Category: Hungary

On 24 June 2020 the European Council amended Directive 2011/16/EU, in order to defer certain deadlines for filing and exchanging information under the Directive on Administrative Cooperation (“DAC”). The postponement is justified by the difficulties Member States and businesses are facing with during the pandemic.

Based on the Commission’s proposal, the Council has decided to give three extra months to the Member States to exchange information on the financial accounts of beneficiaries who are tax residents in another Member State. Similarly, Member States have six additional months to exchange information on certain cross-border tax planning arrangements. The Commission has also proposed to preserve the possibility of the extension of the deferral period. The above mentioned amendments only affect the deadlines applicable for reporting obligations.

The Council and Commission acted due to the Coronavirus crisis that caused extra burden on Member States. Nevertheless, the Council and Commission are still committed in the fight against the tax evasion and avoidance.

By Gabriella Galik, Partner, KCG Partners Law Firm

A CEELM Profile of Daniel Szabo, Central Europe Team Lead at Hewlett Packard Enterprise in Budapest.

Daniel Szabo, who describes himself “a fundamentalist – a serious person with a realistic and subtle approach to life” – was born into a bilingual Hungarian-Russian family in 1981, in Budapest, but as his father was in Hungary’s diplomatic corps, he spent much of his childhood far away from Europe. Now many years into a legal career in his native Hungary, Szabo practices with a combination of intellect, commitment, and focus. 

Growing Up Abroad

Szabo’s first experience outside of Magyarorszag came in the mid-1980s, when he spent four years with his family in Mongolia, which he recalls as “grey,” but remembers fondly. Altough he was young, he recalls attending a Soviet kindergarten in Ulaanbaatar and travelling around the Asian country with his parents and sister Daria in an old Land Rover the family had bought with a friend at an auction of the British Embassy.

After a few years back in Hungary, in 1992 the family moved to Nigeria, then – as now – Africa’s most populous country, with one of the continent’s largest economies. “The Hungarian embassy and the diplomats’ homes were in an old run-down building, but the location was great,” Szabo recalls. “Just on the shores of Lagos lagoon with a nice view of the water and the container ships sailing towards the city’s commercial port, as well as the Hobie Cat regatta.” Still, not everything there was idyllic. His schooling in Lagos was “an issue,” he says, and, after a year in a Russian school, his parents sent him to the French lycée, as “British or US education was unaffordable and French seemed like a good second language.”

He admits to thinking more fondly of his unusual childhood as it grows more distant in his memory. “I think an expat life, though this term is associated with high status and privilege that Eastern European diplomats did not have, does leave a deep mark on most people, irrespective of age,” he says. “Some don’t like it and don’t have good memories of it. Others might love it and feel nostalgic their whole life. I cannot say that I particularly liked living in Nigeria, but I started feeling very nostalgic as an adult.”

Upset in University

In 1996 Szabo again returned to Hungary, and several years later began attending the prestigious Eotvos Lorand University in Budapest, initially studying both Political Science and Law, before deciding to focus exclusively on the latter. That choice wasn’t easy, ultimately, and some regrets linger. Szabo describes being disappointed to find, in his law studies, a “very outdated curriculum, which hadn’t changed in a hundred years, [and] that law school in Hungary at the time was mostly based on memorizing things.” Indeed, he says, things haven’t changed much since, either: “I think that Hungarian education in general, and legal education is no exception, has a quantity over quality problem and a bias for theory over the practical application of knowledge. We are hopelessly bogged down in this mind-set.”

To this day his frustration lingers, and he admits to some regret that he turned down an opportunity to study in France: “I didn’t go to France to study because I didn’t want to have an immigrant, second-grade citizen experience,” he says. “Especially in practicing law – I didn’t want to stand out with an accent, and have people question me and my competence, because I would never be able to blend in completely.” He says, “in retrospect, I feel that not going to France may have been the wrong choice – that realization came to me when I started practicing law in Hungary. The Hungarian language is not spoken anywhere else and our school isn’t recognized elsewhere.”

Still, Szabo ultimately was able to study abroad, completing his studies in 2006 as an Erasmus student in Berlin. According to him, “German legal training had a far greater emphasis on practical knowledge. They wanted to teach you how to think as a lawyer and solve legal problems. After all, law is a way of thinking, as Professor Paulus of the Humboldt University explained during a lecture that I remember to this day.”

