AGREEMENT in the form of an exchange of letters replacing the exchange of letters between the European Economic Community ('the Community`) and Hungary on land transport infrastructure signed in Brussels on 16 December 1991

A. Letter from the Community

Sir,

Upon the occassion of the signature on 16 December 1991 of the Interim Agreement on trade and trade related matters between the European Economic Community and the European Coal and Steel Community, of the one part, and Hungary, of the other part, an Agreement in the form of an Exchange of Letters between the European Economic Community ('the Community`) and Hungary concerning land transport infrastructure was signed. The Interim Agreement came into force on 1 March 1992.

Since the signature of the Exchange of Letters, Hungary adopted Law No LXXXII of 1991 on vehicle taxes. The parties consider it necessary to come to an agreement through the present Exchange of Letters to amend the relevant provisions of the Exchange of Letters signed on 16 December 1991 to take account thereof.

Accordingly, I propose that the text of the Exchange of Letters signed on 16 December 1991 be replaced by the following text:

'I have the honour of confirming to you herewith that the Community has full understanding of the infrastructural and environmental problems Hungary is facing in the area of transport and shall, within the framework of the financial mechanisms provided for, provide, as appropriate, financing for the improvement of land transport infrastructure, including roads, railways, inland waterways and combined transport.

In this context, I take note of Hungary`s explanation of the urgent need for financial assistance to enable Hungarian infrastructure to cope with the increased transit traffic in Hungary and of the wish expressed by Hungary to consider projects related to transit traffic through Hungary, such as the modernization and construction of railway lines and motorways between Hegyeshalom and Budapest, and those between Budapest and Kelebia as priority, since these represent major corridors for Community transit.

The Commission agrees to start to examine with Hungary possible ways to contribute to the improvement of such infrastructure in Hungary, paying special attention to environmental aspects, inter alia combined transport, transit motorways, waterways transport, without prejudice to appraisal of projects according to existing procedures.'

If the foregoing is acceptable to Hungary, I have the honour to propose that this letter, together with Your Excellency's reply to that effect, shall constitute the replacement of the Exchange of Letters signed on 16 December 1991.

This Agreement is hereby approved by the parties in accordance with their respective procedures.

This Agreement shall enter into force on the first day following that on which the parties notify each other that the procedures mentioned in the preceding subparagraph have been completed. It shall apply as from 1 March 1992.

I should be obliged if you would confirm the agreement of the Government of Hungary to the contents of this letter.

Please accept, Sir, the assurance of my highest consideration.

For the Council of the European Communities

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B. Letter from Hungary

Sir,

I have the honour to acknowledge receipt of your letter of today's date which reads as follows:

'Upon the occasion of the signature on 16 December 1991 of the Interim Agreement on trade and trade related matters between the European Economic Community and the European Coal and Steel Community, of the one part, and Hungary, of the other part, an Agreement in the form of an Exchange of Letters between the European Economic Community ("the Community") and Hungary concerning land transport infrastructure was signed. The Interim Agreement came into force on 1 March 1992.

Since the signature of the Exchange of Letters, Hungary adopted Law No LXXXII of 1991 on vehicle taxes. The parties consider it necessary to come to an agreement through the present Exchange of Letters to amend the relevant provisions of the Exchange of Letters signed on 16 December 1991 be replaced by the following text:

"I have the honour of confirming to you herewith that the Community has full understanding of the infrastructural and environmental problems Hungary is facing in the area of transport and shall, within the framework of the financial mechanisms provided for, provide, as appropriate, financing for the improvement of land transport infrastructure, including roads, railways, inland waterways and combined transport.

In this context, I take note of Hungary`s explanation of the urgent need for financial assistance to enable Hungarian infrastructure to cope with the increased transit traffic in Hungary and of the wish expressed by Hungary to consider projects related to transit traffic through Hungary, such as the modernization and construction of railway lines and motorways between Hegyeshalom and Budapest, and those between Budapest and Kelebia as priority, since these represent major corridors for Community transit.

The Commission agrees to start to examine with Hungary possible ways to contribute to the improvement of such infrastructure in Hungary, paying special attention to environmental aspects, inter alia combined transport, transit motorways, waterways transport, without prejudice to appraisal of projects according to existing procedures."

If the foregoing is acceptable to Hungary, I have the honour to propose that this letter, together with Your Excellency's reply to that effect, shall constitute the replacement of the Exchange of Letters signed on 16 December 1991.

This Agreement is hereby approved by the parties in accordance with their respective procedures.

This Agreement shall enter into force on the first day following that on which the parties notify each other that the procedures mentioned in the preceding subparagraph have been completed. It shall apply as from 1 March 1992.

I should be obliged if you would confirm the agreement of the Government of Hungary to the contents of this letter.'

I have the honour to confirm that Hungary is in agreement with the contents of this letter.

Please accept, Sir, the assurance of my highest consideration.

For the Republic of Hungary

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