Special Legal Order and the State of Danger in Hungary: Government decrees issued between 16 and 29 April, 2020

  • The Government of Hungary declared state of danger on 11 March 2020 via Government Decree 40/2020. (III. 11.). The state of danger extends to the entire territory of Hungary for the elimination of the consequences of the human epidemic endangering life and property and causing massive disease outbreaks.
  • In response to the pandemic situation, DLA Piper Hungary has launched a new series called ‘Special Legal Order and the State of Danger in Hungary‘, through which Noémi Radnai and Gábor Papp, legal experts of the firm summarize the special legislation issued during the emergency period.
  • The series so far explored the basics related to the state of danger, and summarized the Government Decrees issued by the Government of Hungary under the state of danger in March and the first half of April 2020. The following summary covers the period between 16 and 29 April 2020 – please note that the below offers a high-level overview rather than a comprehensive summary and cannot be considered legal advice.

1. Government Decree 118/2020 (16 April) 

  • The local municipalities may specify stricter rules for the restriction of movement for the weekend of 18-19 April.

2. Government Decree 119/2020 (16 April) 

  • Contains rules on organizing high school final exams in May.
  • In most cases, oral examinations shall not be conducted. However, written examinations will take place, subject to special safety measures.

3. Government Decree 120/2020 (16 April)

  • Contains rules relating to the personnel of the Hungarian Defence Forces applicable in the state of danger.

4. Government Decree 121/2020 (16 April)

  • The preparatory period of diplomats expecting delegation to a foreign country may be extended until the end of the state of danger.

5. Government Decree 122/2020 (16 April)

  • For entities obliged to pay food chain supervision fee – in case they operate in sectors offering tourism, catering, gambling, film industry, performing arts, event organising or sports services – the deadline of declaring such obligation and the payment of the first instalment is extended until 30 September 2020.
  • In 2020, the period of agricultural seasonal work shall not exceed 180 days, with a limit of 20 days per month.
  • Agricultural and forestry land shall not be subjected to transfer via auction with the aim of enforcement, liquidation, or debt settlement until after the end of the state of danger.

6. Government Decree 123/2020 (16 April)

  • Entities using water supplies for agricultural purposes are exempt from paying water supply contribution until the end of the state of danger.

7. Government Decree 124/2020 (16 April)

  • Open-end alternative investment funds with a public offering may request credit up to the limit of 30 percent of its assets for liquidity purposes. The duration of the credit may not exceed five years.
  • Voluntary pension funds may also request further credit.
  • Based on this Decree, credit may be requested until 31 December 2020, with the proviso that the Government may extend the effect of these measures.

8. Government Decree 125/2020 (16 April)

  • According to the Decree, the permission of the author or the person entitled to neighbouring rights are not necessary for the multiplication, dissemination (as subject to certain criteria), and digital use on a secure electronic network, of a work used for educational purposes.
  • A secure electronic network is a technical solution which prevents the work from being made available outside the circle of educational users.
  • Subject to certain criteria, works may be adapted for school purposes.

9. Government Decree 126/2020 (16 April)

  • Contains special rules applicable to interest settlements and guarantees of the Hungarian Export-Import Bank Ltd.
  • Also contains rules relating to the insurance services provided by the Hungarian Export Credit Insurance Ltd.

10. Government Decree 127/2020 (16 April) 

  • Contains investment- and guarantee-related special rules applicable to the Hungarian Export-Import Bank Ltd. and the Hungarian Export Credit Insurance Ltd.

11. Government Decree 128/2020 (17 April) 

  • Disposes of taking Kartonpack Ltd. (a public limited company manufacturing packaging products which has been classified as critical infrastructure, hereinafter: the Company) under state supervision.
  • The Government Commissioner responsible for coordinating governmental tasks relating to the exercise of ownership:
  • shall be entitled to take all measures necessary to maintain the viability of the Company and to carry out state supervision effectively;
  • has the exclusive right to decide on matters within the competence of the stakeholders’ meeting;
  • may inspect the documents, accounting records and books of the Company;
  • may request information from senior executives of the Company, members of the Supervisory Board, the Permanent Auditor, other members and employees of the Company;
  • may examine the Company’s payment account, cash register, securities and commodities, and contracts;
  • may recall and appoint new senior executives and members of the Supervisory Board;
  • may limit or terminate the right of representation of a person who has the right to represent the company, including the senior executive;
  • is entitled to terminate or withdraw from contracts containing property liabilities with immediate effect;
  • may participate in negotiations between the Company and its creditors in preparation for its property commitments;
  • is entitled to give written instructions to the chief executive officer and the supervisory board of the Company in matters concerning the management of the Company and its property obligations.

12. Government Decree 129/2020 (17 April)

  • Contains rules on (criminal) preventive probation.

13. Government Decree 130/2020 (17 April)

  • The Financial Arbitration Board of the Central Bank of Hungary shall conduct its proceedings in writing, within 180 days of the admission of the claim.
  • In case the claimant does not accept being subjected to a written procedure, the procedure shall be paused until after the end of the state of emergency, or, if necessary, until 21 days after the end of the state of emergency.

14. Government Decree 131/2020 (17 April) 

  • Contains rules relating to the notification of the pause or continuation of the activities of individual entrepreneurs.

15. Government Decree 132/2020 (17 April)

  • Modifies the rules of identification provided by Trusted Service Providers for qualified signature certificates.
  • Identity verification may be carried out via an electronic communication device providing video technology.
  • The Decree waives the obligation of paying media service fee for the second quarter of 2020.

16. Government Decree 133/2020 (17 April)

  • Modifies rules relating to accredited public procurement consultants.

