All payments of principal and interest in respect of this Series of the Bonds by the Issuer are subject in all cases to applicable PRC tax laws, regulations and directives, which will be borne by the Bondholders.


All payments of principal and interest in respect of this Series of the Bonds shall be made free and clear of, and without withholding or deduction for, any taxes, duties, assessments or governmental charges of whatsoever nature imposed, levied, collected, withheld or assessed by Hungary or any political subdivision or any authority thereof or therein having power to tax, unless such withholding or deduction is required by law. In that event, Hungary shall pay such additional amounts as will result in the receipt by the Bondholders of such amounts as would have been received by them if no such withholding or deduction had been required, except that no such additional amounts shall be payable in respect of any of this Series of the Bonds presented for payment:


(a) by a holder which is liable to such taxes, duties, assessments or governmental charges in
respect of any of this Series of the Bonds by reason of its having some connection with Hungary other than the mere holding of this Series of the Bonds; or
(b) where such withholding or deduction is imposed on a payment to an individual and is required


to be made pursuant to the European Council Directive 2003/48/EC on the taxation of savings income or any law implementing or complying with, or introduced in order to conform to, such Directive or the European Council Directive 2014/48/EC amending 2003/48/EC.
Any reference in these Terms to principal or interest shall be deemed to include any additional amounts in respect of principal or interest (as the case may be) which may be payable under this Term (30).
(31)Custody Institution


Shanghai Clearing House, as the Custody Institution designated by PBOC.
(32)Underwriting
This Series of the Bonds will be underwritten by the Lead Underwriter on a standby commitment underwriting basis.
(33)Governing Law of this Series of the Bonds and the Debt Obligations Represented by Such Bonds
PRC law.
(34)Dispute Resolution


Any dispute arising from or in connection with any of this Series of the Bonds, including any dispute relating to the existence, validity, interpretation, performance, default, termination, consequences of invalidity and non-contractual obligations, shall be submitted to CIETAC for arbitration which shall be conducted in Beijing in accordance with the CIETAC arbitration rules in effect at the time of the submission of the dispute for arbitration.


The arbitral tribunal shall consist of three (3) arbitrators. Each of the Issuer as a party and the Bondholders participating in the dispute as the other party may appoint any person, whether on the arbitrator list provided by CIETAC or not, as an arbitrator. The arbitration proceedings shall be conducted in both English and Chinese. The arbitral award is final and binding upon both parties.


To the extent that Hungary may in any jurisdiction claim for itself or its assets or revenues immunity from arbitration, suit, execution, attachment (whether in aid of execution, before judgment or otherwise) or other legal process and to the extent that in any such jurisdiction there may be attributed to itself or its assets or revenues such immunity (whether or not claimed), Hungary agrees not to claim and irrevocably waives such immunity to the fullest extent permitted by applicable law, provided that Hungary does not waive any immunity with respect to those items specifically set out under Section 3 “Status of this Series of the Bonds and Legal Proceedings” of this Offering Circular


.
(35)Event of Default; Event of Acceleration
If any of the following event occurs and is continuing:
(a) Event of Default:
(i) Non-payment: the Issuer fails to pay the interest and/or principal on any of this Series of
the Bonds within 14 days of the due date for payment thereof; or
(ii) Breach of other obligations: the Issuer defaults in the performance or observance of any


of its other obligations under or in respect of this Series of the Bonds and such default remains unremedied for 30 days after written notice thereof, addressed to the Issuer by any Bondholder, has been delivered to the Issuer; or
(b) Event of Acceleration:
(i) Failure to take action: any action, condition or thing at any time required to be taken, fulfilled or done in order: (A) to enable the Issuer lawfully to enter into, exercise its rights


and perform and comply with its obligations under and in respect of this Series of the Bonds, (B) to ensure that those obligations are legal, valid, binding and enforceable, and
(C) subject to their official translation into the Hungarian language, to make this Series of
the Bonds admissible in evidence in the courts of the Issuer, is not taken, fulfilled or done
within 14 days of receipt by the Issuer of written notice thereof; or


(ii) Unlawfulness: it is or will become unlawful for the Issuer to perform or comply with any
of its obligations under this Series of the Bonds, and such unlawfulness is not remedied by the Issuer within 14 days’ written notice thereof;


then, in the case of any event mentioned in either (a) or (b) above, all of this Series of the Bonds may, by written notice addressed and delivered to the Issuer by the holders of at least 25% of the aggregate principal amount of this Series of the Bonds then outstanding, be declared immediately due and payable, whereupon, unless prior to such date the Issuer shall have cured or otherwise rectified the relevant Event of Default or Event of Acceleration for all of this Series of the Bonds, all of this Series of the Bonds shall become immediately due and payable at their principal amount together with accrued interest


. The Issuer shall ensure that it will use all reasonable endeavors to give prompt notice of any such declaration to all Bondholders.
However, it shall not be an Event of Default to withhold any such payment if failure of payment is solely due to administrative errors caused by the Issuer, agency of the Custody Institution or relevant banks making transfers to such agency, except for when such failure lasts beyond three Business Days after the Bondholder’s giving a notice of no payment.


(c) Rescission of the Declaration of Acceleration:


If the Issuer or the Post-issuance Manager receive notice in writing from holders of at least 50% in aggregate principal amount of this Series of the Bonds then outstanding and/or a resolution is passed at a meeting of Bondholders duly convened and held in accordance with the terms and conditions set forth in this Offering Circular to the effect that the Event(s) of Default and/or Event(s) of Acceleration giving rise to a declaration of acceleration made pursuant to paragraph (i) or (ii) above is or are cured or is or are waived by them following any such declaration and that such holders approves the rescission of the relevant declaration, the Issuer hall give notice to the Bondholders of the rescission of the relevant declaration whereupon it shall be rescinded and shall have no further effect


. No such rescission shall affect any other or any subsequent Event of Default and/or Event of Acceleration or any right of any Bondholder in relation thereto. The responsibilities of the Post-issuance Manager with respect to such meeting and disclosure of information are set forth in paragraphs (5) and (6) under the heading “1. Post-issuance Manager and Related Responsibilities” in Section 16 “Investor Protection Mechanism” of this Offering Circular.
(d) Outstanding Bonds:


Please see paragraph (i) (Bonds controlled by the Issuer) of Term (36) (Meetings of Bondholders) for the determination of those of this Series of the Bonds that are not deemed “outstanding” for purposes of this Term (35).
(36)Meetings of Bondholders
(a) Convening Meetings of Bondholders; Conduct of meetings of Bondholders; Written
Resolutions:


The Issuer may convene a meeting of the Bondholders at any time in respect of this Series of the Bonds in accordance with this Term (36). The Issuer will determine the time, place and purpose of the meeting not less than 21 and not more than 45 days (exclusive of the day on which the notice is given and of the day on which the relevant meeting is held) before the meeting.


The following provisions set forth the conditions and procedures for convening meetings of Bondholders to consider matters relating to this Series of the Bonds, including, without limitation, the modification of any provision of these Terms. Any such modification may be made if, having been approved in writing by the Issuer, it is sanctioned by an Extraordinary Resolution. Additional details on the procedures of meetings of Bondholders are set forth


under the heading “3. Meetings of Bondholders” in Section 16 “Investor Protection Mechanism” of this Offering Circular. If this Term (36) and the provisions under the heading “3.


Meetings of Bondholders” in Section 16 “Investor Protection Mechanism” of this Offering Circular do not include such procedures, or additional procedures are required, the Issuer and the Post-issuance Manager will agree such procedures as are customary in the market and in such a manner as to facilitate any multiple series aggregation, if in relation to a Reserved Matter the Issuer proposes any modification to the terms and conditions of, or action with respect to, two or more series of debt securities issued by it


.
The meeting of Bondholders shall be convened by the Post-issuance Manager upon the request (addressed to the Post-issuance Manager or to the Issuer, with a copy to the other, and setting out the purpose of the requested meeting) in writing of the Bondholders holding not less than 10% of the aggregate principal amount of this Series of the Bonds then outstanding (as defined in Term (36)(i) (Bonds controlled by the Issuer)).


The Post-issuance Manager will agree the time and place of the meeting with the Issuer promptly. The Issuer or the Post-issuance Manager, as the case may be, will notify the Bondholders within 10 days of receipt of such written request of the time and place of the meeting, which shall take place no less than 21 and no more than 45 days after the date on which such notification is given.
The notice convening any meeting will specify, inter alia;
(A) the date, time and location of the meeting;


(B) the agenda and the text of any Extraordinary Resolution to be proposed for adoption at the meeting;
(C) the record date for the meeting, which shall be no more than 5 Business Days before the date of the meeting;
(D) the documentation required to be produced by a Bondholder in order to be entitled to
participate at the meeting or to appoint a proxy to act on the Bondholder’s behalf at the meeting;
(E) any time deadline and procedures required by the Custody Institution designated by
PBOC;


(F) whether Term (36)(b) (Modification of this Series of the Bonds only), or Term (36)(c)
(Multiple Series Aggregation – Two limb voting) shall apply and, if relevant, in relation to which other series of debt securities it applies;
(G) if the proposed modification or action relates to two or more series of debt securities


issued by it and contemplates such series of debt securities being aggregated in more than one group of debt securities, a description of the proposed treatment of each such group of debt securities;
(H) such information that is required to be provided by the Issuer in accordance with Term
(36)(e) (Information);
(I) the identity of the Aggregation Agent and the Calculation Agent, if any, for any proposed


modification or action to be voted on at the meeting, and the details of any applicable methodology referred to in Term(36)(f) (Claims Valuation); and
(J) any additional procedures which may be necessary and, if applicable, the conditions
under which a multiple series aggregation will be deemed to have been satisfied if it is approved as to some but not all of the affected series of debt securities.


All information to be provided pursuant to Term (36)(a) (Convening Meetings of Bondholders; Conduct of meetings of Bondholders; Written Resolutions) shall also be provided, mutatis mutandis, in respect of Written Resolutions.
In these Terms:
Any reference to “debt securities” means any bonds (including the Bonds), notes, debentures
or other debt securities issued by the Issuer in one or more series with an original stated
maturity of more than one year.


