than a week after receiving the due diligence report. ‘MORGAN’S FINGERPRINTS ARE ALL OVER THIS’ Wednesday’s document dump shows the political relationships that lay behind this process. Two names crop up repeatedly in the files; those of McSweeney and Starmer’s then-Director of Communications Matthew Doyle, who were both political special advisers in No. 10 and personal friends of Mandelson. The documents show that McSweeney and Mandelson spoke to each other repeatedly. At one point on Dec. 20, 2024, shortly after Starmer approved the appointment, it was McSweeney who contacted Mandelson personally to flag the need for him to fill out conflict of interest forms.  When the Epstein friendship was flagged in due diligence, McSweeney had a “back and forth” with Doyle, the former communications chief told Ostheimer in a separate fact-finding call. This back-and-forth resulted in McSweeney asking Mandelson three questions about his links with Epstein.  After this, Doyle was “satisfied” with Mandelson’s responses about his contact with Epstein, according to the note to Starmer on Dec. 11, 2024. Doyle, whom Starmer elevated to the House of Lords, had the Labour whip suspended in February after it emerged he had campaigned for a friend who had been convicted of child sex offenses. (Doyle has previously apologized for this “clear error of judgment.”) The government has yet to publish extensive WhatsApp and email communications between Mandelson and Starmer’s ministers and aides. | Richard Baker / In Pictures via Getty Images One senior Labour MP, who was granted anonymity to speak frankly, said: “Matthew Doyle’s understanding of what is appropriate contact with a pedophile is somewhat questionable.”  Crucially, Mandelson’s answers to McSweeney’s three questions have not yet been published. The email chain has been held back at the request of the Metropolitan Police, which is midway through a separate investigation into Mandelson. When this email chain is eventually published, No. 10 aides believe it will support Starmer’s case that Mandelson “lied” to Downing Street about his relationship with Epstein. Mandelson’s lawyers did not respond to a request for comment after the documents were released Wednesday. AN OUTRAGEOUS FORTUNE There are other elements of the new files that will reassure Starmer’s restive MPs. The most obvious is that McSweeney and Doyle have both already left No. 10. The senior Labour MP quoted above said: “It’s a good thing Morgan’s gone because his fingerprints are all over this. How could he possibly have stayed?” A second Labour MP said it was a relief that McSweeney had left. “He was working against the prime minister’s best interests,” they said. The other factor cheering Labour MPs is what the files say about Mandelson in his own words, fueling his new-found status as a Labour hate figure. The files show Mandelson asked for a £547,201 severance payment after his sacking (he got £75,000), and told the FCDO’s Chief People Officer Mark Power in September that his “chief concern” was arriving back with “maximum dignity and minimum media intrusion.” “[Labour MPs] are more preoccupied with the £500,000,” said a third Labour MP loyal to Starmer. “What kind of person asks for that?” But this is only one step on the road for Starmer’s No. 10, and for possible questions about the prime minister’s judgement. The government has yet to publish extensive WhatsApp and email communications between Mandelson and Starmer’s ministers and aides, not just about his appointment and dismissal but about broader politics, relationships and strategy. Downing Street also announced on Wednesday that it will review the separate national security vetting system. | Paul Ellis/AFP via Getty Images Wednesday’s files show the concern that the breadth of this planned publication — forced in a vote by the opposition Conservative Party — sparked in No. 10. As Starmer prepared to agree to the transparency earlier this year, his private secretary for foreign affairs, Ailsa Terry, told a fellow official there should be a “welfare check” on Mandelson every day. Downing Street also announced on Wednesday that it will review the separate national security vetting system — details of which have not been published in Mandelson’s case — to learn lessons from the former ambassador’s developed vetting. ALL FOR WHAT? The great irony is that Starmer might have avoided all this pain by listening to officialdom. Wednesday’s document release confirmed that two unnamed government officials were found “appointable” for the ambassador job following a recruitment process in April 2024, under Starmer’s predecessor Sunak. Two people with knowledge of the process told POLITICO that the lead candidate was the then-No. 10 national security adviser Tim Barrow, as widely reported at the time. And the runner-up? Christian Turner, the two people said. It is Turner to whom Starmer has now turned for a steadier pair of hands in Washington. Critics might wonder why he didn’t appoint him in the first place. Mason Boycott-Owen contributed to this report.

