The EU said on Wednesday it was moving to withhold €200 million earmarked for Hungary, after Budapest failed to pay an equivalent fine for violating asylum rules.

In June, the European Court of Justice slapped Hungary with the multi-million-euro fine and imposed an additional daily one-million-euro penalty for failing to comply with a 2020 ruling on upholding international procedures for asylum-seekers.

The government of Hungarian Prime Minister Viktor Orban, who is frequently at loggerheads with Brussels, had made it clear it was not going to pay, describing the sanction as "unfair". A deadline to settle the penalty expired on Tuesday.

"That means that the commission is in accordance to the applicable rules moving to what we call the offsetting procedure," European Commission spokesman Balazs Ujvari told journalists.

"So what we're going to do now is to deduct the 200 million euros from upcoming payments from the EU budget towards Hungary". 

In December 2020, ECJ found that Hungary had not allowed asylum-seekers to leave detention while their cases were being considered, and offered no special protection to children and other vulnerable people.

Budapest has continued to restrict migrants' ability to formally request asylum and is not upholding their right to stay while their applications are processed, the court said in June.

Ujvari of the commission said Hungary had also missed a deadline to explain how it intended to comply with the court ruling, which was tied to the additional daily one-million-euro penalty.

The EU has thus issued it with a payment request for another 93 million euro -- one for every day passed since the court's verdict, he said.