Sanctions by the US are directed at the bank in Budapest

On Wednesday (12 April), the United States imposed sanctions on three top International Investment Bank officials in Budapest after alleging that Hungary had disregarded US warnings on the “opaque Kremlin platform.”

Russian nationals Nikolay Kosov and Georgy Potapov, as well as Hungarian national Imre Laszloczki, the latter two of whom hold important positions on the IIB’s management board, have had their names added to the US sanctions list.

Bulgaria, the Czech Republic, Romania, Slovakia, and after Russia’s invasion of Ukraine in February 2022, they stopped taking part in the IIB. The bank, which shifted operations to Budapest in 2019, was not subject to any action by the Hungarian government.

Under the leadership of nationalist Prime Minister Viktor Orbán, who has avoided criticizing President Vladimir Putin personally despite opposing Russia’s invasion of Ukraine, Hungary, a NATO and EU member, has developed strong ties with Moscow since 2010. His approach has drawn criticism from allies in the US and Europe.

US REACTION

Following the announcement, US Ambassador to Budapest David Pressman said at a news conference in Budapest, “The presence of this opaque Kremlin platform (IIB) in the heart of Hungary threatens the security and sovereignty of the Hungarian people, their European neighbors, and their NATO allies.”

According to Pressman, the US had expressed concerns about the bank’s presence, but unlike other NATO partners, Orbán’s administration rejected these worries and remained committed to hosting the IIB.

Despite Russia’s continuous savage aggression against Ukraine and threat to transatlantic security, Pressman stated, “We are concerned about the continued eagerness of Hungarian leaders to expand and deepen relations with the Russian Federation.”

The United States is demonstrating with this declaration that we will act in response to Hungary’s decisions and to limit access for Russia and sanctioned Russian individuals to the global banking system.

A Reuters request for comment was not immediately answered by the head of the Hungarian government’s press office.

According to a statement from the US Treasury, Russia was able to increase its intelligence presence in Europe thanks to the IIB’s presence in Budapest and it “could serve as a mechanism for corruption and illicit finance, including sanctions violations.”

HUNGARY’S POLICY

Hungary, a landlocked country that imports a lot of Russian natural gas and crude oil, has criticized EU sanctions against Moscow for failing to seriously harm Moscow while endangering the health of the European economy.

Shortly before Wednesday’s US declaration, Gergely Gulyas, Orbán’s chief of staff, said that the US Embassy was actively pressuring Hungary to change its position on Russia.

Gulyas stated in remarks shared on Twitter by a government spokesperson that “in recent days, in the streets, everyone has been confronted with the fact that it is no longer the opposition that is campaigning with US money, but the US Embassy directly campaigned in Hungary.”

The US hasn’t given up trying to persuade Hungary to adopt the pro-war stance held by many of our partners, but Hungary is still adamant that the sole shared goal is peace.

Péter Szijjártó, Hungary’s foreign minister, traveled to Moscow this week to discuss gas and oil supplies as well as a current Rosatom initiative to expand the country’s nuclear plant.