LONDON — The U.K government has published the first tranche of its long-awaited files relating to the appointment of former U.S. ambassador Peter Mandelson following the revelations about his association with the financier and sex offender Jeffrey Epstein. Mandelson was sacked as Britain’s top Washington diplomat in September last year, with further revelations prompting a police investigation into his conduct which led to his arrest last month. He has not been charged, and his lawyers have said he is cooperating with the investigation and his overriding priority is to clear his name. He has previously apologized “unequivocally” for his association with Epstein and “to the women and girls that suffered.” The files shed new light on how Mandelson was appointed to the role. POLITICO last month revealed serious concerns from current and former security officials about the process which appointed him. Here is what POLITICO has found in the files — so far. MANDELSON WANTED A PAYOUT OF MORE THAN £500K WHEN HE WAS SACKED Mandelson asked for a severance payment of more than £500,000 when he was sacked as Britain’s ambassador to Washington last September — he got £75,000. Internal Foreign Office emails show the ex-ambassador got £40,330 “in lieu of three months’ notice” — and a special severance payment of £34,670. He asked for a payout of the remainder of his full salary — £161,318 a year over the four-year term — which “would have amounted to £547,201.” Top Foreign Office official Olly Robbins described the final payout as “good value for money” in a message to Chief Secretary to the Treasury James Murray in October. STARMER’S COMMS CHIEF WAS ‘SATISFIED’ OVER EPSTEIN LINKS Keir Starmer’s former Director of Communications Matthew Doyle was said to be “satisfied” with Peter Mandelson’s responses when questioned about his contact with Jeffrey Epstein, the documents suggest. In a note sent to the prime minister on Dec. 11 2024, which included a copy of the due diligence review into Mandelson’s background, Keir Starmer was told his chief of staff Morgan McSweeney had also “discussed Peter’s relationship with Jeffery [sic] Epstein.” The note added: “But your Director of Communications is satisfied with his responses to questions about contact.” JONATHAN POWELL SAYS HE RAISED THE ALARM OVER THE ‘UNUSUAL’ APPOINTMENT PROCESS Starmer’s National Security Adviser Jonathan Powell claimed to have raised concerns about Mandelson directly with Starmer’s ex-chief of staff McSweeney — but was told they had been addressed. A freshly published document appears to show details of a fact-finding call between Keir Starmer’s General Counsel Mike Ostheimer and Powell about the appointment process which took place the day after Mandelson’s sacking. A summary of the discussion says that Powell, a veteran government adviser, found the process “unusual” and “weird rushed.” According to the document, Powell disclosed that he had raised concerns directly with the prime minister’s then-chief of staff McSweeney about the “individual and reputation,” but was told those issues had been “addressed.” This is a developing story and will be updated.

BRUSSELS — The right to use Swiss franc banknotes and coins will be enshrined in Switzerland’s constitution after voters on Sunday backed a measure designed to safeguard the use of cash in society. Preliminary official estimates revealed 69 percent of voters backed the legal amendment, which the government proposed as a counter to a similar initiative by a group called the Swiss Freedom Movement. The Swiss Freedom Movement triggered the national referendum after its initiative to protect cash collected more than 100,000 signatures, triggering a national referendum. Its initiative secured only 46 percent of the final vote after the government said some of the group’s proposed amendments went too far. The vote means Switzerland will join the likes of Hungary, Slovakia and Slovenia, which have already written the right to cold, hard cash in their constitutions. Austrian politicians are also debating whether to follow suit, as people’s payment habits become increasingly digital — especially since the pandemic. The trend has fanned Big Brother conspiracy theories that governments aim to control populations by withdrawing cash altogether. The European Central Bank’s plans to issue a virtual extension of the euro have fanned those fears, prompting the EU’s executive arm to propose a bill that will cement physical cash in societies across the bloc. Switzerland, too, has seen a drop in cash payments over the past decade. More than seven out of 10 payments at the till were in cash in 2017. In 2024, cash only featured in 30 percent of in-shop transactions, according to data from the Swiss National Bank. The Swiss Freedom Movement has previously pursued campaigns to sack unpopular government ministers, ban electronic voting, and protect citizens from professional or social retribution if they refuse to be vaccinated against Covid-19 — none of which made it to the ballot box.