The Professional Step

After graduating in 2006, Szabo joined Budapest’s Nagy es Trocsanyi law firm – at the time a family-owned litigation boutique. He spent a brief six months in what he describes as N&T’s “professional business environment,” working hard to establish himself, and he recalls his excitement at the occasional opportunity to be heard in court.

After seven months at N&T, and eager to learn more about Banking/Finance and M&A work, Szabo moved to the Budapest office of Allen & Overy. Two years later he accepted an offer to move in-house with Magyar Telekom, where, he says, he was tasked with “overseeing, from a legal perspective, (i) the M&A transactions of Magyar Telekom Group and (ii) the key legal affairs of the Group’s foreign subsidiaries.”

He immediately knew he had made the right choice, and left private practice in the rear-view mirror permanently. “As a result of the roughly three years that I spent in the two law firms I understood that my strengths lie outside of what is required in a firm, which ultimately is an ability to build a business or become a black belt niche expert,” he recalls. “An in-house career, on the other hand, requires a somewhat different skill set and offers perhaps more fluidity: ease of navigating cultures, businesses, seeing legal problems in the wider context, bridging gaps and collaborating across functions, innovating and adapting fast.”

In 2013, after five years with Magyar Telekom, Szabo learned of an open position at Hewlett-Packard. He leapt at the opportunity – a move he describes as his “best career development decision” – and in January 2014 he became Country Counsel for Hungary, immediately feeling at home. “HP offered what I needed in terms of the next building block in my career, overseeing the legal affairs of a country operation event if that essentially meant a sole counsel position. Although HP Hungary was and still is a much smaller operation than MT I still consider this experience very valuable. Being a small unit in a big multinational has its advantages. A closer integration into the fabric of the company provides you with more international opportunities. I can say that by now most of my work is related to matters outside of Hungary.”

The role also provided him with the leadership position he wanted, allowing him to mentor people and teach them the values of sacrifice and hard work he had long prized. Hewlett-Packard obviously realized his value as well, and quickly moved him up the ladder: In 2016 he became Country Counsel Hungary & Azerbaijan; in 2017 South-East Europe Counsel; and in January 2019 he assumed his current position as Central Europe Team Lead, coordinating the legal department’s work in the Czech Republic, Hungary, Poland, Slovakia, and Romania.

He declares himself content at HP.  “HP is a company that invests in you and gives you new challenges,” he says. “All of that doesn’t happen overnight, of course, but it does eventually.  Here, you can try different tasks, and there are plenty of opportunities. The company is financially mindful and constantly tries to motivate its employees. All in all, it’s an inspiring environment, and a good one to be in.”

He says he now finds it difficult to imagine himself in another career. “I consider myself lucky,” he says, deflecting a compliment about his rapid ascent at HP. “I have had great employers and managers throughout my career. I have been in-house for more than ten years now and consider this career path a more natural fit than private practice, which I experienced only briefly.”

And his peers – including Hewlett Packard Country Counsel for Poland, Maja Galecka-Wasowicz – agree he’s in the right place. “Daniel is a real hard worker, full of passion for his work and his customers,” she says. “He has deep knowledge and a strong will to grow in all kinds of ways, to become a better advisor for his customers and colleagues.” She smiles. “It’s a pleasure to work with him.”

The Home Life

Szabo lives in Budapest with his wife and – with the recent birth of a baby girl making the already-memorable spring of 2020 even more so –  three children. He spends a great deal of his free time with his family, he says, and he enjoys exercising and a recently-rediscovered love for pre-digital photography.

Daniel is not the only Szabo to practice law, as his sister Daria is a Senior Associate at Bird & Bird. In addition, he says, his grandfather earned a degree in law, though he never practiced.

“I don’t have any position or title in mind in terms of what’s next,” Szabo says, modestly. “I enjoy working on international assignments of company-wide significance and hope to be included in more of those going forward.”

This Article was originally published in Issue 7.5 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

On January 1st, 2020, the Hungarian government adopted new legislation making continuing professional education compulsory for lawyers, post-qualification, along the lines of post-certification training and education that tax advisors and accountants had been forced to obtain for many years.

With 8,700 members in the Budapest Bar Association, and 16,000 members in the Hungarian Bar Association, achieving the ambitious goal of creating, applying, and administering this system is no mean feat, especially because existing models, in CEE, are few and far between.

