International Investment Bank
International financial institution | |
Founded | July 10, 1970 |
---|---|
Headquarters | Moscow, Russia |
Key people | Nikolay Kosov (chairman) |
Total assets | EUR 1720 million |
Total equity | EUR 2 billion (paid in capital EUR 378,71 million) |
Owner | Comecon member countries (1970–1991) |
Website | www |
The International Investment Bank (IIB) is a sanctioned Russian government-controlled
Initially made up of all
History
Soviet era
IIB was established in 1970 under the auspices of
After graduating in 1975 from the Moscow Financial Institute majoring in international financial relations, Albert Nikolaevich Belichenko (Russian: Альберт Николаевич Беличенко; born 2 July 1931), who is fluent in German, served as Chairman of the Board of the International Investment Bank from 1975 until his retirement in 1993. Previously, he was a director on the three-member Board of Directors of Morgenrot AG and, from 1966 to 1969, he headed the Wozchod Handelsbank (Zurich) which was the first Soviet bank in Switzerland opening on 22 June 1966.[7][8][9][10][a]
Post-Communist era
Following the Soviet Union's unraveling, IIB membership declined until Russia was the only remaining member.[citation needed] In 2019, IIB relocated its headquarters from Moscow to Budapest.[14][15] Viktor Orbán gave IIB as well as "guests, business partners, experts" EU residence and full diplomatic immunity.[16] In 2020, the IIB acquired the historic Lánchíd Palace on a prominent location adjacent to Budapest's iconic Széchenyi Chain Bridge for its head office.[17]
Poland was the first country to withdraw from the bank in 2000; in 2023, it is still trying to recover its €29.15 million debt.[18]
A day after the
The exit of most members of the bank withdrawing their investments and the cost of sanctions against the bank, including first Euroclear and then the Belgian government blocking funds in October 2022, has resulted in the bank using up its liquid reserves, putting it at risk of bankruptcy.[23]
In January 2023 it was agreed that the capital of the bank be changed, with Russia converting some capital to debt, allowing the Czech Republic and Slovakia to withdraw their capital without Russia exceeding 50% ownership. Proposed new ownership: Russia 45,44%, Hungary 25,27%, Bulgaria 14,46%, Romania 8,94%, with Cuba, Mongolia and Vietnam holding less than 3% each.[24]
Russia announced in April 2023 that the bank will relocate its headquarters from Hungary back to Russia[25] after Hungary announced it was withdrawing from the IIB, which happened after the bank was sanctioned.[26] Hungary formally withdrew from the bank on 19 October 2023.[27] Later[when?] the bank had been relocated to Moscow.[citation needed]
Governance
The
Whilst the bank was based in Budapest, the Hungarian authorities were not responsible for overseeing the bank.[27] As an international organisation, the Bank is not subject to national banking and other regulations enjoying immunities and privileges determined by the Agreement Establishing the IIB and corresponding agreements with its member states.[32] The governance of the bank is in Russia and Russian based auditors were appointed in 2023.[18]
Membership
Current members
Source:[33]
Former members
- Bulgaria (1970–2023)[34]
- Czech Republic (1993–2022)[34]
- Czechoslovakia (1970–1993)
- East Germany (1970–1990)
- Hungary (1970–2023)[35]
- Poland (1970–2000)[34]
- Romania (1970–2023)[34]
- Slovakia (1993–2022)[34]
- Soviet Union (1970–1991)
The IIB statutory documents allow for the admission of either sovereign states or international organisations as members.