Scattered among the candy shelves and freezer cabinets in Russian supermarkets across Germany are advertisements promoting a business with a service the government has tried to outlaw: a logistics company specialized in moving packages from the heart of Germany to Russia, in defiance of European Union sanctions. Trade restrictions have been in place since 2014 and were tightened just after the 2022 invasion of Ukraine, when Western nations began to impose far-reaching financial and trade sanctions on Russia. But an investigation by the Axel Springer Global Reporters Network, which includes POLITICO, has identified a clandestine Berlin-based postal system that exploits the special status of postal parcels to transport all kinds of European goods — including banned electronics components — into President Vladimir Putin’s empire. We know every stop and turn in the route because we sent five packages and used digital tracking devices to follow them — through an illicit 1,100-mile journey that undermines the sanctions regime European policymakers consider their strongest tool to generate political pressure on Russian leaders by weakening their country’s economy. LS Logistics said its internal controls make violations of EU sanctions “virtually impossible” but that it was not immune from customers making fraudulent declarations about the goods they ship. “Sanctions enforcement is whack-a-mole,” said David Goldwyn, who worked on sanctions policy as U.S. State Department coordinator for international energy affairs and now chairs the Atlantic Council Global Energy Center’s energy advisory group. “It’s a hard process, and you have to constantly be adapting to how the evaders are adapting.” THE UZBEK LABEL In late December, we packed five square brown parcels with electronic components specifically banned under EU sanctions and addressed the parcels to locations in Moscow and St. Petersburg. When we brought our parcels to the counters of Russian supermarkets in Berlin, we told salespeople the packages included books, scarves and hats. But they never checked inside the packages, which in fact held banned electronic components we rendered unusable before packing. Salespeople charged us 13 euros per kilogram, about $7 per pound, refusing to provide receipts. What makes these cardboard packages even more special is their disguise: The employee does not affix Russian postal stickers to the boxes, but rather those of UzPost, the national postal service of Uzbekistan. The former Soviet republic is not subject to EU sanctions. UzPost maintains close ties to the Russian postal service, according to a person familiar with the entities’ history of cooperation granted anonymity to discuss confidential business practices. Tatyana Kim, the CEO of Russian ecommerce marketplace Wildberries and reputedly her country’s richest woman, recently acquired a large stake in UzPost, according to media reports. “We work with partners, including private postal service providers,” the Uzbek postal service stated in response to our inquiry. “They can use our solutions for deliveries.” In Germany, registered logistics companies are permitted to provide postal services — including pick-up, sorting and delivery — for international postal operators. However, the Federal Network Agency, which is responsible for postal oversight, says the Uzbek postal service is not authorized to perform any of these functions in Germany. (The Federal Network Agency said in a response to our inquiry that it is “currently reviewing” the case and that it would pursue penalties for LS if it is found to be using Uzbek documents without authorization.) After our packages spent one to two days at the supermarkets, we saw them begin to move. Inside each package we had placed a small black GPS device, naming them “Alpha,” “Beta,” “Gamma,” “Delta” and “Epsi.” We could track their movements in real time in an app, watching them closely as they wound through Berlin’s roads to Schönefeld, site of the capital’s international airport. There they stopped, unloaded into a modern warehouse that has been repurposed into a Russian shadow postal service. COLOGNE, TECHNICALLY In 2014, a retired professional gymnast was tasked with launching a subsidiary of Russia’s national postal service, the RusPost GmbH, which would operate with official authorization to collect, process and deliver postal items in Germany, according to a former employee granted anonymity to speak openly about the business. For 18 years, the St. Petersburg-raised Alexey Grigoryev had competed and coached at Germany’s highest levels, winning three national championship titles with the KTV Straubenhardt team and working with an Olympic gold medalist on the high bar. But he had no evident experience in the postal business. RusPost’s German business model collapsed upon the imposition of an expanded sanctions package in the weeks after Russia’s invasion of Ukraine in February 2022. Much like American sanctions on Russia, the European Union blocks sensitive technical materials that could boost the Russian defense sector, while allowing the export of personal effects and quotidian consumer items. “The sanctions are accompanied by far-reaching export bans, particularly on goods relevant to the war, in order to put pressure on the Russian war economy,” according to a statement the Federal Ministry of Economics provided us. In March 2022, while conducting random checks of postal traffic to Moscow, customs officials discovered sanctioned goods (including cash, jewelry and electrical appliances) in numerous RusPost packages. The Berlin public prosecutor’s office launched an investigation of the company, concluding that a former RusPost managing director had deliberately failed to set up effective control mechanisms, in breach of his duties. He was charged with 62 counts of attempting to violate the Foreign Trade and Payments Act over an eight-month period; criminal proceedings are ongoing. The Russian postal network did not quite disappear, however. A new company called LS Logistics Solution GmbH was formed in December 2022, according to corporate filings. LS filled its top jobs, including customs manager and head of customer service, with former RusPost employees, according to their LinkedIn profiles. The new company listed as its business address an inconspicuous semi-detached house in a residential area of Cologne, across from a church. When we visited, we found an old white mailbox whose plated sign lists LS Logistics alongside dozens of other companies supposed to be housed there. But none of them seemed to be active. The building was empty during business hours, its mailbox overflowing with discolored brochures and old newspapers. The operational heart of LS is the warehouse complex in Berlin-Schönefeld, just a few minutes from the capital’s airport. The building itself is functional and anonymous: a long, gray industrial structure with several metal rolling doors, some fitted with narrow