The Moscow-based Russian International Investment Bank (IIB), which is moving its headquarters to Budapest this year, will receive all conceivable privileges from the Hungarian government.
According to a parliamentary proposition to introduce the IIB into the Hungarian legal system, the Hungarian government would provide the bank with a number of extra rights.
Based on the proposition of the governing party Fidesz, the IIB will be exempt from any financial investigations, registration with authorities, reporting standards, taxes, duties, export-import restrictions and all legal procedures carried out by the Hungarian judiciary except where the bank had waived its immunity.
Costs related to the bank’s premises, rent and security will be covered by the Hungarian taxpayer.
Furthermore, the bank’s offices will be under the complete control of IIB. The Hungarian authorities will only be able to enter its building with the bank’s explicit consent.
The bank’s staff will enjoy full diplomatic immunity and Hungary will also ensure that IIB’s guests would be able to enter Hungary with “no regard to their citizenship”. In practice, the bank will be provided with a similar legal standing as diplomatic missions or local representations of international organisations without having any actual diplomats.
The government says IIB’s move to Budapest will enhance the Hungarian capital as a financial hub. However, Zita Gurmai, an MP from the Socialist party, pointed out that IIB’s total balance sheet is 2.5 per cent that of Hungary’s largest bank, OTP, and that IIB would be only the 17th largest bank in the country.
The opposition MP added that the IIB is “Putin’s Trojan horse” and said the government’s proposition would give an unprecendented opportunity to Russians to enter the EU, which could create a serious national security concern.
The IIB is the legal successor of Comecon, the former bank of Soviet economic integration.
The Hungarian branch of the bank is expected to be opened during the second half of 2019.