As legal professionals and human beings with empathy, we keep reflecting on recent developments in Ukraine. Our heart goes out to our fellow people, and we trust that history will show us again: an imagined order cannot be sustained by violence. “You can do many things with bayonets, but it is rather uncomfortable to sit on them,” Charles Maurice de Talleyrand-Perigord insightfully pointed out. I’d like to believe that violent actions in Ukraine will come to an end or will have already ended by the time of the publication of this issue. Will, however, the impact of this war simultaneously also come to an end? As a result, how will the legal practice in CEE evolve and what developments should we expect?
On June 30, 2022, CEE Legal Matters hosted the fifth edition of the CEELM Budapest Law Firm Bowling Challenge: A competition of four-person teams from leading law firms in Hungary, with all proceeds going to the previous winner’s charity of choice. A total of 13 law firms competed for the trophy – and the bragging rights that go along with it.
In 2019, two EU directives were adopted which must be transposed into Hungarian labour law within a short deadline. In order to comply with EU Directive 2019/1152 on transparent and predictable working conditions and EU Directive 2019/1158 on work-life balance for parents and carers, the modifications of the Labour Code should be adopted by the beginning of August 2022. According to the current information, no substantive work has been started by the Hungarian legislator to modify the Labour Code in order to ensure the compliance with the provisions of the EU Directives.
At the end of April 2022, the Commission proposed the digitalization of the Schengen visa process, replacing the visa sticker, and introducing the ability to submit visa applications online through a visa platform. This way, applying for a Schengen visa will become easier and the visa itself will be more secure and less vulnerable to theft and fraud.
The Hungarian Trade Union Confederation (Magyar Szakszervezeti Szövetség, “MASZSZ”) put together in a ten-point manifesto its long-standing demands accumulated over the past few years. The president of the Confederation announced the manifesto on 27 April 2022. As soon as possible after the formation of the new Hungarian government, the Confederation sends its manifesto to all decision-makers and the leaders of the parliamentary parties.
In 2021, the green financial markets substantially increased according to the Green Finance Report of the Central Bank of Hungary (MNB). Credit institutions launched green lending, and four banks are taking advantage of the MNB's green capital requirement discount for housing. Among green financing products, the green bonds are very popular both at public and corporate level, and green lending has also been launched on the corporate side. In the investment segment, ESG products are already available, but only to a limited extent.
At the initiative of the Ministry of Justice, the Hungarian National Bank and the Hungarian Bar Association, the Government adopted a Government Decree in April 2022 regulating in detail the payment of lawyers' deposits at financial institutions in the event of liquidation and winding-up proceedings. The Government Decree provides that in the event of the winding-up and liquidation of a financial institution, the provisions of the Bankruptcy Act, the Company Registration Act, the Act on Credit Institutions and Financial Undertakings and the Investment Firm Act shall apply with the additions and derogations included in the Government Decree.
The Hungarian tax authority published its annual tax audit guidelines with the clear aim of supporting compliant taxpayers and take firm actions against intentional tax evasion by utilizing various data sources available in the process. E-commerce, real estate industry, data-based risk analysis remain key elements.
The Hungarian Government adopted a decree on 24 February 2022 that allows people fleeing the Russian-Ukraine war to enter Hungary and guarantees ‘temporary protection’ for them. This temporary protection applies to all Ukrainian citizens and refugees who lived in Ukraine and their relatives. The temporary protection, at this stage, is available for one year. In order to get the temporary protected status, after entering Hungary, people must register at the Immigration Authority or at one of its sub-offices at the reception centres located near the Ukraine border. With the temporary protected status Ukrainian citizens are entitled to get accommodation, food, medical care, also dental treatment, maternity care, vaccinations and education for children. They are also entitled for monthly cash allowance for the duration of their protection. The monthly amount of the allowance is HUF 22,800 (approx. EUR 62).
From 14 February 2022 European patents registered in Hungary became available in the EFPR system. According to the statement of the Hungarian Intellectual Property Office (“HIPO”), by joining to the EFPR system, 34,000 patents registered in Hungary became available and searchable on the site of the EFPR. It is important to have a common platform for the patent registry, as customers do not need to look up national sites and search for similar patents before requesting registration. The system itself is capable of informing the user about countries in which the European patent in question is not protected anymore.
On 13 March 2022 the Hungarian Parliament approved an amendment to the Corporate Income Tax Act that modified the regulation of investment tax incentives. Based on the amendment, the only requirement to claim the investment tax credit is that the investment should be an initial investment implemented by a small and medium-sized enterprise, or is realized by a large company in the Northern Hungary, Northern Great Plain, South Great Plain, South Transdanubia, Central Transdanubia or Western Transdanubia regions. Mainly the Pest County region will benefit from the amendment, as the tax credit can be claimed after the investment projects realized in the whole region.