Budapest Business Journal 3011

VOL. 30. NUMBER 11

JUNE 3 – JUNE 16, 2022

HUNGARY’S PRACTICAL BUSINESS BI-WEEKLY SINCE 1992 | WWW.BBJ.HU

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SPECIAL REPORT INSIDE THIS ISSUE

Legal Services SPECIAL REPORT

New Gov’t, New Laws, Fee Fears and Fresh Trends Some of the leading legal brains in Budapest talk to us about the challenges and opportunites facing attorneys in Hungary in a competitive and challenging economic environment.  11 BUSINESS

Digital Turnaround Needed in SME Sector Most SMEs, including nearly twothirds of mid-sized companies, say they need to take more decisive digitalization steps to remain competitive. That’s according to the Hungarian ICT Report commissioned by Microsoft and carried out by BellResearch.  7 SOCIALITE

Furmint Facts and Thrills

‘Stopping not an Option’

NEWS

As double-digit inflation looms, Barnabás Virág, deputy governor of the MNB, tells a press converence after the latest rate setters’ meeting that the MNB is following its own path, and warns it will take a “longer time” to beat inflation.3

EA

RS

Robert Smyth casts his eye, and palate, over some remarkably good wines.  35

35 Y

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Budapest Business Journal | June 3 – June 16, 2022

IMPRESSUM

THE EDITOR SAYS

DON’T BE A DORY, DON’T FORGET TO CHECK

EDITOR-IN-CHIEF: Robin Marshall EDITORIAL CONTRIBUTORS: Balázs Barabás, Zsófia

Czifra, Kester Eddy, Bence Gaál, David Holzer, Christian Keszthelyi, Gary J. Morrell, Nicholas Pongratz, Gergely Sebestyén, Robert Smyth.

LISTS: BBJ Research (research@bbj.hu)

Whether it is the European Union’s compromise deal over oil imports for its sixth sanction package directed at Russia following its invasion of Ukraine (page four), a survey into the digital readiness of Hungarian SMEs (page seven), or the issue of gender diversity on boards of directors (page 10), there is a lot of “meat” on the “bones” of this issue. And that is before you even get to our Special Report dedicated to the local legal market.

I generally find that what sticks with me from one edition to another can seemingly be generated quite randomly. Sometimes it is the “big issues,” sometimes the “big interviews.” There is no surprise about the latter, in particular. I got into journalism more than three decades ago because I was curious (I still rate that as the single most important trait a journalist can have) about the world in general, and people in particular. What makes them tick, what makes them successful, and what did they get wrong and learn most from?

For all that, sometimes a story simply resonates with you. This week, my favorite news item is a brief report that Hungary, which famously won’t send weapons to Ukraine, did dispatch 500 liters of communion wine. In a sense, it is a typically Hungarian story: the various governments of Viktor Orbán have worked hard to carve out a niche as defenders of the Christian faith.

The article from this issue that I keep coming back to is our piece about sanctions compliance on pages 16 and 17. There are several reasons for this, and perhaps none are obvious. It is a story related to the war in Ukraine, but it has none of the human drama of the frontline reporting, or that great six-million strong sea of displaced people, or the more than

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620,000 refugees the United Nations estimates have lapped up on Hungary’s borders (according to recent official Hungarian data, only around 20,000 have applied for “temporary protection” to stay here).

What it does demonstrate are the destabilizing ripple effects the war (now mainly in the east of Ukraine and so some distance from Hungary) can have on business.

Life is complicated enough without having to try and establish who the ultimate owner of a company you do business with is so you can make sure you are not inadvertently sanction-busting. You would expect to go through a due diligence process if you were buying a company, but not necessarily to vet a business partner.

And yet, that is precisely what is expected.

And not only that but, as one of our early placeholder headlines for the article put it, you have to “Keep on Checking” (a phrase I can only hear in the voice of Dory, the forgetful fish from “Finding Nemo,” but perhaps that’s just me). To be more precise, here’s the quote that sums it up. I like this because, although it comes from a lawyer, it is unusually pithy and to the point.

“To wrap up, not just the business partner but also the goods and services must equally be checked.

Furthermore, before you effectuate any transactions with possibly affected business partners, make sure you conduct a thorough internal verification process. Do not skip this, not even a single time. Everything must always be checked and, most importantly, constantly monitored after the fact. Never take shortcuts and keep checking.”