“Debt Securities Capable of Aggregation” means those debt securities which include or incorporate by reference this Term (36)(a) (Convening Meetings of Bondholders; Conduct of meetings of Bondholders; Written Resolutions) and Term (36)(j) (Aggregation Agent; Aggregation Procedures) or provisions substantially in these terms providing for the debt securities which include such provisions to be capable of being aggregated for voting purposes with other series of debt securities.


An “Extraordinary Resolution”means any of a Single Series Extraordinary Resolution and/or a Multiple Series Two Limb Extraordinary Resolution, as the case may be.


A “record date” in relation to any proposed modification or action means the date fixed by the Issuer for determining the Bondholders and, in the case of a multiple series aggregation, the holders of debt securities of each other affected series that are entitled to vote on a Multiple Series Two Limb Extraordinary Resolution, or to sign a Multiple Series Two Limb Written Resolution.


A “Written Resolution” means any of a Single Series Written Resolution, and/or a Multiple Series Two Limb Written Resolution, as the case may be.
(b) Modification of this Series of the Bonds only:
Any modification of any provision of, or any action in respect of, these Terms of this Series of the Bonds may be made or taken if approved by a Single Series Extraordinary Resolution or a Single Series Written Resolution as set out below.


A “Single Series Extraordinary Resolution” means a resolution passed at a meeting of Bondholders duly convened and held in accordance with the procedures prescribed by the Issuer and the Post-issuance Manager pursuant to Term (36)(a) (Convening Meetings of Bondholders; Conduct of meetings of Bondholders; Written Resolutions) by a majority of:
(A) in the case of a Reserved Matter, at least 75% of the aggregate principal amount of this
Series of the Bonds then outstanding; or


(B) in the case of a matter other than a Reserved Matter, more than 50% of the aggregate
principal amount of this Series of the Bonds then outstanding.
A “Single Series Written Resolution” means a resolution in writing signed or confirmed in writing by or on behalf of the holders of:
(A) in the case of a Reserved Matter, at least 75% of the aggregate principal amount of this
Series of the Bonds then outstanding; or


(B) in the case of a matter other than a Reserved Matter, more than 50% of the aggregate
principal amount of this Series of the Bonds then outstanding.
Any Single Series Written Resolution may be contained in one document or in several documents in the same form, each signed or confirmed in writing by or on behalf of one or more Bondholders.


Any Single Series Extraordinary Resolution duly passed or Single Series Written Resolution approved shall be binding on all Bondholders, whether or not they attended any meeting, whether or not they voted in favor thereof and whether or not they signed or confirmed in writing any such Single Series Written Resolution, as the case may be.
(c) Multiple Series Aggregation – Two limb voting
(i) In relation to a proposal that includes a Reserved Matter, any modification to the terms


and conditions of, or any action with respect to, two or more series of Debt Securities Capable of Aggregation may be made or taken if approved by a Multiple Series Two Limb Extraordinary Resolution or by a Multiple Series Two Limb Written Resolution as
set out below.
(ii) A “Multiple Series Two Limb Extraordinary Resolution” means a resolution


considered at separate meetings of the holders of each affected series of Debt Securities Capable of Aggregation, duly convened and held in accordance with the procedures prescribed in Term (36)(a) (Convening Meetings of Bondholders; Conduct of meetings of Bondholders; Written Resolutions) or similar provisions in the applicable bond documentation, as supplemented if necessary, which is passed by a majority of:


(A) at least 66.67% of the aggregate principal amount of the outstanding debt securities
of affected series of Debt Securities Capable of Aggregation (taken in aggregate); and
(B) more than 50% of the aggregate principal amount of the outstanding debt securities
in each affected series of Debt Securities Capable of Aggregation (taken individually).
(iii) A “Multiple Series Two Limb Written Resolution” means each resolution in writing


(with a separate resolution in writing or multiple separate resolutions in writing distributed to the holders of each affected series of Debt Securities Capable of Aggregation, in accordance with the applicable bond documentation) which, when taken together, has been signed or confirmed in writing by or on behalf of the holders of:
(A) at least 66.67% of the aggregate principal amount of the outstanding debt securities


of all the affected series of Debt Securities Capable of Aggregation (taken in aggregate); and
(B) more than 50% of the aggregate principal amount of the outstanding debt securities
in each affected series of Debt Securities Capable of Aggregation (taken individually).


Any Multiple Series Two Limb Written Resolution may be contained in one document or several documents in substantially the same form, each signed or confirmed in writing by or on behalf of one or more Bondholders or one or more holders of each affected series of Debt Securities Capable of Aggregation.
(iv) Any Multiple Series Two Limb Extraordinary Resolution duly passed or Multiple Series


Two Limb Written Resolution approved shall be binding on all Bondholders and holders of each other affected series of Debt Securities Capable of Aggregation, whether or not they attended any meeting, whether or not they voted in favor thereof, whether or not any other holder or holders of the same series voted in favor thereof and whether or not they signed or confirmed in writing any such Multiple Series Two Limb Written Resolution, as the case may be.


(v) Any modification or action proposed under Term (36)(c)(i) may be made in respect of
certain series only of the Debt Securities Capable of Aggregation and, for the avoidance of doubt, the provisions described in this Term (36)(c) may be used for different groups of two or more series of Debt Securities Capable of Aggregation simultaneously.
(d) Reserved Matter:
In these Terms, “Reserved Matter” means any proposal to:


(i) change any date, or the method of determining the date, fixed for payment of principal or
interest in respect of this Series of the Bonds, to reduce or cancel the amount of principal or interest payable on any date in respect of this Series of the Bonds, or to alter the method of calculating the amount of any payment in respect of this Series of the Bonds on redemption or maturity or the date for any such payment;


(ii) to exchange or substitute this Series of the Bonds for, or convert this Series of the Bonds
into, other obligations or securities of the Issuer or any other person, or to modify any provision of these Terms in connection with any exchange or substitution of this Series of
the Bonds for, or the conversion of this Series of the Bonds into, any other obligations or


securities of the Issuer or any other person, which would result in the terms and conditions of this Series of the Bonds as so modified being less favorable to the Bondholders than:
(A) the provisions of the other obligations or debt securities of the Issuer or any other
person resulting from the relevant exchange or substitution or conversion; or
(B) if more than one series of other obligations or debt securities result from the relevant


exchange or substitution or conversion, the provisions of the resulting series of debt securities having the largest aggregate principal amount;
(iii) to change the definition of “debt securities” or “Debt Securities Capable of Aggregation”;
(iv) to change the currency in which any amount due in respect of this Series of the Bonds is
payable or the place of payment in which any payment in respect of this Series of the Bonds is to be made;


(i) amend the status of this Series of the Bonds under Term (6) (Status of this Series of the
Bonds) or any covenant under Term (8) (Negative Pledge and Covenants);
(ii) amend the obligation of the Issuer to pay additional amounts under Term (30) (Taxation
Considerations);
(iii) to change any provision of this Series of the Bonds describing circumstances in which


this Series of the Bonds may be declared due and payable prior to their scheduled maturity date, as set out in Term (35) (Events of Default; Events of Acceleration);
(iv) amend the law governing this Series of the Bonds, the arbitral tribunal of the jurisdiction


to which the Issuer has submitted in connection with this Series of the Bonds, or the Issuer’s waiver of immunity, in respect of actions or proceedings brought by any Bondholder as set out in Term (33) (Governing Law) and Term (34) (Dispute Resolution);
(v) to change the majority required to pass an Extraordinary Resolution, a Written Resolution


or any other resolution of holders of Debt Securities Capable of Aggregation or the number of percentage of votes required to be cast, or the number or percentage of debt securities required to be held, in connection with the taking of any decision or action by or on behalf of the holders of Debt Securities Capable of Aggregation or any of them;
(vi) to impose any condition on or otherwise change the Issuer’s obligation to make payments


of principal, interest or any other amount in respect of this Series of the Bonds, including by way of the addition of a call option;
(vii) change the definition of “Extraordinary Resolution”, or “Single Series Extraordinary
Resolution”, or “Multiple Series Two Limb Extraordinary Resolution”, or “Written Resolution”, or “Single Series Written Resolution”, or “Multiple Series Two Limb Written Resolution” in this Term (36);


(viii) change the definition of “outstanding” or modify Term (36)(i) (Bonds controlled by the
Issuer);
(ix) instruct any Bondholder or committee appointed on behalf of all Bondholders pursuant to
Term (36)(d), to withdraw, settle or compromise any proceeding or claim being asserted pursuant to Term (35) (Events of Default; Events of Acceleration);
(x) confer upon any committee appointed pursuant to Term (36)(h) (Representative


Committee of the Bondholders) any powers or discretions which the Bondholders could themselves exercise by Extraordinary Resolution;
(xi) amend this definition of “Reserved Matter”.
(e) Information
Prior to or on the date that the Issuer proposes any Extraordinary Resolution or Written
Resolution pursuant to Term (36)(b) (Modification of this Series of the Bonds only)or Term


(36)(c) (Multiple Series Aggregation – Two limb voting), the Issuer shall publish in accordance with Term (36)(j) (Aggregation Agent; Aggregation Procedures), and provide the Post-issuance Manager with, the following information:
(i) a description of the Issuer’s economic and financial circumstances which are, in the


Issuer’s opinion, relevant to the request for any potential modification or action, a description of the Issuer’s existing debts and a description of its broad policy reform programme and provisional macroeconomic outlook;
(ii) if the Issuer shall at the time have entered into an arrangement for financial assistance


with multilateral and/or other major creditors or creditor groups and/or an agreement with any such creditors regarding debt relief, a description of any such arrangement or agreement, and where permitted under the information disclosure policies of the multilateral or such other creditors, as applicable, copies of the arrangement or agreement shall be provided;
(iii) a description of the Issuer’s proposed treatment of securities representing External


Indebtedness that fall outside the scope of any multiple series aggregation and its intentions with respect to any other debt securities and its other major creditor groups; and
(iv) if any proposed modification or action contemplates debt securities being aggregated in
more than one group of debt securities, a description of the proposed treatment of each such group, as required for a notice convening a meeting of the Bondholders in Term


(36)(a) (Convening Meetings of Bondholders; Conduct of meetings of Bondholders; Written Resolutions).
(f) Claims Valuation
For the purpose of calculating the face value of this Series of the Bonds and any affected series of debt securities which are to be aggregated with this Series of the Bonds in accordance with Term (36)(c) (Multiple Series Aggregation – Two limb voting), the Issuer may appoint a Calculation Agent.


