Category: Hungary

Former Dentons Counsel Akos Mates-Lanyi has joined Taylor Wessing’s Budapest office as a Partner in the firm’s corporate, M&A, and capital markets teams.

Before joining Taylor Wessing, Mates-Lanyi was with Dentons as a Counsel between 2024 and 2025 and an Associate between 2014 and 2015. Earlier, he was with Noerr as its Head of Transactions and M&A between 2018 and 2024. Earlier still, he was with Kinstellar as a Managing Associate between 2015 and 2018 and a Counsel in 2018, as well as with DLA Piper as an Associate between 2008 and 2014.

“Akos’ appointment is a huge boost for our firm,” said Managing Partner Torsten Braner. “We look forward to working with such an experienced corporate lawyer who has significant experience in corporate transactions, including M&A, private equity transactions, divestitures, joint ventures, corporate finance, restructurings, and capital markets transactions.”

“I am very grateful for the opportunity to join the Taylor Wessing Budapest team,” added Mates-Lanyi. “I am full of ideas, motivation, and enthusiasm to successfully tackle future challenges and make a valuable contribution to the firm’s development and long-term success.”

On December 20, 2024, Hungary has enacted two new cybersecurity laws, namely the Act No. LXIX of 2024 on Hungary’s Cybersecurity (“2024 Cybersecurity Act“), which replaces the former national implementation of the NIS2 Directive, and the Act No. LXXXIV of 2024 on the Resilience of Critical Entities (“The Act on the Resilience of Critical Entities”), re-implementing Directive (EU) 2022/2557 on the resilience of critical entities in Hungary.

Key Changes and Implications

1. The 2024 Cybersecurity Act

The 2024 Cybersecurity Act repeals the 2023 Cybersecurity Act and Act L of 2013 on the Electronic Information Security of State and Municipal Bodies, establishing a unified framework for both public and private sector entities. Lower-level cybersecurity legislation remains unaffected by these changes. The new law will take effect on January 1, 2025.

Expanded Scope

The new law broadens its scope to include additional categories of organizations and entities, focusing on the electronic information systems they manage. It applies to administrative bodies such as government committees, metropolitan and county offices, and municipal representative bodies, excluding administrative associations with regulatory authority. The law also extends to state-owned enterprises exceeding medium-sized thresholds and aligns with EU cybersecurity frameworks (NIS1 and NIS2 Directives). The new law shall designate entities as “essential” or “important” based on their services or data processing functions.

Registration Requirements

Private sector entities previously registered under the 2023 Cybersecurity Act are included in the new framework and do not need to re-register. However, they must submit a list of EU member states where they provide services by February 15, 2025. Any changes in legal status or exceeding the medium-sized enterprise thresholds must be reported to the relevant supervisory authority.

Person Responsible for the Security of Electronic Information Systems [„ISO”]

The new law introduces more detailed requirements for the person responsible for the security of electronic information systems (Information Security Officer – ISO), who must be appointed by the organization’s leader. For private sector entities, this role can only be filled by someone who is legally competent and has a clean criminal record. For public sector entities, the law specifies additional requirements.

Cybersecurity Risk-Management Measures

The 2024 Cybersecurity Act retains the classification approach from the 2023 law, requiring organizations to classify systems and data as “basic,” “significant,” or “high” security classes. These classifications must be reviewed and updated every two years or after regulatory changes or incidents. Entities who have already classified their systems under the 2023 Cybersecurity Act do not need to reclassify them under the new law. The new law also broadens the scope of mandatory cybersecurity audits. Audits must occur every two years or as directed by SzTFH, with fees and procedures defined by a forthcoming SzTFH decree. 

2. The Act on the Resilience of Critical Entities

This new law aims to enhance [NATO] alliance-related duties and national resilience by protecting essential services, securing supply chains, and ensuring government continuity. In that regard, the Hungarian Government shall designate a general competent authority and a competent authority for the energy sector. The competent authorities’ designation procedures under this law must begin by April 30, 2025, reviewing decisions made under Act CLXVI of 2012, which is repealed. Operators designated under the 2012 Act will remain critical entities until final decisions are made. The first phase of the law takes effect on December 30, 2024, and its material provisions start to apply from January 1, 2025.