window slits. Through them, towering stacks of parcels are visible, packed tightly, sorted roughly, stretching deep into the hall. Trucks arrive and depart regularly, from loading bays lit by harsh white floodlights that cut through the otherwise quiet industrial area. Behind the warehouse lies a wide concrete parking lot where a black BMW SUV with a license plate bearing the initials AG is often parked. We saw a man resembling Grigoryev enter the car. The former head of RusPost officially withdrew from the postal business after authorities froze the company’s operations. Unofficially, however, the 50-year-old’s continued presence in Schönefeld suggests otherwise. According to one former RusPost employee, the warehouse near the airport serves as a collection point for parcels from all over Europe. Other logistics companies with Russian management have listed the warehouse as their business address, some of their logos decorating the façade. LS Logistics Solution GmbH has the largest sign of them all. THE A2 GETAWAY According to tracking devices, our packages spent several days in the warehouse before being loaded onto 40-ton trucks covered with grey tarps, among several that leave every day loaded with mail. They were then driven toward the Polish border, through the German city of Frankfurt (Oder). Without any long stops, the 40-ton trucks traversed Poland on the A2 motorway, past Warsaw. Two days after leaving Berlin, they were approaching the eastern edge of the European Union. They arrived at a border checkpoint in Brest, the Belarusian city where more than a hundred years ago Russia signed a peace pact with Germany to withdraw from World War I. Now it marked the last place for European officials to identify contraband leaving for countries they consider adversaries. In 2022, the European Union applied a separate set of sanctions on Belarus because its leader, Alexander Lukashenko, a close ally of Putin, has supported Russia’s presence in Ukraine. Yet despite provisions that should have stopped our packages from leaving Poland, they moved onward into Belarus, their tracking devices apparently undetected. What makes this possible is the special legal status that accompanies international mail. While a formal export declaration is required for the export of regular goods, such as those moving via container ship or rail freight, simplified paperwork helps speed up the departure process for postal items. At Europe’s borders, this distinction becomes crucial, as postal packages are examined largely on risk-based checks rather than comprehensive inspections. “International postal items are subject to the regular provisions of customs supervision both on import and on export and transit and are checked on a risk-oriented basis in accordance with applicable EU and national legislation, including with regard to compliance with sanctions regulations,” the German General Customs Directorate stated in response to our inquiry. Two of our tracking devices briefly lost their signal in Belarus — likely part of a widespread pattern of satellite navigation systems being disrupted across Eastern Europe — but after a journey of around 1,100 miles, they all showed the same destination. Our packages had reached Russia’s largest cities. Ukrainian authorities told us they were not surprised by our investigation. The country’s presidential envoy for sanctions policy, Vladyslav Vlasiuk, said at the Ukrainian embassy in Berlin that his government regularly collects intelligence on such schemes and shares it with international partners. “Nobody is doing enough, if you look at the number of cases,” Vlasiuk said. ONE STEP BEHIND After the arrival of the packages, we confronted all parties involved, including LS Logistics Solution GmbH, the mysterious shipper that helped transport the goods from Europe to Russia. We called Grigoryev several times, but he never answered; efforts to reach him through the company failed as well. An LS executive would not answer our questions about his role. “Our internal control mechanisms are designed in such a way that violations of EU sanctions are virtually impossible,” LS managing director Anjelika Crone wrote to us. “Shipments that do not meet the legal requirements are not processed further. We are not immune to fraudulent misdeclarations, such as those that obviously underlie the ‘test shipments’ you refer to.” Crone said she could not answer further questions due to data protection and contractual confidentiality concerns. This month, Germany took steps to strengthen enforcement of its sanctions regime, expanding the range of violations subject to criminal penalties. The law, passed by the Bundestag in January, amends the country’s Foreign Trade and Payments Act to integrate a European Union directive harmonizing criminal sanctions law across its 27 member states and ensure efficient, uniform enforcement. Germany was one of the 18 countries put on notice by EU officials last May for having failed to follow the 2024 directive. The Federal Ministry for Economic Affairs, which is responsible for implementing the new policy, argued in a statement to the Axel Springer Global Reporters Network that the very ingenuity of the logistics network we unmasked operating within Germany was a testament to the strength of the country’s sanctions regime. “The state-organized Russian procurement systems operate at enormous financial expense to create ever new and more complex diversion routes,” said ministry spokesperson Tim-Niklas Wentzel. “This confirms that the considerable compliance efforts of many companies and the work of the sanctions enforcement authorities in combating circumvention are also having a practical effect. Procurement is becoming increasingly difficult, time-consuming, and expensive for Russia.” According to those who have tried to administer sanctions laws, that argument rings true — but only partly. “It’s probably more fair to say that sanctions had a material impact and increased the cost of bad actors to achieve their goals. But to say that they’re working well is probably overstating the truth of the matter,” said Max Meizlish, formerly an official with the U.S. Treasury’s Office of Foreign Assets Control and now a research fellow at the Foundation for Defense of Democracies. “When there’s evasion, it requires enforcement,” Meizlish went on. “And when you need more enforcement I think it’s hard to make a compelling case that the tool is working as intended.” The Axel Springer Global Reporters Network is a multi-publication initiative publishing scoops, investigations, interviews, op-eds and analysis that reverberate across the world. It connects journalists from Axel Springer brands—including POLITICO, Business Insider, WELT, BILD, and Onet— on major stories for an international audience. Their ambitious reporting stretches across Axel Springer platforms: online, print, TV, and audio. Together, these outlets reach hundreds of millions of people worldwide.