The Issuer shall, with the approval of the Aggregation Agent and any appointed Calculation Agent, promulgate the methodology in accordance with which the face value of this Series of the Bonds and such affected series of debt securities will be calculated.


In any such case where a Calculation Agent is appointed, the same person will be appointed as the Calculation Agent for this Series of the Bonds and each other affected series of debt securities for these purposes, and the same methodology will be promulgated for each affected series of debt securities.
(g) Manifest Error, etc.:
This Series of the Bonds and these Terms may, subject to the prior written approval of the Issuer, be amended without the consent of the Bondholders if:


(i) such amendment or modification increases undertakings of the Issuer;
(ii) the Issuer waives any of its rights and power;
(iii) such amendment or modification provides guarantee or collateral on this Series of the
Bonds;
(iv) the amendment or modification of this Series of the Bonds is of a formal, minor or
technical nature or is made to correct a manifest error;
(v) the amendment or modification is made to comply with mandatory provisions of PRC law to correct a manifest error; or


(vi) in the reasonable belief of the Issuer, the amendment or modification does not prejudice the interest of the Bondholders.
(h) Representative Committee of the Bondholders:
(i) Appointment: The Bondholders may, by a resolution passed at a meeting of the


Bondholders duly convened and held in accordance with Term (36) by a majority of more than 50% in aggregate principal amount of this Series of the Bonds then outstanding, or by notice in writing to the Post-issuance Manager signed by or on behalf of the Bondholders holding more than 50% in aggregate principal amount of this Series of the Bonds then outstanding, appoint any person(s) as a committee to represent the interests of the Bondholders if any of the following events occurs:


(a) an Event of Default or an Event of Acceleration;
(b) any event or circumstance which would, with the giving of notice, lapse of time, the
issuing of a certificate and/or fulfilment of any other requirement provided for in Term (35) (Events of Default; Events of Acceleration) become an Event of Default or an Event of Acceleration;
(c) any public announcement by the Issuer, to the effect that the Issuer is seeking or


intends to seek a rescheduling or restructuring of this Series of the Bonds or any other debt securities (whether by amendment, exchange offer or otherwise); or
(d) with the agreement of the Issuer, at a time when the Issuer has reasonably reached
the conclusion that its debt may no longer be sustainable whilst this Series of the Bonds or any other debt securities are outstanding.
(ii) Upon receipt of a written notice that a committee has been appointed in accordance with


Term (36)(h)(i), and a certificate delivered pursuant to Term (36)(h)(vi) (Certification), the Issuer shall give notice of the appointment of such a committee to:
(A) all Bondholders in accordance with Term (36)(j)(vii) (Manner of publication); and
(B) the holders of each affected series of debt securities in accordance with the terms and conditions of such affected series of debt securities, as soon as practicable after such written notice and such certificate are delivered to the Issuer.


(iii) Powers: Such committee in its discretion may, among other things, (i) engage legal


advisers and financial advisers to assist it in representing the interests of the Bondholders, (ii) adopt such rules as it considers appropriate regarding its proceedings, (iii) enter into discussions with the Issuer and/or other creditors of the Issuer, (iv) designate one or more members of the committee to act as the main point(s) of contact with the Issuer and provide all relevant contact details to the Issuer.


The Issuer shall pay any reasonably incurred fees and expenses of any such committee as may be agreed with it (including, without limitation, the fees and expenses of the committee’s legal advisers and financial advisers, if any) within 30 days of the delivery to the Issuer of a reasonably detailed invoice and supporting documentation.


Except to the extent provided in this Term (36)(h)(iii), such committee shall not have the ability to exercise any powers or discretions which the Bondholders could themselves exercise.
(iv) Engagement with the committee and provision of information
The Issuer shall:
(A) subject to Term (36)(h)(v), engage with the committee in good faith;
(B) provide the committee with information equivalent to that required under paragraph


(e) (Information) of Term (36) (Meetings of Bondholders) and related proposals, if any, in each case as the same become available, subject to any applicable information disclosure policies, rules and regulations; and
(v) If more than one committee has been appointed by the Bondholders and the affected
series of debt securities in accordance with the provisions of this Term (36)(h)


(Representative Committee of the Bondholders) and/or equivalent provisions set out in the terms and conditions of any affected series of debt securities, the Issuer shall not be obliged to engage with such committees separately. Such committees may appoint a single steering group (to be comprised of representatives from such committees), whereupon the Issuer shall engage with such steering group.
(vi) Certification


Upon the appointment of a committee, the person or persons constituting such a committee (the “Members”) will provide a certificate to the Issuer and the Post-issuance Manager signed by the authorized representatives of the Members, and the Issuer and the Post-issuance Manager may rely upon the terms of such certificate.
The certificate shall certify:
(A) that the committee has been appointed;
(B) the identity of the initial Members; and
(C) that such appointment complies with these Terms.


Promptly after any change in the identity of the Members, a new certificate which each of the Issuer and the Post-issuance Manager may rely on conclusively, will be delivered to the Issuer and the Post-issuance Manager identifying the new Members. Each of the Issuer and the Post-issuance Manager will assume that the membership of the committee has not changed unless and until it has received a new certificate.


The provisions of this Term (36)(h)(vi) shall apply, mutatis mutandis, to any steering group appointed in accordance with Term (36)(h)(iv) (Engagement with the committee and provision of information).


In appointing a person or persons as a committee to represent the interests of the Bondholders, the Bondholders may instruct a representative or representatives of the committee to form a separate committee or to join a steering group with any person or persons appointed for similar purposes by other affected series of debt securities.
(i) Bonds controlled by the Issuer:


For the purposes of (i) determining the right to attend and vote at any meeting of Bondholders, or the right to sign or confirm in writing, or authorize the signature of, any Written Resolution, and (ii) Term (35) (Events of Default; Events of Acceleration) and Term (36) (Meetings of Bondholders), any of this Series of the Bonds which are for the time being held by or on behalf of the Issuer or by or on behalf of any person which is owned or controlled directly or indirectly by the Issuer or by any public sector instrumentality of the Issuer, shall be disregarded and be deemed not to remain outstanding, where:


(i) “public sector instrumentality” means the National Bank of Hungary and any
department, ministry or agency of the government of Hungary or any corporation, trust, financial institution or other entity owned or controlled by the government of Hungary or any of the foregoing; and
(ii) “control” means the power, directly or indirectly, through the ownership of voting


securities or other ownership interests or through contractual control or otherwise, to direct the management of or elect or appoint a majority of the board of directors or other persons performing similar functions in lieu of, or in addition to, the board of directors of a corporation, trust, financial institution or other entity.


Any of this Series of the Bonds will also be deemed to be not outstanding if it has previously been cancelled or delivered for cancellation or held for reissuance but not reissued, or, where relevant, it has previously been called for redemption in accordance with its terms or previously become due and payable at maturity or otherwise and the Issuer has previously satisfied its obligations to make all payments due in respect of the Bond in accordance with its terms.


In advance of any meeting of Bondholders, or in connection with any Written Resolution, the Issuer shall provide to the Post-issuance Manager a copy of the certificate prepared pursuant to paragraph (iv) (Certificate) of Term (36)(j) (Aggregation Agent;


Aggregation Procedures), which includes information on the total principal amount of Bonds which are for the time being held by or on behalf of the Issuer or by or on behalf of any person which is owned or controlled directly or indirectly by the Issuer or by any public sector instrumentality of the Issuer and, as such, such Bonds shall be disregarded and deemed not to remain outstanding for the purposes of ascertaining the right to attend and vote at any meeting of Bondholders or the right to sign, or authorize the signature of, any Written Resolution in respect of any such meeting


. The Post-issuance Manager shall make any such certificate available for inspection during normal business hours at their specified offices and, upon reasonable request, will allow copies of such certificate to be taken.
(j) Aggregation Agent; Aggregation Procedures
(i) Appointment: The Issuer will appoint an Aggregation Agent to calculate whether a


proposed modification or action has been approved by the required principal amount outstanding of this Series of the Bonds, and, in the case of a multiple series aggregation, by the required principal amount of outstanding debt securities of each affected series of debt securities.


In the case of a multiple series aggregation, the same person will be appointed as the Aggregation Agent for the proposed modification of any provision of, or any action in respect of, these Terms of this Series of the Bonds and the terms and conditions or bond documentation in respect of each other affected series of debt securities. The Aggregation Agent shall be independent of the Issuer.
(ii) Extraordinary Resolutions: If an Extraordinary Resolution has been proposed at a duly


convened meeting of Bondholders to modify any provision of, or action in respect of, these Terms or the terms and conditions of other affected series of debt securities, as the case may be, the Aggregation Agent will, as soon as practicable after the time the vote is cast, calculate whether holders of a sufficient portion of the aggregate principal amount of this Series of the Bonds then outstanding and, where relevant, each other affected series of debt securities, have voted in favor of the Extraordinary Resolution such that the Extraordinary Resolution is passed


. If so, the Aggregation Agent will determine that the Extraordinary Resolution has been duly passed.
(iii) Written Resolutions: If a Written Resolution has been proposed under Term (36) to


modify any provision of, or action in respect of, these Terms or the terms and conditions of other affected series of debt securities, as the case may be, the Aggregation Agent will, as soon as reasonably practicable after the relevant Written Resolution has been signed or confirmed in writing, calculate whether holders of a sufficient portion of the aggregate principal amount of this Series of the Bonds then outstanding and, where relevant, each other affected series of debt securities, have signed or confirmed in writing in favor of the Written Resolution such that the Written Resolution is approved


. If so, the Aggregation Agent will determine that the Written Resolution has been approved.
(iv) Certificate: For the purposes of paragraph (ii) (Extraordinary Resolutions) and paragraph


(iii) (Written Resolutions) of this Term (36)(j), the Issuer will provide a certificate to the Aggregation Agent up to 3 days prior to, and in any case no later than, with respect to an Extraordinary Resolution, the date of the meeting referred to in paragraph (b) (Modification of this Series of the Bonds only) or paragraph (c) (Multiple Series Aggregation – Two limb voting) of Term (36) (Meetings of Bondholders), as applicable, and, with respect to a Written Resolution, the date arranged for the signing of the Written Resolution


.
The certificate shall:
(a) list the total principal amount of this Series of the Bonds and, in the case of a
multiple series aggregation, the total principal amount of each other affected series of debt securities outstanding on the record date; and
(b) clearly indicate this Series of the Bonds and, in the case of a multiple series


aggregation, debt securities of each other affected series of debt securities which shall be disregarded and deemed not to remain outstanding as a consequence of paragraph (i) (Bonds controlled by the Issuer) of Term (36) (Meetings of Bondholders) on the record date identifying the holders of this Series of the Bonds and, in the case of a multiple series aggregation, debt securities of each other affected series of debt securities.


