BUDAPEST — Hungary is withdrawing from a Russia-linked investment bank a day after it was sanctioned by the United States.
The International Investment Bank (IIB) moved its headquarters from Moscow to Budapest in 2019, fanning fears in Western capitals that it could be used as a cover for Russian intelligence operations inside Europe.
On Wednesday, Washington sanctioned IIB and its top managers — including a Hungarian citizen — after Hungarian Prime Minister Viktor Orbán’s government repeatedly dismissed American concerns about its activities.
And while Hungarian officials have criticized U.S. policy toward Hungary, on Thursday the country’s ministry for economic development said Budapest is withdrawing from the IIB and pulling its representatives from the institution.
“The government discussed the situation and found that although the International Investment Bank played an important development role in Central and Eastern Europe, the operation of the bank lost its meaning as a result of the imposed American sanctions,” the Hungarian ministry said in a statement.
Hungary’s engagement with the IIB has been a source of growing tension in Budapest’s relationship with Washington, which has deteriorated significantly over the past months due to the Hungarian government’s continued relationship with the Kremlin and a campaign in the government-linked press targeting the U.S. ambassador in Budapest, David Pressman.
“The IIB’s presence in Budapest enables Russia to increase its intelligence presence in Europe,” the U.S. Treasury Department said in a statement explaining its sanctions decision.
The bank, it said, “opens the door for the Kremlin’s malign influence activities in Central Europe and the Western Balkans, and could serve as a mechanism for corruption and illicit finance, including sanctions violations.”
