This chapter examines how the sanctions imposed on Russia after its 2022 invasion
of Ukraine have impacted Russian firms, their direct investment abroad, and Hungarian
business presence in Russia, and, in particular, how Russian and Hungarian firms have
adjusted to this new reality. It highlights the main commonalities, such as the difficulties
of access to finance transactions and the interruption of logistics and supply chains,
especially in the areas of technology goods. The chapter also looks at the main differences
between Russia and Hungary. In Russia, large firms with exposure to the West have
been facing major difficulties in their international operations and have focused
their efforts on mitigating the effects of sanctions. On the other side, Hungarian
firms investing in and/or exporting to Russia 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 sanctions
and countersanctions. 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.
