In the shadow of official cooperation, there are reasons to believe that corruption ties and interdependencies between Moscow and Budapest are strengthening. The official version is about deepening trade and economic cooperation, but behind the scenes, a separate channel is being created for Russia to avoid international sanctions, in which the OTP Bank, controlled by Hungarian Prime Minister Viktor Orbán, and a network of related companies in the agricultural sector play a key role, writes geopolitic.info.
The recent meeting between Hungarian Foreign Minister Péter Szijjártó and Russian Minister of Industry and Trade Denis Manturov in Moscow on March 26 was another confirmation of the strengthening of bilateral cooperation in a number of areas.
Hungarian business in general and the OTP Bank Group in particular are not left the market of the country recognized by the EU as guilty of unprovoked armed aggression after the start of the full-scale invasion of Ukraine by Russian troops and the serious tightening of Western restrictions against Russia. Moreover, despite the complications caused by international sanctions, Hungarian companies are actually increasing their revenues on the Russian market year after year. In 2024, for example, OTP Bank increased its net profit in Russia by 40% to 372 million USD.
OTP Bank is one of the most popular financial institutions in Russia among servicemen of the Russian army, who receive consumer loans with preferential interest rates (specially reduced by the bank management for the Russian military).
The Russian branch of OTP Bank participates in the activities and development of the Russian military-industrial complex, since a number of strategically important enterprises related to the Russian military-industrial complex have opened accounts in this Hungarian financial institution. “Okskaya Shipyard“ („Okskaya Shipyard“ in Navashino) produces PP-91 and PP91m pontoons for the Russian Armed Forces, and „ASM-Service“ (St. Petersburg) supplies metalworking, measuring and other equipment to various Russian military-industrial complexes.
The Scientific and Production Association „Zavod Volna“ („Zavod Volna“ in St. Petersburg) is a leading Russian company in the development, production, modernization and repair of communication and radio-electronic equipment. Salaries of employees of „Zavod Volna“ are accrued and paid through the Russian branch of OTP Bank.
The capabilities of the aforementioned Hungarian bank are used by „All-Regional Association Izotope“ (Moscow). This company supplies various isotope and chemical products to numerous enterprises of the Russian military-industrial complex. Products „Isotope“ are regularly supplied to „Federal State Unitary Enterprise Mayak“ (Ozersk), which produces components for nuclear weapons.
Formally, reciprocal agreements for the supply of agricultural and pharmaceutical products are concluded through the OTP Bank branch in Russia. Classified reports indicate that this is a „hidden mechanism“ for financing Russian orders for dual-use goods (components for the defense industry, spare parts, etc.).
„The shadow mechanism“ works as follows: the structures of the Russian Federation transfer funds to the accounts of Hungarian companies that officially trade in livestock, poultry, feed and medicines. Hungarian companies linked to the OTP banking group and those linked to Hungarian political leaders then transfer some of the funds back to Russia in the form of investments, using inflated prices, fictitious contracts and inflated invoicing.
Offshore accounts accessible to Viktor Orbán’s inner circle receive another part of the funds from the aforementioned “shadow mechanism“. Thus, Russia not only successfully buys the goods it needs through sanctions, but also finances a loyal political regime in Hungary, which, as a member of the EU and NATO, effectively blocks all initiatives to help Ukraine.
In addition to financial schemes and deals, well-established logistics routes between Hungary and Russia play an important role. Under the guise of supplying medicines, Hungarian pharmaceutical companies (Gedeon Richter and others) smuggle “double bottom“ goods (from chemical components to electronics) into Russia. In return, Hungarian agribusinesses supply meat products to Russia and send equipment to modernize food and biotech enterprises, which can be converted for military use.
Moscow rewards Budapest with direct investments in the Hungarian economy, especially in the automotive, agricultural and agro-industrial sectors, for the operation of the aforementioned “shadow mechanism“.
Another interesting episode is the attempt of Orbán's son-in-law, István Tiborc, to acquire the Russian branch of Raiffeisen Bank International. It is important to note that István Tiborc was proposed by the Russian side, which is an indication of the desire to place the bank in the hands of a loyal investor capable of acting in the interests of the Kremlin. Negotiations are currently underway between István Tiborc and the RBI governor, the government, the Russian central bank and the Kremlin.
A number of companies supplying services and goods to the Russian military-industrial complex have opened accounts in the Russian branch of RBI (as well as in OTP Bank). Key companies from the Russian military-industrial complex such as “Almaz“, “Vostok“, “Rubin“, “Sodicom-Center“, “Zvezda“ and “Polyus“ use the RBI to settle their transactions. The Russian branch of the RBI has agreed to open accounts for those serving in the Russian armed forces.
Here's how the Kremlin managed to turn Hungary into its own hybrid base within the EU and NATO.