The System in a Nutshell

Hungary’s continuing legal education program will work on a point-based system that runs in 5-year cycles. Each year, every member of a Hungarian bar association – whether national or local – must collect a minimum of 16 credit points, and at least 80 points over the 5-year cycle. Credit points are granted to those who attend either virtual trainings (such as e-learning, online workshops, and webinars) or in-person “contact” trainings. Lawyers who are unsuccessful in collecting 80 points in a five-year cycle will have their bar membership withdrawn.

According to the bar’s regulations, each session must be at least 45 minutes long, and when the training is followed by an exam – and that exam is passed – the points are doubled. CMS Budapest, for instance, which has been accredited by the Budapest Bar to provide trainings, is offering 60-minute sessions followed by an exam, which will provide those participants who pass the exam two points. The firm is also offering 90-minute sessions worth four credit points if the exam is successful. Those who fail the exam, by contrast, will only get half of the available credit points.”

In addition, certain trainings completed before the Hungarian rule came into effect on January 1, 2020, can also count towards the single-year and 5-year goals. Thus, lawyers who completed a training after 2018 in a particular specialization or field of law can apply for credit points.

Credit can also be gained from trainings attended abroad; lawyers who participate in foreign courses may apply to the Education and Accreditation Committee of the Hungarian Bar Association to have them accepted and subsequently translated into domestic credit points.

The CLE regulation naturally provides some exceptions, generally for lawyers who have reached a certain level in their career or training or are pursue a particular career path. So, for example, law graduates who are university employees or have degreed in political science or public administration are exempt. Similarly, attorneys who have an LL.M or Master of Law degrees are also exempt, as are those who teach, participate in a two-year public service training, or are aged 75 or older.

How it Works – and Who Works It

The task of designing and implementing the new education system was handed to Geza Reczei, the President of the Educational Committee of the Budapest Bar Association, who previously created and developed education systems for both PwC and Deloitte, as well as the Hungarian Civil Service. Reczei created the CLE system based on those personal experiences, tailoring it to the specific requirements of legal education and making sure to include e-learning that genuinely supports a lawyer’s career. After drawing up a general outline of the system, he then focussed on ensuring that it would use technology that could work across all devices.

According to Reczei, the Budapest Bar Association Education Committee had limited time to work out how to develop, implement, and manage the education program, so it concentrated primarily on creating an e-learning library and a points management system. In parallel, the Hungarian Bar Association started developing an administrative system while also creating educational videos. The two Bar Associations are currently combining the systems.

According to Reczei, a training event can only be organized by an official training provider, i.e., at a regional bar association, an internal training venue, or an external venue with regular accreditation. And the various e-training courses currently available concentrate on general, business operational topics to make sure they are useful for everyone, at this initial stage. More specialized topics are being created, and the Education Committee continues to review and analyze each step as the program develops, watching reactions and responding to feedback.

The Budapest office of CMS plans to provide one training per month, and to curate the training content themselves, with approval from the Budapest Bar Association. “We are trying to contribute to the Budapest Bar’s and Hungarian Bar’s training programs in a meaningful way,” says CMS Budapest Managing Partner Erika Papp. “That is, we try to suggest training topics that are typically within the expertise of an international law firm, such as cross-border financing and other cross-border transactions.”

“The training program, including the choice of topic, has to be pre-approved by the Budapest Bar,” Papp explains, noting that “we have received approval from the Budapest Bar for the trainings to be held in the first half of the year.” She emphasizes that these trainings are meant for lawyers from both within and outside CMS. “We wanted to be inclusive and invite other lawyer colleagues who are interested in our topics. Our clients – that is, the legal departments of our corporate clients – have also expressed an interest in joining our trainings.”

Mixed Response

Initially, the introduction of CLE in Hungary was an unwelcome change, and it was met with some resistance. Reczei, however, says he feels like the scepticism is passing, and that lawyers are warming up to the concept. “People are enjoying it now,” he says, confidently. “We have Facebook groups that have given good feedback, including discussion and exchanges of new ideas, and topic requests.”

For her part, Papp says she and her colleagues had no problem adapting to the new system. “Because our staff is highly exposed to other countries’ legal systems and bar regulations it was not a surprise that the compulsory training and accreditation system was introduced in Hungary as well.” Indeed, she says, its installation will help address weird imbalances. “For example, in England it has been in existence for several years, and our English-qualified lawyers have been collecting yearly credits. Now, the Hungarian lawyers will have to do it as well, so we welcome the new regulation.”

