International Investment Bank

International Investment Bank (IIB) is a multilateral development institution with headquarters in Budapest, Hungary.[1] It was established in 1970 and operates as an international organisation based on the intergovernmental Agreement Establishing the International Investment Bank dated 10 June 1970, registered with the United Nations Secretariat on 1 December 1971 under number 11417, as amended and restated from time to time.[1]

International Investment Bank
TypeInternational financial organization
FoundedJuly 10, 1970 (1970-07-10)
Headquarters
Budapest, Hungary
Key people
Nikolay Kosov
(Chair)
Total assetsEUR 1720 million
Total equityEUR 2 billion (paid in capital EUR 378,71 million)
ParentComecon (1970–1991)
Websitewww.iib.int/en

IIB specialises in medium- and long-term financing of projects aimed at supporting the economies of its members that would have a significant positive social, economic and environmental impact. IIB offers direct financing and provides loans in partnership with other Financial institutions as well as through partner banks.[1]

Member states

Current members[1][2]

Former members

The IIB statutory documents allow for the admission of either Sovereign states or international organisations as members.

Management

The Board of Governors is the Bank's supreme collective governing body, consisting of representatives from the IIB's member states.[3] The board of directors is responsible for the general management of the Bank.[4] The Bank's executive body is the Management Board, whose members are appointed by the Board of Governors.[5] The Bank's activities are controlled by the Audit committee, which is made up of representatives from the IIB's member states appointed by the Board of Governors. The Bank's Financial statements are confirmed by a half-year compliance Audit review and an annual audit conducted by international auditors EY.[6]

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"[7] for Russian intelligence operations and spy activities against the European Union.[8] This claim is supported by the fact that the bank's chief Nikolai Kosov’s has close ties with Russian intelligence agencies, and that his father was a KGB top operative in Budapest in 1970s, while his mother was described as “one of the most extraordinary spies of the 20th century”. Kosov has rejected this claim.[9] 

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.[10]

History

Soviet era

The agreement establishing the IIB was signed by the member states on 10 July 1970 and registered with the UN Secretariat under number 11417. The Bank began its activities on 1 January 1971. The member states of the Bank at the time of its foundation were: the People's Republic of Bulgaria, the People's Republic of Hungary, the German Democratic Republic, the Mongolian Democratic Republic, the People's Republic of Poland, the Socialist Republic of Romania, the Union of Soviet Socialist Republics, and the Czechoslovak Socialist Republic.[1]

Post-Communist era

In 2019, IIB relocated its headquarters from Moscow, Russia to Budapest, Hungary.[11][12]

Following the 2022 Russian invasion of Ukraine, the Czech Republic announced it would speed up its planned departure from the IIB,[13] and Romania started the process to withdraw as well.[14]

References
  1. "International Investment Bank (IIB) | General Information". iib.int. Retrieved 22 September 2021.
  2. "International Investment Bank - Hungarian Banking Association".
  3. "International Investment Bank (IIB) | Board of Governors". iib.int. Retrieved 22 September 2021.
  4. "International Investment Bank (IIB) | Board of Directors". iib.int. Retrieved 22 September 2021.
  5. "International Investment Bank (IIB) | Executives". iib.int. Retrieved 22 September 2021.
  6. "International Investment Bank (IIB) | Annual Reports". iib.int. Retrieved 22 September 2021.
  7. "Spy accusation scandal breaks out over IIB's move to Hungary". 21 March 2019.
  8. Apuzzo, Matt (18 March 2019). "Hungary Rolls Out Red Carpet for Obscure Russian Bank, Stoking Spy Fears". The New York Times.
  9. Seddon, Max (26 March 2019). "Russian development bank's move to Hungary causes alarm". Financial Times.
  10. "U.S. Senators see security threat in Russian bank's move to Budapest". Reuters. 26 September 2019.
  11. "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.
  12. "International Investment Bank moved into Chain Bridge Palace".
  13. "Czechs call on EU allies to quit Soviet-era banks, citing security". Reuters. 25 February 2022.
  14. "Romania to close its airspace to Russian airlines-govt spokesman". Reuters. 26 February 2022.
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