Weekly newsletter

OTP Being on Ukraine’s War Sponsors List Is a Disgrace, Says Foreign Minister

Hungary Today 2023.07.05.

Hungary will not contribute to any further EU funding of arms transfers to Ukraine until Kiev removes Hungarian OTP Bank from their list of international sponsors of the war, Minister of Foreign Affairs and Trade Péter Szijjártó stressed. He also described it as ‘outrageous, unacceptable, and scandalous’ that the Ukrainian authorities have included the largest Hungarian bank, where roughly three million people have accounts, on this list for untrue and ridiculous reasons.

“We do sometimes get the feeling that we are being played, but we do not say it more often because there is a war going on in the neighborhood, and in such situations you have to be careful about the expressions you use,” the Foreign Minister said.

“But the fact that we are doing everything we can to help the Ukrainian people, that the Hungarian people are paying the price for a war they had nothing to do with, and the reaction to this is that the biggest Hungarian bank is being put on a list of shame, is more than enough,”

he stressed.

Reacting to the Ukrainian arguments about the listing of OTP, Péter Szijjártó said that he did not know whether to laugh or cry. “We would like to laugh, because these are ridiculous things that are being said, but because the situation is serious, we are  instead horrified,” he underlined.

“So, our position is clear: as long as OTP is not taken off this list, Hungary will not contribute to any further EU funding for arms transfers to Ukraine,”

he emphasized. “Not only will we not contribute to the €500 million that we have stopped, but they better not come forward with any proposal for financing further arms transfers,” he added.

The list of international war sponsors was compiled by Ukraine’s National Agency on Corruption Prevention. OTP Bank is on the list because the Ukrainian authorities say the bank continues to cooperate with Russia. One of the arguments is that according to information available on financial results, the Russian subsidiary bank of OTP “made a profit of 113 million roubels in 2020, and paid a colossal amount to the aggressor country’s budget – about 190 million roubels in income tax.” The anti-corruption agency says that “as it became known from the mass media, the bank also provides preferential credit terms to the Russian military.”

Zoltán Lomnici Jr., a constitutional lawyer, points out in his article in Magyar Nemzet that the Ukrainian authority’s argument is flawed on several points. As he wrote, OTP’s Russian subsidiary bank has only a 0.17 percent market share in Russia, so its market weight is overstated. He also pointed out that there is a settlement in the internationally recognized territory of Russia called Donetsk, which could be confused with the Ukrainian city of Donetsk. In addition, he wrote that

OTP does not lend to members of the armed forces of the Russian Federation, preferentially or otherwise, and its activities comply with the terms of international sanctions.

Ukraine's Relations with Hungary Should Improve in Exchange for Further EU Funds
Ukraine's Relations with Hungary Should Improve in Exchange for Further EU Funds

Hungary still opposes the next tranche of the European Peace Facility financing arms shipments to Ukraine, because Kiev has still not removed the Hungarian OTP Bank from their list of international war sponsors.Continue reading

The constitutional lawyer also drew attention to the fact that the specific legal sanctions (i.e. adverse legal consequences) for being on the list are not clear, and although the term “sanctions list” is used in the national public discourse, in fact, according to the official information of OTP, the official wording is “candidate for sanctions.” He noted that

in practice, investors did not care which list the bank was on or not; they continued to buy OTP shares persistently, and by the end of the spring the OTP shares’ price had reached a high not seen since February.

He also pointed out that several scandals have emerged around the Ukrainian authority in recent years. For example, in April 2020, the director of the agency said that President Zelensky had the right to keep secret the expenses of his holiday in Oman accompanied by state security. In November 2017, a head of department at the agency, Hanna Solomatina, made incriminating statements, saying that the body was fully controlled by the presidential administration, and was used to hunt down disaffected politicians, to cover up for officials loyal to the government and falsify facts during Poroshenko’s presidency. The use of the agency as a fact-faking and political “liquidation tool” was still under investigation years later.

Ukraine Refuses to Remove OTP Bank from "Sponsors of War" List
Ukraine Refuses to Remove OTP Bank from

The Hungarian government has repeatedly asked for the removal of OTP bank from the list on several platforms.Continue reading

Featured photo via Facebook/Péter Szijjártó

    [1536x1536] => Array
            [width] => 1536
            [height] => 1536
            [crop] => 

    [2048x2048] => Array
            [width] => 2048
            [height] => 2048
            [crop] =>