Russian-led bank leaves Hungary following US sanctions

A small Russian-led multilateral development bank announced on Wednesday that it was leaving Hungary after it was placed on a US sanctions lists and Budapest withdrew its membership.

“The Bank has commenced a relocation of its operations and functions of its headquarters from Hungary to Russia,” the International Investment Bank (IIB) said in a statement on its website.

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Last week, Hungary’s government said it was quitting the bank, a day after Washington levied sanctions on the entity and several of its officials.

They were among dozens newly added entities on a US sanction list, with Washington seeking to curb Russians’ access to the international financial system over its invasion of Ukraine.

“Due to US sanctions… the bank is currently deprived of the ability to conduct financial operations,” IIB said, adding it had to leave Budapest since Hungary withdrew its membership.

US ambassador to Budapest, David Pressman, last week expressed “concerns about the continued eagerness of Hungarian leaders to expand and deepen ties” with Russia despite the war.

On his fourth trip to Moscow since the invasion, Hungarian Foreign Minister Peter Szijjarto also last week announced an expansion of oil and gas energy deals with Russia.

The IIB moved its headquarters to Budapest in 2019 — employing some 120 people at the time — under Prime Minister Viktor Orban, who cultivated close ties with Russian President Vladimir Putin before the Ukraine war.

The bank’s other EU backers — Bulgaria, Czech Republic, Romania and Slovakia — announced after Russia invaded Ukraine that they were quitting the lender, offloading their shares.

The other members, besides Russia itself, are Cuba, Mongolia and Vietnam.

Read more: Hungary to quit Russian International Investment Bank after US sanctions: Report