The Aggregation Agent may rely upon the terms of any certificate, notice, communication or other document believed by it to be genuine.
(v) Notification: The Aggregation Agent will cause each determination made by it for the
purposes of this Term (36)(j) (Aggregation Agent; Aggregation Procedures) to be notified to the Post-issuance Manager and the Issuer as soon as practicable after such determination. Notice thereof shall also promptly be given to the Bondholders.


(vi) Binding nature of determinations; no liability: All notifications, opinions, determinations, certificates, calculations, quotations and decisions given, expressed, made or obtained for


the purposes of this Term (36)(j) (Aggregation Agent; Aggregation Procedures) by the Aggregation Agent and any appointed Calculation Agent will (in the absence of manifest error) be binding on the Issuer, the Post-issuance Manager, the Bondholders and (subject to as aforesaid) no liability to any such person will attach to the Aggregation Agent or the Calculation Agent in connection with the exercise or non-exercise by it of its powers, duties and discretions for such purposes.


(vii) Manner of publication: The Issuer will publish all notices and other matters required to
be published pursuant to these Terms including any matters required to be published pursuant to Term (36) (Meetings of Bondholders), including but not limited to, this Term
(36)(j) (Aggregation Agent; Aggregation Procedures) and Term (36)(h) (Representative Committee of the Bondholders), and Term (35) (Events of Default, Events of Acceleration):


(a) on https://akk.hu; (b) through the website of the Custody Institution designated by PBOC (http://www.shclearing.com), China Money (http://www.chinamoney.com.cn), and
BFAE (http://www.cfae.cn/); and
(c) in such other places and in such other manner as may be required by applicable law or regulation.
2. Plan of Issuance for this Series of the Bonds
(1) Centralized Bookbuilding arrangements


This Series of the Bonds will be issued through centralized Bookbuilding at BFAE and public offering. Specific methods and requirements for investors to participate in the Bookbuilding placement of this Series of the Bonds will be set forth in the Hungary 2021 Series 1 RMB Green Bonds (Bond Connect) Subscription Period and Subscription Indicative Statement to be published.


Underwriting Syndicate members must submit to the Bookrunner the Hungary 2021 Series 1 RMB Green Bonds (Bond Connect) Subscription Offer (the “Subscription Offer”) through the centralized bookbuilding system between 9:00 am and 6:00 pm on 14 December 2021, and the time of subscription shall be at the time at which the Subscription Offer is submitted to the Bookrunner through the centralized bookbuilding system.


The minimum amount to be subscribed by an investor shall be RMB10,000,000 and integral multiples of RMB10,000,000 in excess thereof.
(2) Plan of distribution
Subscribers of this Series of the Bonds shall be institutional investors in the Interbank Market unless otherwise restricted by the laws or regulations.


Domestic investors shall open Class A or B holders’ accounts with the Custody Institution designated by PBOC, or open Class C holders’ accounts through settlement agencies on the Interbank Market. Other institutional investors may open Class C holders’ accounts with the Custody Institution designated by PBOC through the underwriters or settlement agencies on the Interbank Market.


Offshore investors participating in the subscription of this Series of the Bonds through the “Bond Connect” regime should, in connection with the registration, custody, clearing, settlement of this Series of the Bonds and remittance and conversion of funds, comply with applicable laws and regulations, including the Interim Measures for the Connection and Cooperation between the Mainland and the Hong Kong Bond Market published by PBOC, as well as rules of other relevant parties and service providers


.
(3) Payment and Settlement Arrangements
Payment time: Prior to 11:00 am on 16 December 2021.
The Bookrunner shall send the Hungary 2021 Series 1 RMB Green Bonds (Bond Connect) Placement Confirmation and Notice of Payment (the “Notice of Payment”) through the centralized bookbuilding system on 14 December 2021, giving notice to each Underwriting Syndicate member their respective placement amount and subscription money payable, payment date and accounts.


Members of the Underwriting Syndicate shall, prior to 11:00 am on 16 December 2021, remit the proceeds to the following account in accordance with their respective underwritten amount as set forth in the Notice of Payment by the Bookrunner:
Account name: Head Office of Bank of China Limited
Account bank: Head Office of Bank of China Limited
Account number: 110400393
CNAPS code: 104100000004


Any failure by a qualified underwriter to pay in full shall be dealt with in accordance with relevant rules of NAFMII and the relevant provisions of the underwriting agreement (including any supplements or amendments thereto) and the underwriting syndicate agreement, if any.
Upon the completion of the issuance of this Series of the Bonds, such Bonds can be transferred or pledged in accordance with the rules and regulations issued by the competent authorities.


(4) Registration and Custody Arrangements
This Series of the Bonds will be issued in real name book-entry form. Bonds subscribed by investors will be registered and held in a custodian account with the Custody Institution designated by PBOC.


Investors are not required to pay additional fees for the preparation of subscription, registration or custody of this Series of the Bonds. Investors shall comply with relevant provisions of the Custody Institution designated by PBOC in their preparation of the registration or custodian procedures.


If there is any conflict or contravention between the above provisions relating to the subscription and custody of this Series of the Bonds and any laws, regulations or rules of the Custody Institution designated by PBOC currently in force or revised or enacted from time to time, the provisions of any laws, regulations or rules of the Custody Institution designated by PBOC currently in force or revised or enacted from time to time shall prevail.
(5) Trading Arrangements


Trading in this Series of the Bonds on the Interbank Market will commence on the Business Day following the bond registration date, in accordance with the rules of the Interbank Market.
3. Issuer’s Representations and Warranties
The Issuer represents and warrants to and (where applicable) agrees with the Bondholders that:
(1) the Issuer is a sovereign state, a legal person under Hungarian law;
(2) the Issuer as legal person has full power and capacity to execute and issue this Offering


Circular, to establish the Programme, to create and issue this Series of the Bonds, and to perform its obligations thereunder, and has taken all necessary actions to approve and to authorize the same;
(3) the issuance of this Series of the Bonds by the Issuer, the performance of its obligations


under this Series of the Bonds and the Offering Circular and the exercise of any of its rights under this Series of the Bonds and the Offering Circular will not contravene any laws (including budget acts), regulations, rules, decisions, orders, authorizations, agreements or obligations applicable to the Issuer, and which would cause a significant adverse impact on the Issuer’s ability to pay, or if there exists any contravention, the Issuer has obtained effective waivers from the relevant regulatory authorities or administrative departments, and such waivers are legal, valid and can be specifically enforced in accordance with the laws of the PRC and Hungary


; and
(4) with respect to this Series of the Bonds, and in compliance with the requirements of
regulatory authorities, any relevant administrative departments or other related authorities, the Issuer will submit, register or file on time, in the appropriate form, all reports, resolutions, returns or any required documents.
4. Investor’s Representations and Warranties
Each Investor represents and warrants to and (where applicable) agrees with the Issuer that:


(1) investors possess membership qualifications for the Interbank Market;
(2) investors have sufficient power, authorizations and legal rights to purchase this Series of the
Bonds, and to do such acts of a legal person or other acts necessary for the purchase of this Series of the Bonds;
(3) the purchase of this Series of the Bonds or the performance of obligations under this Series of


the Bonds or the exercise of any rights under this Series of the Bonds by the investors will not contravene any laws, regulations, rules, decisions, orders, authorizations, agreements or obligations applicable to the investors;
(4) investors purchasing this Series of the Bonds have fully understood and seriously considered
each and every risk relating to this Series of the Bonds, including but not limited to the risks described in this Offering Circular;


(5) investors have fully understood and accepted the provisions in this Offering Circular in
respect of the rights and obligations under this Series of the Bonds and agrees to be bound by them, and have obtained relevant advice from legal or other professional advisers;
(6) subject to the Terms set out under Section 5, after the completion of the issuance of this


Series of the Bonds, in accordance with the future needs of the Issuer and upon obtaining the registration with NAFMII, the Issuer may continue to issue debt instruments which either rank equally with or senior to this Series of the Bonds, without requiring the consent of the investors of this Series of the Bonds;


(7) where any modifications to the Terms of this Series of the Bonds are made in accordance with applicable laws and regulations and the Terms of this Series of the Bonds as set out in Term
(32) of this Section 5, upon the approval by the relevant regulatory authorities (if applicable) and after disclosure in respect thereof in accordance with applicable laws and regulations, the investor agrees to and accepts such modifications; and


(8) offshore investors participating in the subscription of this Series of the Bonds through the
“Bond Connect” regime should, in connection with the registration, custody, clearing,


settlement of this Series of the Bonds and remittance and conversion of funds, comply with applicable laws and regulations, including the Interim Measures for the Connection and Cooperation between the Mainland and the Hong Kong Bond Market published by PBOC, as well as rules of other relevant parties and service providers.
SECTION 6: DESCRIPTION OF THE ISSUER
1. Overview of Hungary
(1) Basic Information about the Issuer
Chinese name of the Issuer: 匈牙利 (由政府债务管理机构私人股份有限公司代表)


