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Weiner Csaba: Венгерский бизнес в России в условиях санкций … / Hungarian business in Russia under sanctions


Венгерский бизнес в России в условиях санкций и контрмер 2022 года: опыт первых шести месяцев

Hungarian business in Russia under sanctions and countermeasures 2022: The experience of the first six months

Author: Csaba Weiner


In: Вишеградская Европа [Visegrad Europe], 4(2), 24-33. (2022)


This article assesses how Russia’s 2022 military operation in Ukraine has impacted Hungarian companies investing in Russia, and how they have adjusted to this new reality. The paper first briefly describes Russia’s role in outward foreign direct investment (FDI) from Hungary and the main Hungarian-based FDI-investing companies and their subsidiaries in Russia. It then examines the difficulties Hungarian business is facing in the Russian market, and, through short case studies, how the three leading Hungarian players – the OTP Group in the banking sector, the pharmaceutical company Richter, and the oil and gas firm MOL – have reacted to such challenges. The paper finds that Hungarian firms typically try to hold their ground in the Russian market. They are attempting to overcome difficulties such as risks of foreign exchange and non-payment, issues with logistics and supply chain disruptions, problems with banking and financial transactions, increased time and costs of international shipping due to altered routing, additional administrative burdens at the border, air travel restrictions, and a constant need for information to adapt to Western sanctions and Russian countermeasures. It is uncertain whether the generally positive attitude of Hungarian firms towards staying (and even taking advantage of the situation to expand further) will change over time. The challenges may become too great to take on, not only for smaller, resource-poor, and less-experienced firms, but also for stronger enterprises. Each of the three largest Hungarian-based FDI investors in Russia is taking a different approach to the situation, but they are standing their ground, despite sanctions, countermeasures, and outside political pressure to discontinue business with Russia.