Leaked: the Hungarian and Ukrainian governments are already being softened in the matter of listing the OTP

RockedBuzz
By RockedBuzz 6 Min Read

It was also blamed that a number of other European companies, such as the Austrian Raiffaisen banking group, were added by the Ukrainians to the list of international sponsors of the war, but their member states do not show such behavior in unrelated matters, thus in the case of the 11th EU sanctions package and the payment of the peace framework. EU officials have indicated that they are working to resolve the matter, among other things they are trying to find out whether Kiev blacklisted the entire OTP Bank Group or only its Russian subsidiary.

All this was said after, as we wrote in detail: Hungarian Minister of Foreign Affairs and Trade Péter Szijjártó announced yesterday:

As long as the Ukrainians do not remove the OTP from the list of international sponsors of the war, Hungary obviously cannot take part in decisions related to the European Peace Framework and sanctions.

In addition, the head of the ministry listed three other reasons behind the blocking Hungarian attitude, but among them he clearly called the Ukrainian step related to OTP Bank the most important.

The whole affair began when, on May 4, the Ukrainian National Corruption Prevention Agency (NAZK) announced that it had placed the Hungarian OTP Bank Group on the list of “international war sponsors”, because of which the financial institution continues to cooperate with Russia. The fact of the qualification was also confirmed by the OTP Group, emphasizing that the OTP Group operates in compliance with all international sanctions measures and local legal regulations in all its markets, including in Russia.

NAZK justified its decision in its press release by saying that the Hungarian bank continues to operate in Russia and acts according to the provisions of a lending law, the subjects of which are the Russian authorities of Donetsk and Luhansk counties. According to NAZK, OTP “provides loans under favorable conditions to members of the Russian army”, including the possibility of payment deferment during loan repayment.

It is worth noting that by the beginning of May, the NAZK’s list of “international war sponsors” included 24 institutions together with the OTP, including companies such as Procter&Gamble, OpenWay Group, Danieli, TMS Tankers, Minerva Marine, Thenamaris Ships Management, Delta Tankers, Dynacom Tankers Management, Leroy Merlin, ComNav Technology, Mondi Group/ Mondi PLC, eKassir, Liberian International Ship & Corporate Registry, Bonduelle, Auchan, Peninsula Petroleum and the Austrian Raiffeisen banking group. However, the EU member states of these companies did not indicate that they would block the decision-making of EU sanctions or the upcoming payment from the European Peace Framework.

After the above, OTP Bank issued a statement on May 13, in which it called it “completely unworthy” that the Ukrainian Anti-Corruption Agency (NAZK) classified it as one of the international sponsors of the war. In addition, he also recorded that he will try to convince the Ukrainian authorities of this as well.

The Hungarian bank believes that the main reason for NAZK’s wrong decision was that they mixed up a settlement called Donetsk in Russia.

In the statement, OTP pointed out that until recently there was indeed an OTP Bank branch in the Russian settlement of Donetsk, but it is believed that Oleksandr Dubinszki, who reported the bank to the Ukrainian authorities, may have confused this with the Donetsk region of Ukraine, where the bank does not operate.

In response to the accusation related to the financing of the Russian army, OTP Bank emphasized in its announcement that it does not provide new loans to the members of the armed forces of the Russian Federation, neither at a discount nor in any other way. But they reminded me that the law of the Russian Federation (106-FZ) requires all financial service providers to be exempt from loan repayment and interest payments until December 31, 2023 for those participating in the “special military operation”. After the deadline, repayment will continue.

They also remind that the bank has a market share of 0.17 percent in Russia, that is, its weight on the Russian banking market does not reach two thousandths. With this, he wanted to deny the accusation that OTP Bank plays an important role in the national economy of Russia. Added: however, international banks and other companies with a significantly larger local presence than OTP were not included in the NAZK list, which in itself called into question the credibility of the decision to be included in the list.

After all this, now, seeing the reactions of the Hungarian government, a leading EU diplomat told the news agency:

We will talk to the Ukrainians and we will talk to the (EU) member states, including Hungary. Our priority is clear – to help Ukraine win the war. This requires military and financial assistance. This is an absolute priority for the European Union.

Cover image source: Portfolio

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