English name of the Issuer: Hungary (Represented by Government Debt Management Agency Private Company Limited by Shares)
Address: Government Debt Management Agency Pte Ltd., Krisztina tér 2, H-1013, Budapest, Hungary
Contact: Capital Markets Department
Tel: +361 488 9428, +361 488 9432
Fax: +361 488 9425
E-mail: capital.markets@akk.hu
Website: https:// akk.hu/hu
(2) Ratings by International Rating Agencies


Set forth below are the current ratings assigned by international rating agencies to Hungary as of the date of this Offering Circular.
[Set forth below are the current ratings assigned by international rating agencies to Hungary as of the date of this Offering Circular.
(3) General]


"Rating Agency":"Moody’s"
"Government Bond Rating":"Baa2"
"Outlook":"Stable"
"Rating Agency":"Standard & Poor’s"
"Government Bond Rating":"BBB"
"Outlook":"Stable"
"Rating Agency":"Fitch"
"Government Bond Rating":"BBB"
"Outlook":"Stable"


[(3) General
Hungary (until 31 December 2011, the country was known as “The Republic of Hungary,” hereinafter referred to as “Hungary”) lies in Central Europe and covers an area of approximately 93,000 square km. Hungary is bordered by seven countries: Slovakia and Ukraine to the north, Romania to the east, Serbia and Croatia to the south and Slovenia and Austria to the west. The Danube River crosses Hungary, connecting the country with ports on the Black Sea. Hungary has historically been a nexus of social and cultural life and a trade link between Eastern and Western Europe. Hungary’s capital is Budapest.]22 Serbia Miros R Bnja Komlo 25 50mi pebezg Mako Hodmezovasarheiy Szekszerd 50km 25 Kickunhalas Oroshiza Danube R Szantee Kiskunfoyloghaza Boglarlele Bekesabe Kacskemat Dunaujvaros Mezotir Nagkotos Hungary Romania Veszprem Szolnok Torokazentrrikloe S


[(3) General
Hungary (until 31 December 2011, the country was known as “The Republic of Hungary,” hereinafter referred to as “Hungary”) lies in Central Europe and covers an area of approximately 93,000 square km. Hungary is bordered by seven countries: Slovakia and Ukraine to the north, Romania to the east, Serbia and Croatia to the south and Slovenia and Austria to the west. The Danube River crosses Hungary, connecting the country with ports on the Black Sea. Hungary has historically been a nexus of social and cultural life and a trade link between Eastern and Western Europe. Hungary’s capital is Budapest.]zekesldhenvar Cepled Varpalota Papa Erd Jaszbereny Budapest Debrecen Tatabanya Esztergom Hajdubbszormeny Vac Gyongyos Eger Tiszaujvaros Mogonmagyarovar Maieszalka Nyiregyhaza Salgotadan Mskolc Kazincbafcika Satoraliaujhely Slovakia Ukraine Austria ne


[(3) General
Hungary (until 31 December 2011, the country was known as “The Republic of Hungary,” hereinafter referred to as “Hungary”) lies in Central Europe and covers an area of approximately 93,000 square km. Hungary is bordered by seven countries: Slovakia and Ukraine to the north, Romania to the east, Serbia and Croatia to the south and Slovenia and Austria to the west. The Danube River crosses Hungary, connecting the country with ports on the Black Sea. Hungary has historically been a nexus of social and cultural life and a trade link between Eastern and Western Europe. Hungary’s capital is Budapest.]gro Italy Monte Buigana Andorra vina Manino Serbia Herzego San Monaco Bosnia and Croatia nia Slove Romania land Hungary ALiecht Switzer- France Austria Slovakia Luxembourg Czech Republic Ukr alne Germany Belgium Poland jands Nether Kingdom Belarus United reiand Lithuania mar


Hungary (until 31 December 2011, the country was known as “The Republic of Hungary,” hereinafter referred to as “Hungary”) lies in Central Europe and covers an area of approximately 93,000 square km. Hungary is bordered by seven countries: Slovakia and Ukraine to the north, Romania to the east, Serbia and Croatia to the south and Slovenia and Austria to the west. The Danube River crosses Hungary, connecting the country with ports on the Black Sea.


As of 1 January 2021, the population of Hungary was approximately 9.7 million. Approximately 70.2% of the population lived in urban areas and 1.7 million lived in Budapest, which is the political, administrative, cultural and commercial center of Hungary. While approximately 84% of the population is Magyar (or Hungarian), there are minorities of Armenian, Bulgarian, Croat, German, Greek, Polish, Roma, Romanian, Ruthenian, Serb, Slovak, Slovenian and Ukrainian ethnicity.


Hungary is a republic with a representative form of government. In 1989, the previous Constitution was adopted, instituting a multi-party democratic government. On 18 April 2011, Parliament adopted the Fundamental Law of Hungary as the new constitution of Hungary, which was promulgated on 25 April 2011 and went into effect on 1 January 2012. Until 31 December 2011, the country was known as “The Republic of Hungary”.


Pursuant to the Fundamental Law, the country changed its name and is now known as “Hungary”.


In 2020, Hungary’s GDP decreased by 4.7%. Value added by the agricultural industry declined as a result of less favorable weather conditions as compared to 2019, with the sector decreasing by 8.7%. As external demand weakened, value added by the industrial sector (i.e., manufacturing, mining and quarrying and electricity) decreased by 7.0%. Construction decreased by 10.9% as infrastructure investments and home building activities weakened.


The ongoing COVID-19 pandemic and the lockdown measures introduced as a result of the pandemic contributed to the decline of value added in both the industrial and the construction sector. Value added by the services sector fell significantly, the sector’s growth contribution to GDP growth was negative and amounted to 2.0 percentage points.


The COVID-19 pandemic and the resulting lockdown measures affected several service sectors (including accommodation and food service activities and transportation and storage) significantly.


In 2020, domestic use decreased by 2.7%, and consumption decreased by 0.9%. Gross fixed capital formation decreased by 6.9%. Gross capital formation decreased by 7.0%. Positive but declining net exports turned the 2.7% decline of domestic use into a 4.7% decrease of GDP. Exports decreased by 5.9% and imports decreased by 3.5%. Exports decreased to a larger extent compared to imports, indicating a significant deterioration of external demand.


The ongoing COVID-19 pandemic significantly weakened both external and internal demand.


In the first quarter of 2021, Hungary’s GDP decreased by 2.0%. Value added by the agricultural sector increased because weather conditions were more favorable compared to the corresponding period of the previous year, with the sector growing by 2.6%. Value added by the industrial sector (i.e., manufacturing, mining and quarrying and electricity) increased by 3.4% indicating an improving external demand. Construction decreased by 6.3%. The value added by the service sector decreased by 3.0%.


The still ongoing pandemic significantly weakened both external and internal demand.
In the first quarter of 2021, domestic use decreased by 4.7%, and consumption decreased by 2.6%. Gross fixed capital formation increased by 3.0%. Gross capital formation decreased by 11.6% mainly as a result of changes in inventories. Net exports dampened the 4.7% decrease of domestic demand to a moderate 2.0% decrease of GDP. Growth in exports amounted to 3.4%, significantly exceeding growth in imports of 0.5%.


Consequently, the growth contribution of the export sector was significant as net exports increased relative to the corresponding period of 2020.


In the second quarter of 2021, Hungary’s GDP increased by 17.8% relative to the corresponding period of the previous year. Value added by the agricultural sector increased because weather conditions were more favorable compared to the corresponding period of the previous year, with the sector growing by 1.3%. Value added by the industrial sector (i.e., manufacturing, mining and quarrying and electricity) increased by 36.6% indicating an improving internal demand. Construction increased by 18.


4%. The value added of the services sector increased by 12.6%. The ongoing
pandemic significantly weakened both external and internal demand in the corresponding period of 2020 resulting in a low base.


In the second quarter of 2021, domestic use increased by 11.1%, and consumption increased by 7.0% relative to the corresponding period of the previous year. Gross fixed capital formation increased by 11.7%. Gross capital formation increased by 22.5% partly as a result of changes in inventories. Net exports increased the 11.1% increase of domestic demand to a 17.8% increase of GDP. Growth in exports amounted to 34.2%, significantly exceeding growth in imports of 24.3%.


Consequently, the growth contribution of the export sector was significant as net exports increased relative to the corresponding period of 2020.
(4) Geography and Population


Hungary lies in Central Europe and covers an area of approximately 93,000 square km. Hungary is bordered by seven countries: Slovakia and Ukraine to the north, Romania to the east, Serbia and Croatia to the south and Slovenia and Austria to the west. The Danube River crosses Hungary, connecting the country with ports on the Black Sea. Hungary has historically been a nexus of social and cultural life and a trade link between Eastern and Western Europe. Hungary’s capital is Budapest.


Between 2007 and 2018, the infant mortality rate fell from 5.9 to the historical minimum of 3.4 deaths per 1000 live births (a 28% decrease between 2010 and 2019).
The following table sets forth certain information with respect to the population growth rate in Hungary for the periods indicated:
Table 1: Population Growth Rate


[Table 1: Population Growth Rate
__________________]

 2018 2019 2020

Population (in thousand persons) .............. 9,778 9,773 9,770

Decrease in population (%) ....................... (0.2) (0.1) (0.0)
__________________
Source: Hungarian Central Statistical Office (“CSO”)
The following table sets forth the age distribution for the population of Hungary for the periods indicated:
Table 2: Age Distribution of the Population of Hungary


Immediately after World War II, Hungary was governed by a “grand coalition” of Hungarian political parties.
During the late 1980s, the political system in Hungary changed dramatically. On 23 October 1989, Hungary was proclaimed a republic and Hungary’s name was changed from the “Hungarian People’s Republic” to the “Republic of Hungary.” Also in 1989, the Hungarian constitution was substantially


amended. Under this new constitution, Hungary instituted a multi-party democratic government. In 1990, Hungary held multi-party elections for the first time since 1947.