Controversy
Connections to Russian spy operations
With the relocation of IIB's headquarters to EU member Hungary, critics raised that the bank serves as a "Trojan horse"[36] for Russian intelligence operations and spy activities against the European Union.[37] This claim is supported by the fact that the bank's former chief Nikolai Kosov has close ties with Russian intelligence agencies, and that his father was a KGB top operative in Budapest in the 1970s, while his mother was described as “one of the most extraordinary spies of the 20th century”. Kosov has rejected this claim.[38]
Hungary's Russia-friendly government was also criticised for providing privileges to the IIB, including diplomatic immunity to its staff and exclusion from any regulatory supervision in Hungary.[39] The Government of Hungary announced the withdrawal of its membership on the 13 April 2023, the withdrawal was completed on 19 October 2023.[40]
Sanctions
In April 2023 the USA sanctioned the bank, IIB Capital and their management for potentially facilitating the evasion of U.S. sanctions against Russia.[41] Subsequently, all correspondent banking entities of IIB in the EU blocked transactions in connection with IIB, including Bank’s nostro accounts in EUR, USD, HUF, CZK and RON.[42]
Unpaid loans
In October 2023 the bank failed to repay two loans of 350 million lei ($70m) to five Romanian pension funds, due to accounts being blocked as a result of sanctions.[43] Romania is asking the US for assets to be unfrozen to enable Romanian investors to be repaid their loans from the IIB Romanian issued bonds, including another repayment due shortly of 200 million lei ($40m).[44]
See also
Notes
- Soviet Control Commission (SCC) in East Germany.[12]
References
- ^ "contacts". International Investment Bank.
- ^ "International Investment Bank (IIB) | US Sanctions Russian-Controlled IIB Bank, Executives in Hungary". news.yahoo.com. Retrieved 27 June 2023.
- ^ András Rácz (18 March 2019). "A foot in the door? Russia's International Investment Bank moves to Hungary". European Council on Foreign Relations.
- ^ Szabolcs, Panyi; András, Pethő (19 July 2021). "Hungarian journalists and critics of Orbán were targeted with Pegasus, a powerful Israeli cyberweapon". Direkt36 (www.direkt36.hu). Archived from the original on 5 September 2023. Retrieved 23 October 2023.
- ^ "DEMOCRACY DIGEST: HUNGARY'S BALANCING ACT TOPPLES AS IT ABANDONS RUSSIA 'SPY BANK'". 14 April 2023.
- ^ "Hungary to quit Russian International Investment Bank after U.S. sanctions". Reuters. 13 April 2023. Retrieved 31 October 2023.
- ^ "SCHWEIZ / SOWJET-BANK: Morgenröte AG" [SWITZERLAND / SOVIET BANK: Dawn AG]. Spiegel Online. Vol. 39. 19 September 1966. Archived from the original on 2 April 2015. Retrieved 23 October 2023.
- ^ a b c Кротов, Николай (Krotov, Nikolay) [in Russian] (2007). "Гонка на золотых тельцах" [Race on the golden calves]. «Неприкосновенный запас» 2007, №2(52) ("Emergency Reserve") (in Russian). Archived from the original on 20 March 2013. Retrieved 23 October 2023 – via magazines.russ.ru.
{{cite news}}
: CS1 maint: multiple names: authors list (link) - ^ "Беличенко, Альберт Николаевич" [Belichenko, Albert Nikolaevich]. fa100.ru (in Russian). November 2021. Archived from the original on 28 November 2021. Retrieved 23 October 2023.
- ^ Избран новый совет директоров МБРР 27 April 2010
- ^ a b "Титова Галина Аполлоновна" [Titova Galina Apollonovna]. letopis.org (in Russian). 23 October 2023. Archived from the original on 23 October 2023. Retrieved 23 October 2023.
- ^ a b c d "Галина Аполлоновна Титова: В Сингапур я ездила разбираться десять лет" [Galina Apollonovna Titova: I went to Singapore to figure it out for ten years] (PDF). letopis.org (in Russian). Archived from the original (PDF) on 23 October 2023. Retrieved 23 October 2023.
- ^ "Лондонский Московский народный банк (Моснарбанк, г. Лондон): ИСТОРИЯ" [London Moscow People's Bank (Mosnarbank, London): HISTORY]. VEB (letopis.ru) (in Russian). 21 April 2022. Archived from the original on 22 April 2022. Retrieved 23 October 2023.