LONDON — Britain’s center-left government is taking direct inspiration from Denmark’s hardline treatment of migrants — and leaving some of its own MPs feeling queasy. Home Secretary Shabana Mahmood will face down assembled critics from refugee charities and beyond in a speech in London Thursday morning, making what she calls the “progressive,” Labour case for overhauling Britain’s asylum system. Mahmood is fresh from a fact-finding mission to Copenhagen — and wants to import many of the policies that helped Danish premier Mette Frederiksen see off a threat from the right. Frederiksen, head of Labour’s sister party, the Social Democrats, drove asylum claims to a forty-year low. At the 2022 election, she pushed back the radical right and bagged her party’s best result in decades. But at the same time, she has seen losses of socially liberal voters in cities — and faces a fresh test in a snap election later this month. Mahmood will on Thursday try to take on complaints from her own more liberal-minded colleagues, as the struggling Labour Party tries to halt the rise of the right-wing, poll-topping Nigel Farage in the U.K. She will lay out two nightmare visions, in her eyes, of where Britain could go if left-wing Labour MPs don’t hold their noses and back her changes on an issue that animates the British public. On one side is “Farage’s nightmare pulling up the drawbridge,” and on the other is the new left-wing kids on the block: the Greens. She describes leader Zack Polanski as conjuring a “fairy-tale of open borders.” On top of dramatic changes to only grant refugees temporary stay in Britain, Mahmood will announce harsher conditions for asylum seekers who break the law or can support themselves financially. New legislation will make welfare payments and accommodation rights conditional “only to those who play by our rules,” as Mahmood puts it. A senior Home Office official, granted anonymity to discuss sensitive policy details, estimates the changes could extend to thousands of individuals. They would not rule out asylum seekers deemed to have broken the law being forced into destitution and rough sleeping in the process. Mahmood will address critics who will balk at this by arguing that if citizens don’t trust the state to fix what is one of their top priorities then “there is no space for Labour values” to be realized. “Restoring order and control at our border is not a betrayal of Labour values, it is an embodiment of them, and it is the necessary condition for a Labour government to achieve anything it hopes to,” Mahmood is expected to tell the center-left IPPR think tank, according to extracts released in advance. Mahmood will on Thursday try to take on complaints from her own more liberal-minded colleagues, as the struggling Labour Party tries to halt the rise of the right-wing, poll-topping Nigel Farage in the U.K. | Rasid Necati Aslim/Anadolu via Getty Images She will add: “A loss of control breeds fear, and when fearful people turn inwards their vision of this country narrows. Their patriotism turns into something smaller, something darker, an ethno-nationalism emerges. The idea of a greater Britain gives way to the lure of a littler England. And other voices – voices to the far right – take hold.” ‘SOFT-LEFT’ JITTERS But Mahmood’s pitch may fall on unreceptive ears in her own party. The bulk of Labour MPs on the party’s so-called “soft-left” have only been made more jittery by the catastrophic defeat inflicted on them from the left in the Gorton and Denton by-election last week. In that contest, the triumphant Greens appealed to younger progressives as well as Muslim voters to overturn nearly a century of Labour representation in the south Manchester seat. Even worse, Farage’s Reform came second, pushing Keir Starmer’s ruling party into a distant third. Some Labour MPs responded to that loss by calling for Mahmood to water down her existing policies on migration — though whether this was really a salient issue in the campaign was disputed by a senior Labour activist involved. “The brand just isn’t in a good place at the minute. I think that was the key thing really,” was their diagnosis. “Gaza came up far more with that kind of crowd than indefinite leave to remain.” But the same activist did offer a word of caution: “The reforms need to be done in a way that bring people with them — which a lot of progressive voters don’t necessarily feel at the minute.” Even worse, Nigel Farage’s Reform came second, pushing Keir Starmer’s ruling party into a distant third. | Jonathan Brady/PA Images via Getty Images Unhappy Labour MPs are increasingly making their views on Mahmood’s Danish turn known. Former immigration barrister and leading critic of her approach Tony Vaughan wrote to Starmer this week expressing in detail his concerns that Mahmood’s settlement restrictions will damage the economy, while posing serious dangers to women, children and community cohesion.  