Not everyone sees it as a pure good, of course, and Milan Kohlrusz, Partner at Bittera, Kohlrusz & Toth isn’t completely persuaded. First, he is quick to emphasize that he has no objection to the new rules in theory, saying, “I always thought that it was a great initiative, and we need developments from time to time; I know this system from the UK, and there it works quite well.” But he admits that he’s less enthusiastic about some of the individuals who have popped up, he says, solely to profit from a perceived business opportunity. “The problem here is that it is now a new business for lawyers, judges, prosecutors,” he says, sighing. “New companies have been established in order to deliver the training. Many firms are using judges to explain certain laws. And on topics that we already know about.”

Kohlrusz has high hopes for future improvements to the system, which he says should focus on providing more access to those with specific expertise. “In arbitration – or specifically international arbitration – we may get better trainings abroad, like in Paris, London, New York, Stockholm, and so on. You may get new angles and rules on how to act, behave, or interpret the rules. Hungary is far away from this knowledge, so it’d be better to attend those. This could be applied to M&A or finance lawyers, too. I would broaden the training and make deals with foreign institutes. In these events you could get materials, sample what you could use here, and improve the Hungarian legal practice, too.”

Orsolya Gorgenyi, Partner at Szecskay Attorneys at Law and Head of International Affairs for the Budapest Bar Association, is also conscious of potential improvements down the road. “At the moment, the topics are still focused on ‘lexical knowledge.’ In my opinion, however, learning business and soft skills would be even more important to succeed in the future as a lawyer. In my opinion, once we get the CLE system going, we should also start offering a wider variety of trainings and workshops which focus on such skills. In AIJA I am now vice-chair in charge of the SCILL Commission, which stands for Skills, Career, Innovation, Leadership and Learning, and I can tell you that lawyers from around the world are hungry for such topics!”

Still, Gorgenyi insists, that doesn’t in any way limit her enthusiasm about the new system. “I absolutely approve of the CLE system,” she says. “I think we all must continuously develop ourselves. The offered courses are numerous, so anyone can pick topics that are relevant and useful for them. I am optimistic about the future of CLE in Hungary, especially now that as a positive side effect of the pandemic everyone is more used to online tools and webinars.

This Article was originally published in Issue 7.5 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Erdos | Katona has advised Cordia International Zrt. on Cordia International Zrt.’s July 23, 2020 HUF 36 billion bond issuance, made pursuant to the Bond Funding for Growth Program of the Hungarian National Bank. Allen & Overy advised Raiffeisen Bank, the lead arranger.

The bond issuance is Cordia’s second, following its HUF 44 billion bond issuance in 2019, and according to Erdos | Katona, “by closing this issuance successfully, Cordia has obtained access to funds on preferable rate and yield.”

The Erdos | Katona team on the capital markets matter — its first following the firm’s launch several months ago (as reported by CEE Legal Matters on June 1, 2020) — included Partner Gabor Erdos and Senior Associate Matyas Kornyei.

Allen & Overy’s team included Partner Zoltan Lengyel and Senior Associate Norbert Hete.

The Hungarian Parliament passed a legislation on the ban of single-use plastic in Hungary on 7 July 2020 as part of the Climate and Nature Protection Action Plan. The legislation was meant to be accepted earlier this year, however then the proposal was withdrew because of the COVID-19 pandemic. According to an earlier press release from the Ministry for Innovation and Technology, the “Hungarian Government is committed to defend the created world”.

The reduction of the use of various plastics was on the agenda of the Hungarian Government for years. The ban is an obligation under the EU law requiring Member States to eliminate specific plastics from use such as single-use plastic cutlery, cotton buds, straws and stirrers by 2021. The Hungarian implementation is stricter, as it applies to a wider range of products than its EU counterpart, for example plastics with a size between 15 and 50 microns. Furthermore, plastic bags under 15 micron will be charged with 20 times higher environmental protection product charge.

The reasoning behind the legislation is that plastic, especially single-use plastic products or products containing micro plastics are dangerous for the environment as they have a slow rate of decomposition and damage organisms, thus entering the food chain. Environmental activists and civil organizations have expressed their agreement to the restrictions, while actors from the plastic industry are preparing for the entry into force of the legislation by 1 July 2021.

By Eszter Kamocsay-Berta, Managing partner, KCG Partners Law Firm

Kinstellar has advised the Hungarian State on a greenfield investment in helicopter spare parts manufacturing plant to be established in Hungary by Airbus Helicopters and the Hungarian state-owned NLP Nemzeti Legiipari Projekt Kft.