On 18 April 2011, Parliament adopted the Fundamental Law of Hungary as the new constitution of Hungary (“New Constitution” or, if referring to any constitution in effect at the time, the “Constitution”). The New Constitution was promulgated on 25 April 2011 and went into effect on 1 January 2012. The major developments of the New Constitution included, inter alia, the following:  the new name of the country, which is “Hungary”;  the notion of a “Cardinal Act”, a type of Act which may only be passed, modified or repealed


by the votes of two-thirds of the present Members of Parliament;  the principle of balanced, transparent and sustainable management of the budget, to be enforced primarily by Parliament and the Government;  the notion of autonomous regulatory organizations, to be established by a Cardinal Act of


Parliament;  the main responsibilities of the Constitutional Court;  the function of the Commissioner for Fundamental Rights;  the framework rules for public finances;  limitations on the level of government debt; and  the fundamental rules for the responsibilities and composition of the Budgetary Council and rules for the appointment of its president.
(b) Constitutional Provisions Relating to Budget Management and Public Finances


Aimed at the balanced, transparent and sustainable management of the budget, the New Constitution sets certain general rules for public finances.


Under the New Constitution, Parliament is not entitled to adopt an Act on the central budget that would result in the level of government debt exceeding 50% of the gross domestic product (“GDP”). Furthermore, in the course of implementation of the central budget, no loans may be drawn and no financial obligations may be undertaken on behalf of Hungary if such an undertaking results in a level of government debt exceeding 50% of GDP.


The New Constitution includes certain exemptions and transitional rules that apply until the level of government debt is reduced below 50% of GDP.
Until the level of government debt falls below 50% of GDP, Parliament is obligated to adopt an Act on the central budget that provides for a decrease of the ratio of government debt to gross domestic product.


Until the level of government debt falls below 50% of GDP, in the course of implementation of the central budget, Parliament is not allowed to draw a loan or undertake a financial obligation on behalf of Hungary that would result in an increase of the ratio of government debt to GDP from the previous calendar year.


As long as government debt exceeds 50% of GDP, the Constitutional Court may, within its competence pursuant to the respective provisions of the New Constitution, review Acts on (i) the central budget; (ii) implementation of the central budget; (iii) central taxes; (iv) stamp duties and contributions; (v) customs duties;


and (vi) the central requirements related to local taxes for the conformity, of each of the foregoing, with those aspects of the New Constitution relating to rights to life and human dignity, to the protection of personal data, to the freedom of thought, conscience and religion, or in connection with the rights related to Hungarian citizenship, and the Constitutional Court may only annul these Acts for violation of these rights.


Acts governing the above matters may be annulled by the Constitutional Court without restriction if the procedural requirements required by the New Constitution for the creation and publication of such rules of law have not been complied with.


Upon the occurrence of a “special legal order,” which can be declared by the President, the Government or Parliament, Parliament and the Government are entitled to deviate from the limitations described above to the extent necessary to mitigate the effects of the events and circumstances
triggering the special legal order, or, in the event of a significant and enduring national economic


recession, to the extent necessary to restore the balance of the national economy. “Special legal order” means a state of national crisis, state of emergency, state of terrorist threat, state of preventive defense, event of unexpected attack or state of danger.
The method for calculating government debt and GDP and the rules for implementation of the government debt limitations mentioned above are determined in an Act of Parliament.


The New Constitution prescribes that Parliament will pass Cardinal Acts to regulate the burden of public finances; the fundamental rules of the pension system; the establishment of autonomous regulatory organs; the detailed rules of the responsibilities, organization and operation of the Constitutional Court; the detailed rules of the operation of the Budgetary Council; and the method for calculating the level of government debt and GDP.


The New Constitution provides a constitutional basis for the operation of the Budgetary Council and enhances the current statutory provisions applicable to the Council.
(c) Constitutional Amendments
The New Constitution has been amended nine times, with the most recent amendment adopted in 2020.


The first amendment to the New Constitution extended the law on the remuneration of the President of Hungary to the former Presidents of Hungary. The second amendment to the New Constitution would have amended only the transitional provisions, but the Constitutional Court annulled these provisions.


The third amendment to the New Constitution stipulated that adoption or amendment of laws pertaining to the acquisition and use of agricultural land and forests in Hungary will be passed by Cardinal Acts.


In response to several decisions of the Constitutional Court, the fourth amendment to the New Constitution (“Fourth Amendment”) was adopted by Parliament on 11 March 2013. The Fourth Amendment is intended, inter alia, to implement several of the Transitional Provisions of the New Constitution that were annulled by the Constitutional Court, such as the competence of Parliament to recognize religious groups as churches and the limitation of political advertising.


Pursuant to the Fourth Amendment, any political advertising may be broadcast on radio or television channels free of charge and, during the campaign period preceding the national and European parliamentary elections, solely via the public radio and television channels. It therefore eliminated mandatory campaign silence and the prohibition on publishing poll numbers on and before the election day.


The Fourth Amendment does not include a pre-registration requirement regarding parliamentary elections, in compliance with the previous decision of the Constitutional Court.


Furthermore, the Fourth Amendment narrowed the competence of the Constitutional Court by providing that the Constitutional Court would only undertake a review of the constitutionality of provisions of law brought before it and would not be entitled to extend its review to other provisions not challenged, unless those provisions have a close and substantial connection with a provision of law under review.


In accordance with the Fourth Amendment, decisions of the Constitutional Court that predate the date that the New Constitution went into effect were annulled; however, the legal consequences upon parties to the cases that produced such decisions were not affected.
On 5 July 2013, Parliament adopted an Act on the amendment of certain laws in connection with the Fourth Amendment of the New Constitution.


This Act modifies the authority of the Constitutional Court and implements new control functions of the Constitutional Court, such as preliminary control and—if initiated within 30 days by the Government, 25% of the Members of Parliament, the President of the Curia, the General Prosecutor or the parliamentary commissioner—subsequent control of laws according to the New Constitution or any amendments thereto.


Furthermore, the Act provides for preliminary constitutional review of normative decrees to ensure constitutional review of the operating rules of Parliament (including technical details of submissions, interpellations, and voting), irrespective of the legal source of such rules.
The fifth amendment to the New Constitution was adopted on 16 September 2013, and provides the


constitutional basis for the proposed merger of central bank functions and financial supervisory authority functions, as well as elimination of the Hungarian Financial Supervisory Authority (the “HFSA”). These functions are now all within the purview of the National Bank of Hungary (the “NBH”). See “Monetary and Financial System” for more information on the functions of the NBH.


On 7 June 2016, Parliament adopted the sixth amendment to the New Constitution, which enables a two-thirds majority of the Members of Parliament present to declare a state of terrorism threat for a fixed term at the initiative of the government of Hungary (the “Government”) in the event of a significant and direct threat of a terrorist attack or in the event of an actual terrorist attack.


Upon the authorization of Parliament, the Hungarian Government may pass decrees by virtue of law, suspend the application of certain laws, depart from effective statutory regulations and adopt other extraordinary measures.


The seventh amendment to the New Constitution (“Seventh Amendment”) was adopted on 20 June 2018. The Seventh Amendment prohibits the resettlement of foreign populations in Hungary and states that non-Hungarian citizens who have arrived into Hungary from a country in which they are not persecuted or not in direct danger of being persecuted may not be eligible for asylum.


The Seventh Amendment also creates the organizational foundations for a separate public administration court system and creates the legal conditions for banning people from living in public spaces. Furthermore, it provides that the exercise of freedom of expression and the right of assembly will not harm others’ private and family life and their homes.


The Seventh Amendment also aims to define the main components of national identity in order to clarify the interconnection between the national and European Union powers and laws.
On 10 December 2019, Parliament adopted the eighth amendment to the New Constitution, which removed provisions stipulating the setting up of a separate public administrative court system which had been provided for in the Seventh Amendment.


On 15 December 2020, Parliament adopted the ninth amendment to the New Constitution (“Ninth Amendment”). The Ninth Amendment stipulates that Hungary protects children, protects individuals’ rights to self-identify according to their sex at birth, and states that children will have upbringings based on the values of Hungary’s constitutional identity and Christian culture.


The Ninth Amendment also provides that “Hungary protects the institution of marriage as the association between a man and a woman and the family as the basis for the survival of the nation. The foundation of the family is marriage and the parent-child relationship. The mother is a woman, the father is a man.” Additionally, the Ninth Amendment defined public money as the revenues, expenditures and claims of the state.
(d) President


The President of Hungary is the head of the state, elected by Parliament for a term of five years. The President may, but need not, be elected from among the members of Parliament (but cannot be both President and a member of Parliament at the same time). The President may be re-elected only once. The President’s authority is limited. Most actions taken by the President require the countersignature of the Prime Minister or another minister.


Since 1 January 2012, the main powers of the President include:  representing the nation as head of state;  express consent of the binding force of international treaties and agreements with prior authorization given by Parliament;  attending and addressing any session of Parliament;  acting as commander-in-chief of the armed forces;  setting the date for Parliamentary and local elections;  initiating certain measures in Parliament;  initiating referenda;


 appointing and removing, among others, the President and Vice-Presidents of the NBH; and
 granting pardons.
On 2 May 2012, Parliament elected Mr. János Áder as President, and he took office on 10 May 2012. Mr. Áder was reelected on 13 March 2017. The next presidential election is expected to be held in 2022.
(e) Government


The Government consists of the Prime Minister and other ministers forming the Cabinet (currently fourteen ministers, including three deputy prime ministers and three ministers without portfolio). The Government is charged with the executive function of Hungary and with proposing legislation to Parliament. The Prime Minister and the Government’s program is approved by a simple majority vote of Parliament.


The Prime Minister is nominated by the President of Hungary and elected by Parliament to serve for four years. If the Prime Minister loses his or her office for any reason, such as resignation, death or removal through a no-confidence vote, and the Government therefore loses its mandate, a new Prime Minister would be elected by Parliament with a mandate that expires after the next general election.


The other ministers in the Cabinet are nominated by the Prime Minister and appointed and removed by the President. There is one deputy prime minister nominated by the Prime Minister, who would replace the Prime Minister if he or she loses office by reason of death, loss of voting right or conflict of interest until the new Prime Minister is elected. On 18 May 2018, the current Government was formally inaugurated.


