At the beginning of July 2021, a new Government Decree (402/2021. (VII. 8.)) entered into force on the registration procedure of raw materials and products with strategic importance for the security of supply in construction and on other measures. The aim is to control the purchase and export of certain building materials abroad from Hungary. It applies to building materials which are intended to be exported or to be sold abroad from the territory of Hungary, for instance gravel, pebbles, crushed stone, portland cement, bauxite cement, cinder cement, fireproof cements, mortars, concretes, iron bars and wood, however, it is not applicable to building materials supplied in the framework of transit traffic.
A natural person, individual entrepreneur and legal person or other organisation intending to sell or export building materials abroad must submit a written notification in Hungarian to the Minister responsible for the domestic economy (Minister). The notification must be made by using the form published on the authority’s website. A copy of the contract of sale or the accepted offer and, if available, the invoice, and the contract for delivery or other document proving the delivery abroad must be attached to the written notification. In case these documents are issued in a language other than Hungarian, a certified Hungarian translation must also be attached.
The Minister checks whether the notification complies with the formal requirements. In justified cases, the Minister forwards the notifications to the Government Commissioner responsible for the coordination of measures in the construction industry, who examines whether the sale or export of construction material abroad significantly impedes or renders impossible the construction, operation, maintenance or development of critical infrastructure, thereby endangering public services or posing a risk to the security of supply of the construction industry.
The Minister must pass a decision within ten working days from the receipt of the notification at the latest on whether (a) the minister responsible for the supervision of state property does not exercise the pre-emption or purchase right of the State in respect of the building materials, and certifies the acknowledgement of the notification in writing, (b) the minister exercises the pre-emption or purchase right of the State and terminates the notification procedure or (c) certifies the acknowledgement of the notification in writing. The final decision of the Minister can be challenged in a lawsuit, for which the Budapest Capital Regional Court has exclusive jurisdiction. The court decides on the application within 30 days from its receipt in a non-contentious proceeding.
The pre-emption and purchase is exercised on behalf of the Hungarian State by the minister responsible for the supervision of state property through MNV Zrt. (i.e. the Hungarian National Asset Management Private Limited Company). If MNV Zrt. and the notifier do not agree on the amount of the purchase price, the minister responsible for the supervision of state property shall pay the amount corresponding to the current market value of the building material to the notifier within eight days of the information on the exercise of the pre-emption or right, who may then pursue his claim in civil proceedings for the amount exceeding the purchase amount already paid.
If the minister responsible for the supervision of state property exercises the right of pre-emption or purchase through MNV Zrt., the sale of the construction material owned by the Hungarian State shall be attempted by MNV Zrt. through the electronic auction system route, in the framework of an electronic auction, once in two rounds. Only those natural persons, individual entrepreneurs, legal persons or other entities may participate in the auction who undertake to use the purchased building materials for the construction, operation, maintenance and development of critical infrastructure in Hungary or for governmental population policy and social purposes.
By Lidia Suveges, Attorney at law, KCG Partners Law Firm