The European Commission will propose that the EU bans all new Russian gas contracts based on trade law, in a move that seeks to circumvent any potential veto from Hungary and Slovakia.

Companies would be banned from signing any new contracts for Russian gas, effective immediately, according to a summary of the proposal seen by the Financial Times and due for presentation on Tuesday. Existing short-term contracts, pipeline gas and LNG imports from Russia would have to be terminated from 2026, while those linked to long-term contracts would come to an end on January 1 2028, the summary said.

In a concession to Hungary and Slovakia, who import Russian gas, they will be granted an exemption until 2027 to phase out their existing gas contracts, two officials with knowledge of the proposal said.