In the current governmental structure, the Minister of Finance is responsible for public finances.
(f) Parliament


The single-chamber Hungarian Parliament is the country’s supreme legislative body. Parliament elects the President, the Prime Minister, the members and President of the Constitutional Court, the President of the State Audit Office, the President of the Supreme Court (the Curia), the President of the Supreme Court of Administration and the Attorney General. See “Recent Political Developments.”


Members of Parliament are elected by popular vote for four-year terms. Elections are held using a combination of individual constituency voting (the candidate receiving the most votes in a particular district being elected from that district) and proportional voting (parties receiving at least 5% of the popular vote proportionally divide a fixed number of seats). Hungary last held Parliamentary elections in April 2018. The next Parliamentary elections are scheduled to be held in 2022.


See “Recent Parliamentary Elections.”
In April 2014 and April 2018, pursuant to the Act on the Elections of Members of Parliament of Hungary, the 199 Members of Parliament were elected by general, equal, secret and direct ballot. The system is a mixed and single-round election system.
(g) Judiciary


The Hungarian judiciary consists of the Curia, the county tribunals, the Metropolitan Tribunal of Budapest, the district courts and the labor courts. Legislation may provide for special courts to be convened for certain types of cases. Five Courts of Appeal located in Budapest, Pécs, Szeged, Debrecen and Győr have regional jurisdiction. The Curia sets guidelines for the judicial process of every court. Resolutions concerning uniformity are binding on all courts.


Judges are independent and are subordinate only to the law. District courts have original jurisdiction. The Courts of Appeal, the county tribunals and the Metropolitan Tribunal of Budapest have both original and appellate jurisdiction. The President of Hungary nominates, and Parliament elects, the President of the Curia. The President of the Curia nominates, and the President of Hungary appoints, the Vice-Presidents of the Curia.


The President of Hungary also appoints and removes professional (non-arbitration) judges. The President of Hungary may only remove professional judges by following certain procedures prescribed by law.


The Constitutional Court is separate from the regular Hungarian judiciary. It decides the constitutionality of legislation and other actions as set forth in the Hungarian Constitution. The Constitutional Court may annul those provisions of a law or legal measure requested to be reviewed that it determines to be unconstitutional, unless for those other provisions that were not requested to be


reviewed are closely connected to the provisions to be reviewed. Any person may initiate proceedings in the Constitutional Court to address issues within its jurisdiction.


The New Constitution includes changes to the main responsibilities of the Constitutional Court, entitling the Constitutional Court to annul a legal rule or a single judgment or to apply other specific legal consequences set forth by Cardinal Act only if such legal rule or judgment is contrary to the Constitution or an international agreement of Hungary. The New Constitution also increases the number of members on the Constitutional Court to 15 and the term of their mandates to 12 years.


Members and the President of the Constitutional Court are elected by a two-thirds majority of the Members of Parliament, and Members of the Constitutional Court may not be re-elected. In June 2011, Parliament elected five new members of the Constitutional Court, who filled their positions on 1 September 2011.


Legislation facilitating and regulating the market economy is relatively new in Hungary. Consequently, Hungarian courts are generally less experienced than their Western European counterparts in areas such as securities, banking and commercial law. Parties often refer disputes relating to such matters to the court of arbitration attached to the Hungarian Chamber of Commerce and Industry or other arbitration forums.


On 11 February 2013, Parliament adopted the Act on the New Civil Code (the “New Civil Code”), which went into effect on 15 March 2014. The New Civil Code abolished Act No. 4 of 1959 on the Civil Code (the “Old Civil Code”) and introduced major changes to the Old Civil Code, such as broadening its scope to include family law and company law, which previously were regulated by separate Acts.


Furthermore, some new types of contracts are specified and regulated by the New Civil Code, such as intermediary (agency) contracts, trust asset management contracts, distribution contracts, franchise contracts, factoring contracts and financial lease contracts.
Several transitional provisions govern legal relationships under the Old Civil Code. For example, any legal fact or legal relationship arising or declared after 15 March 2014 (the “Effective Date”) is governed by the New Civil Code.


However, for contracts and other engagements concluded before the Effective Date, the Old Civil Code continues to govern any legal fact or legal relationship arising or declared under such contracts or engagements, including those that take place after the Effective Date.


As of the Effective Date, several other Acts took effect in accordance with new institutions introduced by the New Civil Code, including the Act on Asset Managers of Trusts and Rules of Their Activities, an Act that regulates collective investment forms and their managers and an Act that governs registration of collateral or security interests.


On 22 November 2016, Parliament adopted the Act on the New Code of Civil Procedure, which went into effect on 1 January 2018. The New Code of Civil Procedure sought to modernize and professionalize litigation. Accordingly, the New Code of Civil Procedure introduces mandatory legal representation, except in some cases tried before local courts where litigants without legal representation will be aided by the use of standard forms and templates and more active judges.


To promote the timely resolution of disputes and prevent parties from unduly delaying proceedings, the New Code of Civil Procedure introduces a “split” litigation structure, consisting of (i) the pre-trial phase and (ii) the trial on the merits. This structure is inspired by Roman law, where civil proceedings were conducted in two parts (“in iure” and “apud iudicem”).
(h) Parliamentary Commissioners


On 11 July 2011, Parliament adopted the Act on the Commissioner for Fundamental Rights in compliance with the New Constitution. The Commissioner for Fundamental Rights and his two deputies replaced the former system, in which four Parliamentary Commissioners were primarily tasked with defending the public’s rights vis-à-vis the public administration.


The Commissioner and his deputies are not Members of Parliament and are elected by a two-thirds majority of the Members of Parliament for a term of six years. One of the deputies is responsible for safeguarding the constitutional rights and interests of future generations, while the other deputy is responsible for safeguarding the rights of minorities living in Hungary.


The Commissioner for Fundamental Rights has broader responsibility than the former Parliamentary Commissioners and may conduct special proceedings against organizations that are not public bodies (e.g., companies, banks, and social organizations) upon a complaint that such organization seriously violates a fundamental right of a
large number of natural persons.


On 11 July 2011, Parliament also adopted the Act on Informational Self-Determination and Freedom of Information. Pursuant to this Act, a new independent authority was established on 1 January 2012: the National Agency for Data Protection and Freedom of Information, which replaced the Data Protection Commissioner’s Office.


This Agency is responsible for supervision and facilitation of the enforcement of data protection rights and freedom of information in Hungary, including maintenance of the Data Protection Register and provision of opinions on related legislative proposals and categories of official secrets.
(i) Local Government


Hungary is divided into administrative units, which include the capital (Budapest), counties, cities, towns and villages. Local governments are autonomous, manage local affairs democratically and may set the rates of certain limited local taxes. The Hungarian Constitution grants all local authorities the same fundamental rights; however, the duties and responsibilities of local governments may differ according to national and local legislation.


Local governments consist of representative bodies, whose members are elected to five-year terms. Decisions of local authorities may only be revised if they conflict with the Constitution or national legislation. Local government elections were last held on 13 October 2019. The next local government elections are expected to take place in 2024. See “Local Government Elections.”


On 19 December 2011, the Act on Local Governments of Hungary was adopted by Parliament. Under this Act, which took effect on 1 January 2012, the Government is entitled to supervise local governments through the metropolitan and county government agencies in order to control their lawful operation.


The Act introduced certain restrictions relating to debt management of local governments – such as the conclusion of credit or loan agreements and issuance of local government bonds – and required that each such funding transaction be approved by the Government. The annual incurrence of debt by local governments is limited to 50% of the revenues of the local government.


Such rules of local government debt management have been applicable since the planning and implementation of local government budgets for calendar year 2013.
(j) Recent Parliamentary Elections


Hungary held Parliamentary elections in April 2018. Nominees of the following parties gained mandates: the electoral partnership pairing Fidesz-Hungarian Civic Union (“Fidesz”) and the Christian Democrats People’s Party (“CDPP”), Jobbik – Movement for a Better Hungary (“Jobbik”), HSP, Democratic Coalition (“DK”), LMP – Politics Can Be Different (“LMP”) and Együtt (“Együtt”).


In addition to one independent representative, one representative of Country Self-Governance of Germans in Hungary (Landesselbsverwaltung der Ungarndeutschen – “LdU”) gained mandates. Fidesz and CDPP formed an alliance before the elections and submitted a joint list of nominees. The following table sets forth the results of the 2018 Parliamentary elections as published by the Hungarian National Election Office (the “NEO”):
Table 3: Results of 2018 Parliamentary Elections


"":"Total...................................................................................."
"":""
"":"199"
"(%)":"100.00"
__________________ Source: NEO
Fidesz-CDPP obtained a majority of the Parliamentary seats in the 2018 elections. Fidesz-CDPP formed a government with a total of 133 of the 199 Parliamentary seats. Mr. Viktor Orbán was proposed by the President of Hungary and was re-elected by Parliament to serve as the Prime Minister.
Table 4: Composition of Parliament as of 31 December 2020


[Table 4: Composition of Parliament as of 31 December 2020
__________________ Source: Parliament of Hungary]


[Table 5: Composition of Parliament as of 5 October 2021
__________________ Source: Parliament of Hungary]


On 2 October 2016, a national referendum initiated by the Government was held in Hungary on mandatory quotas determined by the migrant resettlement plan of the European Union. The number of valid ballot papers did not reach the validity threshold of the referendum, however 98% of the valid ballot papers contained ‘No’ votes for the mandatory EU migrant quotas.


On 6 September 2017, the European Court of Justice dismissed the actions brought by Slovakia and Hungary against the European Council seeking to avoid accepting refugees under an EU-wide plan to relocate 160,000 refugees from Greece and Italy over two years. Hungary and Slovakia were seeking to have the plan annulled.
(l) COVID-19


In response to the COVID-19 outbreak, the Government, pursuant to the powers vested in it under Article 53 of the New Constitution, introduced a special legal order in Hungary by declaring a state of danger with effect from 11 March 2020, for an indefinite period (i.e. until further notice), appointing the Hungarian Prime Minister as responsible for preventing and mitigating the negative consequences caused by the COVID-19 pandemic. Pursuant to the New Constitution of Hungary, during a state of danger, the Government is entitled to suspend the application of certain laws or derogate from the provisions of certain laws by adopting executive decrees, and may take other extraordinary measures


in accordance with, and subject to the limitations stipulated in, Act CXXVIII of 2011 on Disaster Management. The Government may terminate the state of danger when the circumstances giving rise to its declaration no longer apply.


