Hungary is leaving the Russian bank as US sanctions have ‘ruined’ it, Prime Minister Orban says, as ties deteriorate

BUDAPEST (Reuters) – Hungary this week exited a Budapest-based Russian bank because US sanctions had “ruined” it, Prime Minister Viktor Orban said on Friday, adding that Hungarians are complying with sanctions against Russia but remain opposed to them will pronounce.

The NATO leader with the closest ties to Russia told state radio the United States is a key ally of Hungary but there are disagreements over the war in Ukraine.

The US has “not given up on its plan to force everyone into a war alliance,” a move Hungary — which does not supply arms to Ukraine — will oppose, Orban said.

Orban’s government announced Thursday it would leave Bank IIB, which it says finances development projects in Eastern Europe, and move its headquarters from Moscow to Budapest in 2019.

Russia is its largest shareholder, while Hungary was the second largest and senior Hungarian officials have held positions there, including board seats. Other Eastern European countries severed ties with IIB after Russia’s invasion of Ukraine last year.

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This week, the United States imposed fresh sanctions on the bank, including three of its top officials, two Russians and Hungarians. Washington urged Hungary to sever ties with what it described as an “opaque Kremlin-controlled platform”.

Orban said Hungary will comply with sanctions against Russia even if it doesn’t support them.

“We have never agreed to sanctions, but we do not contest the right of others, including the United States, to impose sanctions,” he said.

“Since the (outbreak) of war, it was clear that the Bank’s (IIB) capabilities were shrinking… and now that the Americans have sanctioned them, they have effectively ruined them.”

Hungary is a NATO member and opposes Russia’s invasion of Ukraine, but nationalist Prime Minister Orban has maintained close ties with Russia for years and has been reluctant to criticize President Vladimir Putin.

Relations between Budapest and Washington have deteriorated in recent months as Hungary has been reluctant to ratify Sweden and Finland’s NATO membership. Finland joined the alliance this month, but Sweden’s bid to join is on hold awaiting approval from Hungary and Turkey.

While Orban has criticized sanctions against Russia, his government has not blocked EU action.

On Thursday, the Guardian newspaper reported that a bipartisan group in the US Congress is drafting more US sanctions targeting top Hungarian politicians linked to the Orban government.

The Hungarian government spokesman has not responded to repeated email requests for comment.

(Reporting by Krisztina Than; Editing by Peter Graff)

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