According to Kinstellar, “the new helicopter part manufacturing entity is called Airbus Helicopters Hungary Kft. and will manufacture high-precision metallic elementary parts of helicopters for the complete Airbus product range and will employ more than 200 highly-trained workers in Hungary.”

Kinstellar’s Budapest-based team was led by Partner Akos Nagy and included Partner Peter Voros, Senior Associates Eszter Takacsi-Nagy and Agnes Zsofia Szabo, and Associates Laszlo Palocz and Orsolya Staniszewski.

Kinstellar did not reply to our inquiry on the matter.

Lawmakers have adopted new rules protecting consumers against faulty goods applicable as of 1 January 2021.

Pursuant to media communication, the new rules were triggered by the excessive volume of consumer protection cases lodged by consumers and by the conclusions/statistics the consumer protection authorities drew from this: a relatively high number of companies keep infringing the guarantee rules. Therefore, the new rules address potentially infringing behaviour by imposing mandatory actions for companies, thereby aiming to enhance consumer satisfaction.

The basics

A consumer guarantee covers consumer rights if the goods turn out to be faulty within a certain amount of time after purchase. In other words, a consumer guarantee is an agreement between the consumer and the guarantor (seller) in which the guarantor undertakes to assume liability for faultiness during the guarantee period and may only be released from liability if it can prove that the cause of the defect occurred after performance (e.g. the consumer used the goods inadequately).

Under these rights, the consumer has the following options: to have the goods repaired or replaced, to ask for a price reduction or to repair the defect himself, or to withdraw from the contract.

A consumer guarantee may be a service bought by the consumer but there are cases where a mandatory consumer guarantee is imposed by law, e.g. on durable goods, like home appliances or automobiles. In the latter case, the consumer may be offered an extended consumer guarantee (either for free or to purchase) in addition to the mandatory statutory one.

Rethinking the mandatory consumer guarantee period

Currently, where a consumer guarantee is mandatory by law, the statutory time period for the guarantee is one year. As of 1 January 2021, there will be time period ranges. The respective time period varies based on the purchase price:

• for goods costing between HUF 10,000 and HUF 100,000 (approx. EUR 30 – EUR 300) the mandatory consumer guarantee remains one year;
• for goods costing between HUF 100,000 and HUF 250,000 (approx. EUR 300 – EUR 750) the mandatory consumer guarantee lasts for two years; while
• for goods costing more than HUF 250,000 (EUR 750) the mandatory consumer guarantee lasts for three years.

Introducing e-guarantee letters

To enforce consumer guarantee rights, the consumer must be in possession of a guarantee letter (in certain cases, the invoice may serve this purpose).

The new law will introduce e-guarantee letters next year. This means that the seller may send or upload the e-guarantee letter to the attention of the consumer. In the latter case, the seller must also make sure that the consumer may download the e-guarantee letter within the mandatory timeframe, i.e. for the duration of the consumer guarantee.

Addressing consumer guarantee rights

The new rules introduce various scenarios for how guarantors must act when dealing with guarantee claims (unless the consumer decides otherwise or chooses another option granted by law). These include:

• If, during the first repair, the goods turn out to be unimprovable, the guarantor must replace the item within eight days. If this is not possible, the consumer is entitled to a refund.
• If the goods break down three times during the mandatory guarantee period – and unless the consumer decides otherwise – upon the fourth breakdown the guarantor must replace the item within eight days. If this is not possible, the consumer is entitled to a refund.
• If the repair is not finished within 30 days, the guarantor must replace the item within eight days after the repair period elapsed. Again, if this is not possible, the consumer is entitled to a refund.

+++

The new rules will require additional efforts from companies to prepare, since the current consumer guarantee policies must be tailored to comply with the new rules. As the new rules may naturally lead to higher costs for companies, it is recommended that companies negotiate with their subcontractors (e.g. service partners, suppliers) about sharing the additional obligations and costs. When preparing, the companies must amend their guarantee letters and be ready for e-guarantee letters. In addition, if companies apply general terms and conditions, these policies must also be revisited in a timely manner.

By Alexandra Bognar, Attorney at Law, Schoenherr

Eva Nikolic has become Senior Director Legal, Developed Markets at the Astellas pharmaceutical company, where she will head the company’s commercial legal agenda and lead related legal support in 22 European markets, including Central Europe and the Adriatic and Baltic regions.