As part of the Government's efforts to protect the safety and health of people in Hungary, the Government proposed, and on 30 March 2020, Parliament approved a new law (Act XII of 2020 on Protecting against the Coronavirus) (the “Authorization Act”). The Authorization Act became effective on 31 March 2020.


The Authorization Act extends the rights of the Government in order to “guarantee for Hungarian citizens the safety of life and health, personal safety, the safety of assets and legal certainty as well as the stability of the national economy”. The measures taken by the Government must be necessary and proportionate and aimed at preventing, managing, and eliminating the human epidemic or for preventing and mitigating its harmful effects.


The Government must inform Parliament or, in the absence thereof, the speaker and the heads of the parliamentary groupings of the measures taken.


The Authorization Act extends the term of executive decrees adopted by the Government during the state of danger. According to the New Constitution, executive decrees will cease to be effective within 15 days, except where the Government extends their term with the authorization of Parliament. Under the Authorization Act, Parliament has authorized the Government to extend the term of the executive decrees through the duration of the state of danger;


however, such authorization may be withdrawn at any time. Executive decrees adopted during the state of danger become ineffective upon the termination of the state of danger.


The New Constitution guarantees that the democratic functioning of Hungary may not be suspended during a state of danger, the New Constitution may not be suspended or terminated and the special legal order may not affect the operation of the Constitutional Court. However, certain fundamental rights (except for the right to life and human dignity, right to integrity and right to fair trial) may be suspended or restricted.


The Authorization Act introduced some further limitations, suspending any dissolution of municipal councils, and preventing midterm elections, national or local referenda from being held during the state of danger.


On 31 March 2020, the Government issued Government Decree No. 74/2020 on special rules in civil and administrative procedures. Litigation will continue notwithstanding the state of danger and courts will hold hearings by videoconference or other technological means. These rules are applicable to all pending and newly initiated litigation from 31 March 2020 until the end of the state of danger.


On 23 April 2020, the Government announced that the restrictive regulations imposed due to the COVID-19 pandemic would remain in force until 3 May 2020.


On 4 May 2020, the Government announced that new rules would take effect in the country except for in Budapest and Pest County. In Budapest and Pest County, the restrictions on movement imposed due to the COVID-19 pandemic would remain in effect. In other counties, shops, the gardens and terraces of restaurants, outdoor bathing facilities, outdoor museums and zoos are allowed to open without restrictions.


Subsequently, on 18 May 2020, the regulations regarding Budapest and Pest County were amended to be in line with the regulations applicable in the rest of the country.
On 16 June 2020, the Parliament adopted a law providing for the termination of the state of danger (Act LVII. of 2020) declared due to COVID-19 pandemic. On 18 June 2020, pursuant to Act LVII, the state of danger was terminated.


Upon termination of the state of danger as from 18 June 2020, the provisions of certain executive decrees adopted by the Government during the state of danger ceased to be effective pursuant to the Fundamental Laws of Hungary.


Most provisions of those executive decrees, however, were re-adopted by the Parliament and were incorporated into a new law following the termination of the state of danger (Act LVIII of 2020 on the Transition Period and Measures following the Termination of the State of Danger;


“Act on Transition Period”), including (i) reporting (and ministerial acknowledgment) requirements regarding certain foreign investments relating to strategic companies and (ii) the payment moratorium introduced until 31 December 2020 for principal, interest and fees under credit facilities, loans and financial leasing.


With effect from 4 November 2020, as a response to the second wave of COVID-19 pandemic, the Government re-instated the state of danger and introduced further restrictions:  Beginning on 4 November 2020, a curfew was introduced between midnight and 5 a.m., applicable to all except for those commuting to work. Stricter rules for physical distancing


were introduced, including closing of dance and music clubs. Everyone over the age of six was required to wear face masks covering their mouth and nose in public transport and all public places and institutions.  On 10 November 2020, the Government announced an extension of the curfew which was in


force between 8 p.m. and 5 a.m. each day and restricted the opening hours of shops and other businesses. The measures were planned to be imposed for 30 days. All gatherings were prohibited and restaurants were closed except for home deliveries. Shops were required to close at 7 p.m. No more than ten people were allowed to gather at private events or family gatherings, and sporting events were required to be held behind closed doors.


Universities and secondary schools above the eighth grade returned to digital education, while facilities for children under the age of 14 remained open.


Having regard to the second wave of the COVID-19 pandemic and the re-instated state of danger, the Parliament approved a further law (Act CIX of 2020 on the Protection against the Second Wave of the Coronavirus) (the “Second Authorisation Act”), effective between 11 November 2020 and 7 February 2021, extending the terms of the executive decrees adopted by the Government during the reinstated state of danger for a definite period of 90 days.


However, under the Second Authorisation Act, the Parliament also authorised the Government to extend the terms of such executive decrees (which authorization may be withdrawn at any time).


As part of the Government's efforts to protect the safety and health of Hungarian citizens, Parliament approved a new law (Act I of 2021 on Protecting against the Coronavirus Pandemic) (the “Coronavirus Act”). The Coronavirus Act became effective on 22 February 2021. The Coronavirus Act provides for the further extension of the executive decrees adopted by the Government during the state of danger.


As the state of danger is continuing, the Government has the power to introduce new laws and/or amendments by executive decrees. Executive decrees adopted during the state of danger become ineffective upon the termination of the state of danger. Pursuant to the Coronavirus Act, it is anticipated that the state of danger will last until October 2021. However, having regard to the spread of coronavirus variants further restrictions may be reinstated in Hungary.


On 26 December 2020 COVID-19 vaccination started in Hungary with the vaccination of health care workers.
As of 7 April 2021 gradual lifting of the protective measures started as the number of vaccinated people reached 2.5 million (reopening of shops and services).
Further restrictions were lifted on 24 April 2021 as the number of vaccinated people reached 3.5 million (terraces of bars and restaurants may open until 9.30 p.m. and the curfew will start at 11 p.m).


More restrictions were lifted on 1 May 2021 as the number of vaccinated people reached 4 million.
1. immunity certificate holders were able to visit theaters, cinemas, gyms, swimming pools, zoos, museums, libraries and sports events
2. hotels and the indoor premises of restaurants could welcome guests who have been vaccinated or recovered from COVID-19
3. obligatory, universal mask-wearing remained in place and there had to be only one customer per 10 m 2 in shops


4. terraces of bars and restaurants could be open until 9.30 p.m. and the curfew started at 11 p.m.
5. shops could reopen between 5:00 a.m. and 9:30 p.m.
6. hairdressers and cosmeticians could reopen
7. public areas and parks reopened
On 23 May 2021 the majority of the restrictions were lifted as the number of vaccinated people reached 5 million.
1. the curfew and obligatory mask-wearing outdoors was abolished
2. restrictions on the business hours of shops and restaurants were lifted


3. outdoor individual and team sports were allowed
4. family events and weddings may be organized for up to 50 and 200 people, respectively
(family events, if held in a hotel or restaurant, must be in a separate area)
5. indoor and music/dance events may only be attended with a certificate of immunity
6. outdoor events may be organized for up to 500 people
7. vaccinated citizens between age 16 and 18 years can visit indoor venues without an
accompanying adult


On 24 June 2021 border control for towards countries that are members of the Schengen system was lifted. Persons can enter Hungary without restrictions at the land and water border crossing points of six neighboring countries, including Austria, Slovakia, Romania, Serbia, Croatia, and Slovenia.


On 3 July 2021 the number of vaccinated people reached 5.5 million and the government eased certain protective measures. As the number of vaccinations reached 5.5 million, masks are no longer required indoors and people are allowed to go to hotels, restaurants, baths and water parks without an immunity certificate. However, masks will remain mandatory in the healthcare sector.


The use of immunity certificates will be maintained for large events, such as sports events, concerts, festivals and night clubs.


As of 7 September 2021, 58.8% of total population of Hungary received at least one vaccine dose as compared to 65.0% for EU member states. For Hungarians at least 18 years old, 67.9% received at least one vaccine dose, as compared to 76.8% for EU member states. 56.1% of the total population of Hungary was fully vaccinated, as compared to 57.9% for EU member states. For Hungarians at least 18 years old, 65.2% received full vaccination, as compared to 69.4% for EU member states.


For the year ended 2020, the Government implemented multiple measures aimed at alleviating the economic impact of the COVID-19 pandemic which totaled approximately HUF13,970 billion or 29.3% of GDP. The measures were divided in three main action areas including 1) Pandemic Measures (HUF1,027 billion or 2.2% of GDP); 2) Economic policy measures which included discretionary tax and social measures as well as increased expenditures (HUF4,740 billion or 9.


9%) and 3) Financing measures (HUF8,203 billion or 17.2%).
In the second quarter of 2021, the Government invested approximately HUF2,760 billion in the economy, which represents an investment increase of 10.8% year-on-year. The ongoing momentum in investments is reflected in a 3.6% increase in the first quarter of 2021 compared to the second quarter of 2021. The pick-up in investment performance was mainly driven by the machinery investments of companies in manufacturing and services.


Manufacturing investments which accounts for more than one fourth of all investments, increased by 10.7%.
(m) Local Government Elections
In localities with more than 10,000 inhabitants and in each district of Budapest, local representatives obtain seats in a mixed election system: in an individual constituency and from a compensatory list. Each voter may vote for only one individual constituency candidate. Each compensatory list is allocated a seat in proportion to the fragmentary votes received.


The most recent local government election was held in October 2019. The Budapest Assembly, formed in October 2019, included the Lord Mayor, 23 district mayors and nine members elected from the Budapest compensatory list. Mr. Gergely Karácsony, who was supported by DK, HSP, LMP, Momentum and Párbeszéd, became Lord Mayor of Budapest upon receiving a plurality of the votes (50.9% of all votes). Of the 23 seats for district mayors of Budapest, Fidesz-CDPP candidates won seven positions;