Hungary promises to monitor Russian ‘spy bank’ in Budapest

Hungary’s prime minister Viktor Orbán has privately told US ambassador to Hungary David Cornstein that the Hungarian secret services will monitor the activities of the International Investment Bank (IIB), a Russia-led financial institution that recently moved its headquarters to Budapest from Moscow.

According to Hungarian investigative news site Direkt36, the Hungarian government will enhance its cooperation with US intelligence services, “carefully screen” all Russian employees of the bank who apply for diplomatic immunity and limit the IIB in choosing its future headquarters.

The bank was reportedly going to move to a location close to the US embassy in Budapest, which the US government strongly rejected.

The Hungarian government’s approval of moving the IIB to Budapest sparked major controversy since the institution, which is the successor of the Comecon Bank, the former Soviet bank for economic integration, is widely seen as an arm of Russia’s secret services.

In the spring, pro-government MPs passed a law granting diplomatic immunity to the bank’s employees, leading to concerns that Russian officials not working for the bank might also be granted this status and therefore be able to bypass the EU’s sanctions against Russia.

Earlier diplomatic sources suggest that Hungarian diplomacy has been heavily lobbying against labeling the IIB as a security threat.

While the Hungarian government reportedly keeps telling US diplomats that the bank will eventually not receive full diplomatic immunity, sources from the IIB told the Hungarian press the immunity laid out by the Hungarian parliament is already in full effect.

The Hungarian press has reported that so far only Nikolay Kosov, the IIB’s director and a former Russian intelligence officer, had been granted with the immunity.