17. Government Decree 135/2020 (17 April)

  • In its decree, the Government may pronounce a location and its immediate surroundings a Special Economic Zone, if
  • it is the location of an investment pronounced as an “investment of paramount importance for the national economy”;
  • the project has a total cost requirement of at least HUF 100,000,000;
  • it is of economic importance affecting a significant part of the county; and
  • it serves to avoid massive job losses and the realization of a new investment or expansion.
  • The Decree specifies rules relating to Special Economic Zones.

18. Government Decree 136/2020 (17 April)

  • Establishes a Special Economic Zone in the city of Göd (the territory of a Samsung factory).

19. Government Decree 137/2020 (20 April)

  • Merger notification rules do not apply to financial transactions that are performed with the direct or indirect participation of state-owned venture capital funds or private equity funds.
  • The Decree also contains special rules relating to the Hungarian Development Bank Ltd.

20. Government Decree 140/2020 (21 April)

  • The deadline for tax declaration is extended until 30 September 2020 for various kinds of taxes (corporate tax, SME tax, local tax on economic activities, etc.).
  • The deadline for financial reporting is also extended until 30 September 2020.
  • In order to ensure health insurance for employees during unpaid leave, as of 1 May the employer shall pay medical service contribution HUF 7,710 per month after each employee on unpaid leave.
  • The fringe benefits on the Széchenyi Pihenő Card paid from 22 April until 30 June 2020 are exempted from social contribution tax and also the limit of the fringe benefits which can be provided to the employees on SZÉP card is increased for the year of 2020.
  • Those who provide accommodation services are exempted from tourism tax from 22 April until 31 December 2020.
  • Reduces social contribution tax (from 17.5 % to 15.5 %) and simplified contribution to public revenues (from 17.5 % to 15.5 %).
  • Contains rules on tax procedures (e.g. deferral of payment, payment in instalments, reduction of tax debts).

21. Government Decree 141/2020 (21 April)

  • Modifies rules on wage subsidy for employment in reduced working time.
  • The working time may be reduced by 15-75 % (instead of 30-50 %) therefore the subsidy can be requested in case of at least 2 hours of employment per day (instead of 4 hours).
  • The employer only needs to maintain the employment of the employees affected by the subsidy. The employer does not need to maintain its headcount number.
  • The government decree uses the definition of base salary (instead of absence fee), i.e. the maximum amount of the subsidy is based on the base salary of the employee.
  • If the reduced working time does not exceed 50 % of the original working time, the agreement on individual development time is not mandatory.
  • The application procedure is simplified (e.g. the affected employment agreements are amended with the government decree, separate amendments are not necessary, the reasons of the application for the subsidy is not required to be detailed).
  • The wage subsidy is extended for other groups of employees (e.g. temporary agency workers, employees in home office, etc.).
  • It also contains rules on wage subsidy for employees employed in research and development. 

22. Government Decree 142/2020 (21 April)

  • Introduces employment-related rules for football associations.

23. Government Decree 143/2020 (22 April) 

  • Contains construction-related procedural rules.
  • In case of temporary buildings built for the purposes of the protection of life and health, the rule setting out the minimum ceiling height of 3 metres shall not apply.
  • The validity of a building permit shall be extended by one year, even in the absence of a specific request, if the permit would expire within 30 days after the end of the state of emergency. This shall not apply to certificates of occupancy.

24. Government Decree 144/2020 (22 April)

  • Proposes further family benefits relating to housing.

25. Government Decree 145/2020 (22 April)

  • The Central Bank of Hungary, in its capacity of supervisory authority, may – on a case by case basis, in case of hindrance and only in particularly reasoned cases – allow certain entities to temporarily stop reporting to the supervision.
  • This rule shall not apply to all reporting obligations – for instance, anti-money laundering obligations shall still be complied with.
  • In case the deadline of notification and declaration obligations of certain entities would expire during the state of danger, the deadline is extended by 30 days.
  • Complaint handling procedures shall only be conducted in writing.
  • In case a client of such entities is unable to make declarations or file documents during the state of danger, the deadline of such obligation is extended until after 30 days of the state of danger.

26. Government Decree 146/2020 (22 April) 

  • Contains further provisions on state support provided for language examinations and transportation (rules of the road) examinations in relation to the state of danger.

27. Government Decree 147/2020 (22 April)

  • Specifies rules relating to the criteria to be fulfilled by service providers in order to be granted permission to conduct healthcare services.
  • It also provides rules on the basic information technology requirements and related reporting requirements of healthcare service providers.

28. Government Decree 148/2020 (23 April)

  • Local municipalities may specify stricter rules for restriction of movement for the weekend of 25-26 April.

29. Government Decree 152/2020 (27 April)

  • If there is a kindergarten or nursery care institution in the territory of a local municipality, and the mayor issued an extraordinary break in the institution, the mayor is obliged to organize daycare for children of nursery and pre-school age.
  • For the duration of the state of emergency, any employer may arrange daycare for the children of its employees, subject to rules stipulated in this Decree.

30. Government Decree 153/2020 (27 April) 

  • Contains further rules relating to the personnel of the Hungarian Defence Forces applicable in the state of danger.

31. Government Decree 154/2020 (27 April) 

  • Specifies rules for the financing of healthcare services.

32. Government Decree 157/2020 (29 April)

  • The provision of health care and the accounting of its financing are not conditional on the patient’s personal presence, if the specifics of the care and its medical judgment allow it (“telemedicine”).

33. Government Decree 158/2020 (29 April)

  • In a nursing home with at least 200 beds, the hospital commander performs the duties of institution commander on the proposal of the head of the Operational Corps to inspect the use of centrally procured protective equipment and adherence to epidemiological measures.

You can read the previous parts of the series at the following links:
Part 1
Part 2
Part 3

Authors: Gábor Papp and Noémi Radnai

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