Robin Marshall Editor-in-chief

Why Support the BBJ? • Independence. The BBJ’s journalism is dedicated to reporting fact, not politics, and isn’t reliant on advertising from the government of the day, whoever that might be.

• Crisis Management. We have all lived through a once-in-a-century pandemic. But we also face an existential threat through climate change and operate in a period where disruptive technologies offer threats and opportunities.

Now, more than ever, factual business reporting is vital to good decision-making.

For more information visit budapestbusinessjournal.com

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• Value Creation. We have a nearly 30-year history of supporting the development of diversity and sustainability in Hungary’s economy. The fact that we have been a trusted business voice for so long, indeed we were the first English-language publication when we launched back on November 9, 1992, itself has value.

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• Community Building. Whether it is the Budapest Business Journal itself, the Expat CEO award, the Expat CEO gala, the Top Expat CEOs in Hungary publication, or the new Expat CEO Boardroom meeting, we are serious about doing our part to bind this community together.

THEN & NOW

Players of FTC Telekom women’s team celebrate winning the Women’s League NB I national soccer championship after beating ETO FC Győr at the ETO Park Stadium in Győr 3-1 in the second leg of the final on Tuesday, May 31. FTC stands for Ferencvárosi Torna Club, literally the Ferencváros Gymnastics Club. According to the club website, fradi.hu, it has been a successful period for the women’s team, who were defending the NB I championship. They also won the National Women’s Hungarian Cup earlier in May, extending their own record in the event to six consecutive wins. While it may have a far higher profile today, women’s soccer has been around in Hungary for longer than you might have thought. In the black and white photo from the Fortepan public archive, players rest during a Monor-Maglód match celebrating the 70th anniversary of Monori SE in 1971.

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Budapest Business Journal | June 3 – June 16, 2022

News macroscope •

Two-digit Inflation Awaits on the Horizon

Although the latest ratesetting decision of the Monetary Council of the National Bank of Hungary (MNB) didn’t surprise the markets, the Hungarian currency nearly hit an all-time low against the euro on Wednesday morning. Analysts say the price caps in play curb price rises, but inflation is still expected to go above 10% in the coming months.

ZSÓFIA CZIFRA

The Monetary Council of the MNB raised the central bank base rate to 5.9% at its meeting on Tuesday (May 31) and also increased the bookends of the interest rate corridor by the same amount.

Magyar Bankholding’s head analyst András Horvát expects the base rate to rise to a 7.5% peak by the middle of the year, gradually catching up with the one-week deposit rate, which could close at the end of the summer.

The analyst does not expect the one-week deposit and base rates to be reduced before the second half

of

2023.

By the end of next year, the one-week deposit and base rates are expected to fall to 6.25%. However, the condition for the decline is that inflation can be expected to return to the MNB’s 2-4% tolerance band after 2023, he said.

Changes in the MNB Base Rate in Hungary (March 23, 2004-May 31, 2020)

National Bank of Hungary base rate

The analyst noted that current global inflation is mainly driven by a sharp rise in the cost of living, which will dampen economies through a decline in purchasing power. He underlined that it is essential for central banks to avoid overtightening monetary conditions so that interest rates are less of a brake on growth in a slowing economic environment.

Péter Kiss, investment director of Amundi Fund Management, said that the MNB had returned to its previous, more cautious rate hike range on Tuesday, which could delay the “closing” of the critical one-week deposit rate and the base rate, lengthening the rate hike cycle. This may be necessary due to longer-than-expected inflation and the weakening trend of the forint, he added.

Guiding Factor

The “double communication,” which is difficult for foreigners to interpret, may persist. However, while the central bank communicates almost exclusively about the base rate, he underlined that the oneweek deposit rate is the guiding factor for the domestic economy. The analyst thinks that, given the current schedule, the two interest rates could meet in August and could then remain unchanged for quite some time, until the end of 2023.

Zoltán Varga, the senior analyst at Equilor Befektetési Zrt, expects inflation to exceed 10% in the coming months and for average inflation to be 9% for the whole year. The price caps the government has introduced on some food stables and gasoline and diesel, to run alongside the longstanding utility caps, have significantly curbed price increases, he thinks.

In terms of inflation processes, what is particularly important is how long and in what form the so-called “price stops” remain, he said. According to the analyst, the two interest rates may peak at 7.9% at the end of September if the base rate continues to rise by 50 basis points per month and

Source:

the one-week deposit rate continues to increase by 30 basis points per month.