Practical Considerations

Organizations subject to these laws should:

1. Review Applicability: Confirm whether they are classified as “essential,” “important,” or “critical” entities under the new laws.
2. Update Compliance Measures: Ensure cybersecurity risk management measures are aligned with the new requirements and whether the designated ISO complies with the new requirements articulated by the 2024 Cybersecurity Act.
3. Prepare for Audits: Plan for biennial cybersecurity audits and monitor SzTFH decrees for further procedural details.
4. Submit Required Information: If currently registered, submit the required list of EU member states where services are provided by February 15, 2025.

By consolidating and expanding existing frameworks, these laws reinforce Hungary’s cybersecurity landscape and align it more closely with EU standards. Organizations must act promptly to ensure compliance with the new requirements.

By Tamas Bereczki and Adam Liber, Partners, Provaris

 

Szabo Kelemen & Partners Andersen Attorneys has advised ADEX on the merger of BSP Energy Exchange, HUPX Hungarian Power Exchange, and SEEPEX. Kinstellar and ODI Law advised HUPX and the Hungarian Transmission System Operator Mavir on the deal. Isailovic & Partners advised SEEPEX. Lukman advised ELES and BPS on the deal.

According to BSP Energy Exchange, “as the sole owner of the three exchanges, ADEX will focus on integration efforts to enhance customer experience, maintain stable operations, and support the region’s energy transition.”

“This is a game changer! I am proud and deeply touched at the same time to take part as the vision came true,” commented HUPX/CEEGEX/HUDEX Head of Legal and Compliance Noemi Ujjady.

Earlier in 2024, Kinstellar advised the Hungarian Power Exchange and TSO on the Project Bluesky transaction which saw HUPX join the regional Adex power exchange (as reported by CEE Legal Matters on April 16, 2024). 

The Szabo Kelemen & Partners Andersen Attorneys team included Managing Partner Peter Vincze, Senior Partner Tamas Szabo, Attorney-at-Law Dorottya Rebeka Tarba, and Legal Trainee Julia Csala.

The Kinstellar team included Partners Gabor Gelencser and Peter Voros, Managing Associate Peter Gullai, Senior Associate Aron Barta, and Associates Judit Sos and Orsolya Staniszewski.

The ODI team included Partners Tine Misic and Primoz Mikolic, Counsel Klemen Erzen, and Associates Milan Stankovic and Eva Hafnar.

The Isailovic & Partners team included Senior Partner Nikola Rodic.

Editor’s Note: After this article was published, ODI Law clarified to CEE Legal Matters that it had in fact advised HUPX and Mavir on the merger, alongside Kinstellar. At the same time, CEE Legal Matters was also informed that ODL Lukman advised ELES and BPS on the deal. The article was updated to reflect this.

In November 2024, multiple sources reported that the Hungarian government is considering the introduction of significant construction regulations in 2026, based on a leaked draft.

A key element of the plan involves the creation of a new database called the National Construction Industry Register (abbreviated as NÉNY in Hungarian). This database would require manufacturers, traders, and contractors to submit detailed data on building materials, aiming to enhance transparency, streamline supply chains, and strengthen the overall resilience of the construction sector. If implemented, these regulations could bring substantial changes to the building materials market, particularly in terms of supply security for the construction industry and the management of strategic building materials.

The proposed regulations could significantly impact the building materials market, particularly in ensuring supply security and managing strategic materials. However, the concept of NÉNY is not new. The creation of this database was outlined in the already adopted Act C of 2023 on Hungarian Architecture. With the legal foundation in place, the focus has shifted to implementing government decrees now taking shape.

Business Concerns and Regulatory Implications

While NÉNY aims to centralize critical data: domestic production, prices, technical specifications and stakeholders, the business community is wary of the documentation burden and the state’s expansive oversight. The database could require billions of forints in IT investments. Foreign firms are particularly concerned about potential regulatory measures, such as export bans and state first-refusal rights on strategic materials or even production facilities. The Ministry of Construction and Transport has acknowledged that these measures could be included in the regulations, but clarified that existing laws already permit such interventions. For example, the state can currently ban the export of strategic materials for up to one year to safeguard supply security. Additionally, under certain conditions, such as extreme price increases or production disruptions, the state has a right of first refusal on strategic materials.

Experts note that while these powers are intended for emergencies, the question is whether the permanent Hungarian emergency situation can already be a reason for preemption. Because, if so, it is not viable for Hungarian companies to trade in the future by waiting for a month after their contracts to see whether they can sell the product or whether the state will demand it.