Vaughan has also been approaching colleagues for backing, and has received support from some senior colleagues, according to two MPs. The Unison public services union — a key funder of Labour — has been organizing another letter among parliamentarians that has grown from an initial 40 signatuories. Sarah Owen, the Labour MP who chairs the Women and Equalities Committee, told POLITICO: “The letters are a sign of a failure of engagement from the department and the secretary of state and relevant ministers.” Another left-wing MP fears Mahmood’s pitch is simply “another attempt to chase Reform down a cul-de-sac.” They flagged vast differences between Denmark and Britain, arguing it is far larger and more diverse, with deep appeals based on family ties and language. LESSONS TO LEARN Those to the right of Labour strongly disagree — and back Mahmood’s Copenhagen inspiration. “Illegal immigration continues to be a major concern in constituencies like mine,” said Jo White, who leads the Red Wall caucus representing Labour’s former heartlands in England’s North and Midlands. “I am listening to my voters and where lessons can be learnt from countries like Denmark, we should take them.” Mahmood describes leader Zack Polanski as conjuring a “fairy-tale of open borders.” | Paul Ellis/AFP via Getty Images White added: “Shabana has recently visited Denmark, and seen their immigration system operating at first hand and she is right to look at what will work on British soil.” Indeed, Mahmood has put distance between herself and some aspects of the Frederiksen plan. The Home Office ruled out copying a jewelry law, which would see valuable items seized to cover the cost of asylum support, and will not follow Copenhagen’s “ghetto” demolition law targeting “parallel societies.” The senior British official quoted above said internal polling suggests “we’re exactly where the vast majority of the public are.” Luke Tryl, of the More in Common think tank, agreed on the possible success among voters for following the “Danish model.” “I very much think it can be a winner,” he said. “When we polled on asylum reforms even Green voters tended to back most of them.” Polling of Mahmood’s last round of hardline reforms in November, by the More in Common think tank, found that they were popular among Labour voters — and that most even went down well with Greens. ‘SAVE PUBLIC CONSENT’ There is one possibly uniting approach that Mahmood has touted, but is yet to outline: an expansion of Britain’s extremely limited legal routes for claiming asylum. On top of dramatic changes to only grant refugees temporary stay in Britain, Mahmood will announce harsher conditions for asylum seekers who break the law or can support themselves financially. | Ben Stansall/AFP via Getty Images “A huge part of this is to save public consent for the asylum system and to restore order and control so we can get the space to increase the number of safe and legal routes for those genuine refugees fleeing war and persecution,” said the senior official. There are plans underway to open new community sponsorship routes, an approach that proved popular in response to the invasion of Ukraine. Tryl said: “What we’ve found is the sponsorship models which do appear to be at the heart of their safe routes things are immensely popular — they particularly reduce opposition among conservative groups.”  Progressive observers will watch Mahmood closely to see if she twins her Danish-style hardline approach with a softer offering.

Andrej Babiš built his fortune making fertilizer. But another, lesser-known arm of his business empire has helped bring more than 170,000 children into the world across Europe. The Czech prime minister’s name is rarely attached to FutureLife, one of Europe’s largest IVF clinic networks, spanning 60 clinics in 16 countries from Prague to Madrid to Dublin. But is just one part of a commercial empire that spans nitrogen-based fertilizers and industrial farms, assisted reproduction, online lingerie stores and more. And the Czech leader holds this portfolio while sitting at the table negotiating EU budgets, health rules and industrial policy. Yet in Brussels, nobody can answer a deceptively simple question: Which of the companies associated with Babiš receives EU money — and how much? “We might be giving him money and we don’t even know,” said Daniel Freund, a German Green lawmaker who led the European Parliament’s inquiries into Babiš during his first term as Czechia’s prime minister from 2017 to 2021. In 2021, the Parliament overwhelmingly adopted a resolution condemning Babiš over conflicts of interest involving EU subsidies and companies he founded. Under EU rules, member countries are responsible for checking conflicts of interest and reporting on who ultimately benefits from EU funds. But there is no single EU-wide register linking ultimate beneficial owners to all EU payments — making cross-border oversight difficult. The issue has resurfaced as Babiš returns to power and once again takes a seat among other EU heads of state and government in the European Council. In that exclusive body, he helps negotiate the bloc’s long-term budget, agricultural subsidies and other funding frameworks that shape the sectors in which his companies might operate. For years, debates over Babiš’s conflicts of interest have revolved around a single name — Agrofert, the agro-industrial empire that EU and Czech auditors found had improperly received over €200 million in EU and national agricultural subsidies. The payment suspensions and repayment demands continue: This week, Czech authorities halted some agricultural subsidies to Agrofert pending a fresh legal review of the company’s compliance with conflict-of-interest rules. Babiš has consistently rejected accusations of wrongdoing. His office said he “follows all binding rules” and that “there is no conflict of interests at the moment,” adding that Agrofert shares are managed by independent experts and that he “is not and will never be the owner of Agrofert shares.” In a parliamentary debate earlier this month, he dismissed the controversy as politically motivated, accusing opponents of having “invented” the conflict-of-interest issue because they were unable to defeat him at the ballot box. But critics argue that the renewed focus on Agrofert obscures a far broader commercial footprint. “Agrofert is only half of the problem,” said Petr Bartoň, chief economist at Natland, a private investment group based in Prague. “The law does not say ‘thou shalt not benefit from companies called Agrofert.’ It says you must not benefit from any companies subsidized by or receiving public money.” The concern, critics argue, arises from the sheer number of companies and sectors with which Babiš remains associated. THE INVISIBLE PILLAR Separate from Agrofert sits Hartenberg Holding, a private-equity vehicle Babiš co-founded with financier Jozef Janov in 2013. He holds a majority stake in the fund through SynBiol, a company he fully owns and which, unlike Agrofert, has not been transferred into any trust arrangement. With assets worth around €600 million, Hartenberg invests in health care, retail, aviation and real estate. Yet it has attracted only a fraction of the scrutiny directed at the agricultural holding, according to Lenka Stryalová of the Czech public-spending watchdog Hlídač státu. “Alongside Agrofert, there is a second, less visible pillar of Babiš’s business activities that is not currently intended to be placed into blind trusts,” she said. That pillar includes FutureLife, whose 2,100 specialists help individuals and couples conceive across Czechia, Slovakia, the U.K., Ireland, Romania, the Netherlands, Spain, Italy and Estonia. The clinics operate in a policy-sensitive space shaped primarily by national health reimbursement systems and insurance rules, rather than decisions taken directly in Brussels. Those systems, however, function within a broader EU regulatory framework governing cross-border care and state aid. Hartenberg owns 50.1 percent of FutureLife. The company said in a statement that Babiš has no operational role, no board seat and no decision-making authority. It added that FutureLife clinics operate like other health care providers and, where applicable, are reimbursed by national public health insurance systems under the same rules as other providers. Like thousands of other companies, some FutureLife entities received pandemic-era wage support under Czechia’s Covid relief programs. There is no evidence of any irregularity in those payments.  But health care is only one corner of the portfolio. Through Hartenberg, Babiš-linked capital also flows into everyday retail life. Astratex, a Czech-founded online lingerie retailer that began as a catalogue business before moving fully online in 2005, now operates localized e-shops across roughly 10 European markets and generates tens of millions of euros in annual revenue. Hartenberg acquired a controlling stake in 2018, marking one of the fund’s early expansions into cross-border digital retail. In Czechia, shoppers may also encounter Flamengo florist stands, a network of around 200 outlets selling bouquets, potted plants and funeral flower arrangements inside supermarkets and shopping malls. Hartenberg acquired a majority stake in the chain in 2019, backing its expansion and push into online delivery. Other online businesses linked to Babiš include sports equipment, and wool and textile retailers. Through Hartenberg, Babiš has also invested in urban development and real estate. Hartenberg was an early majority investor in the project company behind Prague’s Císařská vinice, a premium hillside development of villas and apartments near Ladronka park, partnering with developer JRD to finance construction. JRD Development Group said the project company is now 100 percent owned by JRD and that neither Babiš nor companies linked to him hold any direct or indirect ownership interest. The firm added that the development has not received EU funds or other public financial support. None of the Hartenberg businesses have ever been accused of misusing EU subsidies. But the long-running “Stork’s Nest” case, first investigated more than a decade ago and still unresolved, shows how difficult it can be to follow Babiš’s business web. The alleged fraud involved a €2 million EU subsidy provided in 2008 to the 31-room Čapí Hnízdo (Stork’s Nest) recreational and conference center in central Czechia, then part of Babiš’s Agrofert conglomerate. Prosecutors have accused Babiš and his associates of manipulating the center’s ownership and concealing his control of the business in order to obtain the subsidy. Babiš has always denied wrongdoing, telling POLITICO in 2019 that the case was politically motivated. He was acquitted in 2023, but an appeals court later overturned that verdict and ordered a retrial, which remains pending. Today, the resort itself is no longer part of Agrofert. It is owned by Imoba, a company fully controlled by Babiš’s SynBiol, the same holding that controls Hartenberg. Hartenberg itself holds no stake in Stork’s Nest. Taken together, Babis’ non-Agrofert portfolio spans health care reimbursement systems, online retail regulation, aviation safety oversight, real estate and city-planning decisions across multiple EU jurisdictions. In theory, a Czech consumer could encounter Babiš-linked companies at nearly every stage of life: the fertilizer on the fields that grow the wheat, the bread on the supermarket shelf, the bouquet for the wedding, the apartment in Prague and even the clinic that helps bring the next generation into the world. And at the end, perhaps, the flowers once more. WHY BRUSSELS CAN’T KEEP TRACK During Babiš’s previous term, the European Commission concluded that trust arrangements he put in place did not eliminate his effective control over Agrofert. A leaked legal document reported