Prior to Astellas, Nikolic was Head of Legal for the Adria Cluster at BAT from 2015 to 2018. Earlier, she was BAT Head of Legal for Central Europe from 2014-2015, after joining BAT as Head of Hungary and Croatia in 2012. Nikolic worked for Valeant Pharmaceuticals from 2000-2011, and was Legal Director Europe by the time of her departure. 

“I’m very excited and happy to be joining the Astellas team,” Nikolic commented, “and I am looking forward to all the challenges and opportunities ahead in this very diverse region and contributing to the company’s strategy and vision.”

After the successful first METAR tender last year, on July 15, 2020 the Hungarian Energy and Public Utility Regulatory Authority launched the second METAR tender to support renewable electricity producers under the green premium scheme.

This auction will take place between September 15, 2020 and October 15, 2020, with a yearly maximum support budget of HUF 800 million and a maximum subsidized volume of 390 GWh/year.

As in the first tender, in the second round the renewable premium support is earmarked for new investment projects and existing plant units that undergo major refitting or development at a cost exceeding 50% of the initial investment cost.

As before, applicants can be companies with a registered office in the EU, the EEA or the Energy Community, Hungarian branch offices of foreign companies and Hungarian business entities or municipalities. However, the METAR tender is only available to producers producing electricity at a site in Hungary. For various considerations, bidders are generally Hungarian entities, i.e. a new entrant needs to set up an SPV.

In the upcoming METAR tender there will be two tender categories based on the nominal capacity of bidding projects:

• units with a nominal capacity of 0.3 to 1 MW (“Small Category”), where the maximum subsidy budget for allocation is HUF 200 million/year and the subsidized electricity volume available for allocation is 40 GWh/year;

• units with a nominal capacity of 1 to 49.99 MW (“Big Category”), where the maximum subsidy budget for allocation is HUF 600 million and the subsidized electricity volume available for allocation is 350 GWh/year.

The tender rules set separate limitations with respect to bidders belonging to the same ultimate beneficial owner (“UBO”):

• Small Category: the maximum volume of subsidized electricity that may be awarded to bidders belonging to the same UBO is 15 GWh/year;
• Big Category: the maximum volume of subsidized electricity that may be awarded to bidders belonging to the same UBO is 175 GWh/year.

Applicants are to make a proposal for the initial subsidized price that may not be higher than HUF 26.70/kWh. Commercial operations of the winning projects must start within 3 years and the maximum term of the subsidy is 15 years again (possibly reduced by other support). 

Tender participation is conditional upon providing tender security, while winning bidders must provide and maintain performance security for implementation of the project. The amount of the tender security is 1.5%, while the amount of the performance security is 5% of the benchmark investment value defined in the tender documentation.

The tender rules have not changed significantly, but the increased upper threshold of the Big Category may be more attractive to potential developers. While the tendered volumes increased, the subsidy budget decreased, which is not surprising based on the result of the first tender, when almost the entire tendered subsidized volume of electricity (96.5%) could have been distributed with only 22.9% of the total available subsidy budget.

We are continuously monitoring the developments concerning METAR so, if you have any questions, please feel free to contact us.

By Anita Horvath, Partner, and Eszter Zadori, Partner, Dentons

The amendments to the Hungarian Bankruptcy Act enter into force on 1 August 2020, aiming at modernizing the rules of the insolvency law, maintaining employment and facilitating the agreement between the creditors and the debtor in the course of the bankruptcy and liquidation proceedings.

In order to accelerate and simplify the proceedings, the amendments to the Bankruptcy Act ensure electronic communication between the creditors or between the various parties in the procedure and the administrator or the liquidator. The information, declaration or document sent by electronic means must be sent to the addressee as a private document with full evidence force or as a document converted into electronic document form under the Act on Attorneys.

The amendments also enable the liquidator to conduct the creditors’ meeting without personal presence, following the identification of the participants by technical means allowing picture and voice transmission. In addition, from 1 August 2020, the subjective deadline of 120 days from the date of gaining knowledge will be terminated in case of a challenge before the court of the legal transactions made by the ex-managers and harming the interest of the creditors. Furthermore, the moratorium period in the bankruptcy proceeding is significantly increased from 120 to 180 days.

It is also new that in case of a major economic entity of preferential status for strategic considerations, in the liquidation proceeding the Hungarian State has pre-emption right in the course of the sale of the assets of the debtor.

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