Potential Impact on Strategic Production Facilities

The leaked draft also suggests that the state may extend its right of first refusal to the sale of production facilities. Owners of strategic material producers would need to offer their assets to the state first, a measure seen in other sectors that often devalues companies by discouraging buyers wary of wasted due diligence efforts.

Industry Consultation and Outlook

The Ministry has been in discussions with various professional organizations, including the National Association of Hungarian Building Contractors (ÉVOSZ), the Hungarian Chamber of Engineers, the Hungarian Chamber of Architects, and the Nonprofit Association for Quality Control in Construction (ÉMI). Although the draft has not yet been formally discussed at a government meeting and does not reflect the official stance, if implemented, it could reshape the building materials market in several significant ways.

By Denes Glavatity, Attorney-at-Law, KCG Partners Law Firm

CMS has advised Tozsdepalota on its sale of the Tozsdepalota Building. DLA Piper advised the buyers, Granit Asset Management.

According to CMS, the Tozsdepalota Building is a historic landmark in the heart of Budapest.

The CMS team included Partners Gabor Czike and Jozsef Varady and Senior Associate Zsofia Zsurzsa.

The DLA Piper team included Counsel Tamas Balogh, Senior Associates Aniko Edit Szucs and Gyorgy Boros, and Junior Associate Tamas Beres.

CMS has advised Egis Pharmaceuticals on its acquisition of a dermatological product line from Teva Pharmaceutical Industries. Bird & Bird reportedly Teva.

According to CMS, “the acquisition holds strategic significance for Egis, a Hungary-based pharmaceutical company with a legacy spanning over 110 years. This move aims to solidify its position in the Hungarian over-the-counter market while expanding its portfolio of locally applied dermatological products.”

The CMS team included Partners Eszter Torok, Dora Petranyi, and Szabolcs Szendro, Senior Counsel Veronika Kovacs, and Senior Associates Aranka Nagy and Miklos Boros.

The Bird & Bird team included Partners Pal Szabo and Balint Halasz, Senior Counsel Ferenc Matrai, Counsel Daria Szabo, and Associate, Adel Gelencser.

A bill on the amendment of certain energy-related laws was submitted to the Hungarian Parliament at the end of October 2024. Among others, the bill would amend the following laws from 1 January 2025: the Mining Act, the District Heating Services Act, the Electricity Act, the Environmental Product Charges Act and the Waste Act.

The amendments to the Electricity Act would make the operation of the electricity system more transparent and efficient, enable network licensees to perform certain mandatory tasks more easily and efficiently, increase the predictability of medium and high voltage capacity and ensure that investors can benefit from a transparent procedure while policy objectives are met, and ensure greater compliance with EU requirements.

The amendment to the Environmental Product Charges Act aims to reduce the double administrative burden on the products subject to both the product charge system and the extended producer responsibility system by narrowing the scope of products subject to the product charge. Based on the amendments, batteries, packaging, electrical and electronic equipment, tires, advertising paper and office paper are no longer considered products subject to product charges.

The current double administration is an unnecessary burden and therefore the maintenance of an environmental product charge for products that are also covered by the extended producer responsibility scheme is unjustified. The amendment to the Environmental Product Charges Act will reduce the administrative burden for both the obligated parties and the State tax authority by removing the administrative obligations of the obligated parties under the product charge regime for products that are no longer subject to the product charge.

The main objectives of the amendment to the Waste Act are to facilitate the eradication of abandoned waste, simplify administrative procedures and clarify accounting obligations.

By Lidia Suveges, Attorney at Law, KCG Partners Law Firm

1,111 complaints have been submitted to the Constitutional Court of Hungary by domestic solar panel users, who argue that the change in the balance accounting system is causing them significant financial disadvantages. Specifically, the amendment introduces a monthly gross settlement after 10 years of solar panel installation.

The essence of balance accounting is that only the difference between the electricity consumed from the grid and the electricity produced by the solar panel and fed into the grid during the accounting period is accounted for. Private households installed solar panels on their roofs under the assumption that these would cover their annual electricity consumption and help avoid high electricity bills.