- ^ "Completion of relocation, increase in capital, new appointments – Budapest hosts the first meetings of IIB Board of Directors and Board of Governors after the Bank's move to Europe". International Investment Bank (IIB). Retrieved 22 September 2021.
- ^ "International Investment Bank moved into Chain Bridge Palace".
- ^ "International Investment Bank (IIB) | Putin's Resurrected Comecon Bank Will Have Diplomatic Immunity in Hungary (archive)". hungarytoday.hu. Archived from the original on 22 February 2019. Retrieved 22 February 2019.
- ^ "IIB acquires the historic Lánchíd Palota building for its headquarters in Budapest". International Investment Bank. 25 March 2020.
- ^ a b c "LEAKED FILES REVEAL PANIC AT RUSSIAN-LED BANK IN BUDAPEST". 13 March 2023.
- ^ "Czechs call on EU allies to quit Soviet-era banks, citing security". Reuters. 25 February 2022.
- ^ "Romania to close its airspace to Russian airlines-govt spokesman". Reuters. 26 February 2022.
- ^ "Parliament Terminates Bulgaria's Membership in International Investment Bank, International Bank for Economic Co-operation". www.bta.bg. Retrieved 10 February 2023.
- ^ "Leaked files reveal panic at Russian-led bank in Budapest". 31 March 2023.
- ^ "Budapest-based Russian 'spy bank' faces bankruptcy". 28 February 2023.
- ^ "IIB Board of Governors meeting: important decisions and new perspectives". 30 January 2023.
- ^ "'Spy bank' relocates from Hungary to Russia after U.S sanctions". 19 April 2023.
- ^ "Hungary quits Russian-controlled investment bank in Orbán U-turn". 13 April 2023.
- ^ a b "Hungary quits Russian International Investment Bank at last". 26 October 2023.
- ^ "International Investment Bank (IIB) | Board of Governors". iib.int. Retrieved 22 September 2021.
- ^ "International Investment Bank (IIB) | Board of Directors". iib.int. Retrieved 22 September 2021.
- ^ "International Investment Bank (IIB) | Executives". iib.int. Retrieved 22 September 2021.
- ^ "International Investment Bank (IIB) | Annual Reports". iib.int. Retrieved 22 September 2021.
- ^ "General Information". Retrieved 28 October 2023.
- ^ "International Investment Bank - Hungarian Banking Association".
- ^ a b c d e "The end of emerging Europe's involvement in Russia's 'opaque' development bank". 14 April 2023.
- ^ "Magyarország Kormánya - Government of Hungary". 13 April 2023.
- ^ "Spy accusation scandal breaks out over IIB's move to Hungary". 21 March 2019.
- ^ Apuzzo, Matt (18 March 2019). "Hungary Rolls Out Red Carpet for Obscure Russian Bank, Stoking Spy Fears". The New York Times.
- ^ Seddon, Max (26 March 2019). "Russian development bank's move to Hungary causes alarm". Financial Times.
- ^ "U.S. Senators see security threat in Russian bank's move to Budapest". Reuters. 26 September 2019.
- ^ "Magyarország kilép a Nemzetközi Beruházási Bankból". 13 April 2023.Magyarország Kormánya - The Government of Hungary
- ^ "Russia-related Designations; Issuance of Russia-related General Licenses and Frequently Asked Question; Revocation of Russia-related General License". 12 April 2023.
- ^ "Significant fact - Notice to Bondholders, Creditors and Clients". 25 May 2023.
- ^ "An alarm signal. Five Pilon II private pension funds have 350 million lei locked up at the Russian-controlled International Investment Bank. The bank failed to repay two loans on October 7 and 19. Funds: "I turned to lawyers"". 19 October 2023.
- ^ "Romania seeks to unfreeze IIB assets blocked by the US but claimed by local investors". 20 October 2023.