Hungarian parliament passes security law on foreign investments

Lawmakers on Tuesday passed a law on the control of foreign investments presenting a danger to Hungary’s security interests.

The law requires individuals and legal entities from outside the European Union, the European Economic Area and Switzerland to seek ministerial approval if they are to carry out investments and become major shareholders in certain companies registered in Hungary.

It covers the areas of national security, public security and those affecting economic and public health interests.

Permission will be needed for the production of arms and certain military technology, equipment used by the intelligence services, the operation of certain financial services and payment systems, and activities covered by the laws relevant to energy, utilities and electronic communications.

The minister will have 60 days to examine whether any such acquisition harms the security interests of Hungary.

A fine of up to 10 million forints (EUR 31,000) may be imposed on any entity that fails to provide all the information requested, and in some cases the Hungarian state can exercise pre-emption rights.

Originally the law was set to come into force on Oct. 1 but parliament’s legislative committee postponed the date to January 1, 2019 to allow for “appropriate preparation”.

The motion was passed with 113 votes in favour, 50 against and 3 abstentions.

Source: MTI