The complaints state that switching to gross monthly billing is disproportionate and disadvantageous for them, since a significant portion of the energy produced by solar panels during sunny months is not immediately used and is instead sold to MVM (MVM Energy Private Limited Liability Company), typically at a very low price (5 HUF/kWh). In the less sunny months, solar panel production is lower than consumption, and electricity must be purchased at a price several times higher (currently a feed-in tariff of 36 HUF/kWh) than the purchase price offered by MVM. Gross metering means that households cannot simply “offset” the excess energy produced in summer, as was possible with balance metering.

The Ministry of Energy believes that no fundamental rights have been violated in this case. According to an EU regulation, new applications for connection licenses with annual balancing accounts will not be accepted from 2024, so the amendment was deemed necessary. The Ministry added that the solar panel system would recover its cost within 10 years, so the amendment would not jeopardize its financial return. The Constitutional Court acts according to the rules of the so-called “leading decision” procedure, meaning that the decision in the selected case will automatically apply to other complaints. The draft decision is being prepared, but no information is available on when the Constitutional Court will issue its ruling.

By Lilla Majoros, Attorney at law, KCG Partners Law Firm

Hungary is gearing up for a groundbreaking shift in corporate governance, with the proposed law aimed at improving gender representation in leadership positions at publicly traded companies. By implementing the relevant EU directive, the proposed law does not only seek to address long-standing gender imbalances but still promotes greater access of women to the labor market participation.

The legislation targets supervisory boards in public limited companies where women occupy less than 49% of the positions. To ensure compliance, companies must achieve a minimum 40% representation of the under-represented gender in supervisory boards by mid-2026. While smaller businesses, including micro and medium-sized enterprises, are exempt, larger corporations face significant accountability measures. Key provisions of the law require companies to overhaul their recruitment and selection processes. Candidates must be evaluated based on objective and transparent criteria such as qualifications, skills, and experience. In cases where candidates are equally qualified, preference must be given to the underrepresented gender.

To maintain accountability, affected companies must file annual reports each year by 30 June, detailing the gender breakdown of their boards and the actions taken to achieve the mandated targets. These reports will be submitted to the Registry Court of the company, and to the Budapest Stock Exchange, which information shall also be publicly available on the websites of the companies. The Budapest Stock Exchange will also publish by 31 July each year an annual list of companies that meet the requirements, encouraging transparency and public oversight. The above should also be duly indicated in the corporate governance statement of the company. Those failing to comply must explain their shortcomings and provide corrective actions.

As the implementation deadline approaches, all eyes will be on the companies tasked with turning this vision into reality and on the ripple effects this progressive change may unleash across the economy. This legislation is a huge milestone for women in the labor market, as it underscores the importance of gender diversity in decision-making by improving the gender balance on boards of public limited companies. The proposed law, if accepted, is expected to come into effect on 28 December 2024.

By Levente Csengery, Partner, KCG Partners Law Firm

The Hungarian Parliament is debating several major laws at the end of 2024, including amendments to the Act on the election of the Members of the Parliament (‘Election Act’), another amendment to the Fundamental Law of Hungary and new rules on hate speech.

As Hungary approaches the parliamentary elections of 2026, the need has arisen to amend certain provisions of the Election Act, in particular the constituencies. The reason for this is that, under the relevant legislation, the number of eligible voters in each constituency cannot differ by more than 15% from the arithmetic average of all constituencies in the country. Given the significant changes in the population of each constituency since the last election, this amendment is necessary. On this basis, the most significant change is that there will be 2 fewer single-member constituencies in Budapest and 2 more in Pest County in the 2026 elections.

Following the lessons learned from the 2024 mayoral election, it will be included in the law that if the result is closer than 0.5%, the votes will be recounted automatically. Another important change is that voters no longer need to carry their address cards with them to vote.

Under a recently published bill, a person who writes a comment expressing an intention to commit a specific act of violence (especially violent death of other(s)) would be punishable by up to one year’s imprisonment. According to the proposal’s explanatory memorandum, it would be outside the scope of freedom of speech to make comments that incite hatred against others and/or advocate the violent death of others. In this context, press products available on the internet would be obliged to draw up a policy (as long as they also provide a commenting facility) and filter these comments on that basis.

Finally, another amendment to the Fundamental Law of Hungary is under discussion, which would allow a person who is not a prosecutor to be elected as Attorney General.

By Bálint Éberhardt, Attorney at Law, KCG Partners Law Firm