A deal by Hungary to award nuclear power contracts to a Russian state-owned company is facing “a growing threat” from EU regulators amid concerns that Budapest may resist attempts to ramp up sanctions against Moscow, the Financial Times (FT) reported on Sunday.

In an article titled “Hungary-Russia nuclear power deal faces Brussels roadblock”, the FT says that up to €12bn in nuclear power contracts that Hungary had awarded to Russia could be blocked by “a veto or prohibitive fine” from EU regulators who have the power to block the project.

Although Moscow is subjected to Western pressure and sanctions over Ukraine, Hungary considers the contacts worth 12 billion euros as a “centrepiece of strategy to forge deeper political and economic ties with Russia,” the report says.

Budapest had awarded contracts to a subsidiary of Russian atomic energy company Rosatom in December to design, build, and maintain two 1,200 megawatt reactors in the town of Paks, 75 miles south of Budapest.

“The decision to conceal some details of the contracts on grounds of national security provoked suspicion” in Brussels, despite the fact that over a year ago the European Commission didn’t raise any objections to an intergovernmental agreement that was signed by the two countries, now “the award of contracts for the Paks plant has thrown up thorny antitrust concerns,” the report said.

“Two EU agencies are now examining the agreements. Euratom, the nuclear watchdog, is withholding approval for the plant’s fuel supply on technical and financial grounds, though talks are ongoing,” according to the report.

All nuclear fuel supply deals by EU member states must receive approval from the Euratom agency.

Competition investigators from the European Commission “are also looking at state subsidies and the legality of contracts awarded to Rosatom and its affiliates without a tender,” the report says.

The antitrust inquiry “is still at an early stage,” which gives Hungary an opportunity to reach an agreement with Brussels prior to a possible full formal investigation.

“For EU diplomats, [Hungarian Prime Minister Viktor] Orban’s decision not to hold a competitive tender underlined fears that his close links with Moscow could lead Hungary to resist attempts to ramp up sanctions against Russia,” the FT report said.

The report added that opponents of the deal have voiced their concerns that the deal carries both financial risks and deepens Hungary’s energy dependence on Russia, as Hungary already relies on Russia for 80 percent of its oil imports and 60 percent of its gas imports.