Hungarian restrictions on cereals exports
The Hungarian Government decided to introduce measures restricting cereal exports. The restrictions were necessary due to the exceptional situation and price increases in the food industry caused by the events in Ukraine. Today’s newsletter summarizes these measures, published by Government Decree 83/2022 (III.5).
Scope of restrictions
In the case of exports of raw materials or products of strategic importance for the country’s animal feed and human food security from the Hungarian territory to abroad, the Hungarian State shall have:
- pre-emption right (in the event of cereals sale), or
- purchase right (in the event of cereals export not affecting its ownership).
In this context, the seller or the owner of the cereals is obliged to notify the intended export of the specified products.
Exceptions are made for exports in the framework of humanitarian aid initiated by the Minister of Agriculture, as well as the transit of cereals through the territory of Hungary.
Scope of the products
The obligation to notify applies to products covered by the following customs tariff headings, provided that these products are intended to be sold or exported during the period up to and including 14 May 2022:
Time scope of the restrictions
The Government Decree entered into force on 6 March 2022 and will expire on 15 May 2022.
The obligation to notify
Exports should be notified in advance to the National Food Chain Safety Office. The Hungarian State may exercise its right of pre-emption or purchase until the end of the 30th day following the notification. Export of the cereals abroad may only commence if within 30 days the State has not made any declaration or has made the declaration that it does not intend to exercise the right of the pre-emption or purchase.
The notification should be made in the Hungarian language by a natural or legal person, sole entrepreneur or other organisation who is the seller or owner of the cereals to be exported, using the form published on the website of the National Food Chain Safety Office (with the attachment of any invoices, contracts and other relevant documents).
Following the notification
If the State exercises its right of pre-emption or purchase, the National Food Chain Safety Office will immediately give notice to the seller or owner that the State wishes to exercise its right of pre-emption or purchase in respect of the cereals specified in the notification. When exercising the pre-emption or purchase, the State will pay the amount corresponding to the current market value determined by the Minister of Agriculture to the bank account of the seller or owner by way of the Hungarian National Asset Management Plc.(Ltd.) within 8 working days of giving notice.
Sanctions
Compliance with the regulations is monitored by the Hungarian Police and the Hungarian Tax Authority. If the seller or the owner has not complied with the obligation of notification under this regulation, the Hungarian Police or the Hungarian Tax Authority will impose on the declarant an administrative fine of up to 40 per cent of the value (excl. VAT) of the undeclared cereals.
8 March, 2022.
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Should you have any questions regarding this newsletter, the tax experts of VGD Hungary will be pleased to assist you.
This newsletter provides general information and does not constitute tax advice