by POLITICO this month has since renewed accusations that his latest trust setup does not fully address those concerns either. Babiš rejects that interpretation, saying the arrangement complies with Czech and EU law and insisting he has done “much more than the law required” to distance himself from the company. The Commission said it does not maintain a consolidated list of companies ultimately owned or controlled by Babiš across member countries. Nor does it hold a comprehensive accounting of EU funds received by companies linked to him beyond Agrofert. Instead, responsibility for collecting beneficial ownership data lies primarily with national authorities implementing EU funds. The Commission can audit how member countries manage conflicts of interest and take measures to protect the EU budget if needed, but it does not itself aggregate that information across borders. The Commission confirmed to POLITICO that it has asked Czech authorities to explain how conflicts of interest are being prevented in relation to companies under Babiš’s control beyond Agrofert. Czech Regional Development Minister Zuzana Mrázová on Thursday acknowledged receiving the Commission’s letter earlier this month, saying it will be answered in line with applicable legislation and adding that, in her view, the prime minister has done everything necessary to comply with Czech and EU law. “From my perspective, there is no conflict of interest,” she said. Freund argues that the corporate complexity has become a problem in its own right. “The tracking of beneficial owners or beneficial recipients of EU funds is at the moment very difficult or sometimes even impossible,” said the EU lawmaker. Part of the difficulty lies in Europe’s fragmented ownership registers, which exist on paper across the EU but don’t speak the same language or even list the same owners. Freund described them as “inconsistent,” with some national databases listing Babiš in connection with certain companies while others do not. Babiš’s defenders argue that his steps regarding Agrofert go beyond what Czech law strictly requires. Critics counter that the law was never written with billionaires running multi-sector empires in mind and that resolving the conflict of interest identified by auditors in relation to Agrofert does not settle the wider concerns raised by the scale of his business interests. “For some reason, the perception has been created that once Agrofert is resolved, that resolves the conflict of interest,” Bartoň said. “As if the president were the arbiter of what needs and needs not be dealt with.” In reality, many companies owned through Hartenberg and Synbiol structures continue to operate in areas shaped by public spending, regulation and political decisions without being part of any divestment or trust arrangement. Those assets “still not only [pose] conflict of interest,” said Bartoň, but they are “not even in the process of being dealt with.” From fertilizer to fertility to funeral flowers, the structure is easy enough to trace in everyday life. It is far harder to trace on paper. Ketrin Jochecová contributed to this report.

BRUSSELS — Hungary is holding up the EU’s latest set of sanctions on Russia to pressure the European Commission into approving its application for a €16 billion defense loan, according to two EU diplomats. Budapest is locked in a major standoff with Brussels over aid to Ukraine, after Prime Minister Viktor Orbán on Friday threatened to veto the bloc’s 20th sanctions package against Moscow as well as a €90 billion loan to Kyiv, until Ukraine resumes oil flows via a pipeline that Kyiv says was damaged in a Russian attack. While EU officials are hopeful that a pledge to fix the pipeline will persuade Orbán to drop his veto on the loan, two EU diplomats directly aware of the discussions, granted anonymity to speak freely about the sensitive negotiations, said Budapest may continue to block the sanctions until its defense loan application is approved. The Commission proposed the new sanctions package, which broadens restrictions on Russian energy, banks, goods and services, on Feb. 6. The EU had hoped to get final approval on both measures — the sanctions package, which requires unanimity to pass, and the €90 billion loan — before this past Tuesday, the fourth anniversary of Moscow’s full-scale invasion of Ukraine. With Kyiv set to run out of cash in April, the same month Hungarians head to the polls for a national election, EU leaders are scrambling for ways to get Budapest to drop its opposition while avoiding a legal blowup with Orbán that could feed into his reelection campaign. Hungary has applied for €16 billion through the EU’s SAFE program, which provides cheap money to EU countries buying weapons in bulk to boost the bloc’s defenses against Russian aggression. The Commission has yet to approve Hungary’s application, and is “slow-walking” an initial payment of €2.4 billion in the hope of applying pressure to Budapest, officials told POLITICO earlier this week. The Commission denied it has blocked Budapest’s application. The Commission should finalize its review of Hungary’s SAFE loan application to avoid any perception that it’s being held up for political reasons, the two diplomats said. It would still be up to national capitals to give final approval to disbursing the defense cash. A spokesperson for Hungary’s permanent representation in Brussels didn’t immediately reply to a request for comment. The Commission has already withheld €17 billion in regional development and post-pandemic recovery funds earmarked for Hungary over rule-of-law concerns.