János Nagy, Erste Bank’s macroeconomic analyst, said that the tightening cycle could continue into the second half of the year after the rates meet again, and he expects the key interest rate, which mainly affects shortterm interest rates, to peak at

around

8%

by the end of the year.

However, the vulnerability of the Hungarian currency, the uncertain outcome of the war, and the rule of law arguments with the European Commission continue to pose additional risks in the short term, and their unfavorable developments could overwrite current scenarios, he added.

Gábor Regős, head analyst at research company Századvég drew attention to the fact that the rate of increase in the oneweek deposit rate will remain the same based on the MNB’s communication, meaning the pace of tightening is not slowing down, he argued. Raising interest rates alone will not stop inflation, but failing to do so would lead to further weakening of the forint and even higher inflation, he pointed out.

Optimal Interest

He remarked that the optimal interest rate level appeared as a new element in the central bank’s communication.

According to the analyst, this term sheds light on the dilemma: although higher interest rates are needed to break down inflation, the rates should not be too high because of real economic costs.

The central bank will continue to raise the one-week deposit rate at the previous pace, said Barnabás Virág, deputy governor of the MNB, in an online press conference following the interest rate decision. The two interest rates could meet in the second half

of the year, he added, noting that the oneweek deposit rate could reach more than

7% in

July. He confirmed that the cycle of interest rate hikes, the monetary tightening, will continue until conditions ensure that the central bank’s inflation target is met. The tightening will remain in the second half of the year for sure, he added.

“Stopping is not an option,” the deputy governor said in response to signs of easing at several regional central banks. The MNB is following its own path, and it would take a “longer time” to beat inflation, he added.

Virág emphasized that maintaining the flexibility of monetary policy is also crucial for the central bank to be able to react to the processes. If the situation arises, the central bank is ready to use “any means” to ensure the stability of the financial system and its primary goal is to achieve the inflation target in a sustainable manner, he said.

According to the central bank, inflation appears to be rising in the short term.

An increase in prices above 10.5% by the end of May is possible; the figures will come out next week. MNB reckons food prices are 50% responsible for inflation.

Increases in the price of raw materials and the external cost effects are being quickly incorporated into prices.

Numbers to Watch in the Coming Weeks The Central Statistical Office (KSH) publishes April’s retail trade data today (June 3). Next week, on June 8, the May inflation figure will come out, followed by data on commercial accommodation establishments in April. The detailed data on April industrial production will be released on June 14.

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Wine, not Weapons, as Hungary Gets to Keep its Pipeline Oil In the early hours of May 31, after the first day of an EU summit in Brussels, Prime Minister Viktor Orbán said in a post on Facebook that European Union leaders had agreed to allow deliveries of Russian oil via pipeline with unchanged conditions.

NICHOLAS PONGRATZ

“We brokered an agreement that states that those countries that get oil delivered via pipeline may continue managing it under the old conditions,” Orbán said. European Council President Charles Michel confirmed the deal when announcing that EU leaders had agreed on a sixth package of sanctions against Russia.

“Concretely, it will allow a ban on oil imports from Russia with a temporary exception for imports delivered by pipeline,” he said.

Earlier at the summit, Orbán had said that applying an embargo on Russian

Ukraine

Crisis

Polish nationality spokesperson Maria Rónayné Ewa Slaba speaks at a ceremony before the departure of a Hungarian consignment of eucharistic wine for Ukrainian Christian communities in front of the Polish Parish Church of the Virgin Mary of All Help in Budapest on May 30, 2022. Donated by the Archdioceses of Eger and Veszprém and the Archabbey of Pannonhalma, the nearly 500 liters of liturgical-quality wine were collected by the Hungarian Catholic Charity. It will be transported by the Ministry of Foreign Affairs and Trade to Poland, from where the Polish Charity will deliver it to Ukraine. Photo by Tamás Kovács / MTI oil exclusively delivered by sea, not pipeline, would be a “good solution” for Hungary. However, he stated that if pipeline supply were to be interrupted, Hungary would need access through other means.

“The pipeline solution is not bad [.…] it’s a good approach, but we need a guarantee that in the case of an accident with the pipeline [running] through Ukraine [….] we have to have the right to get Russian oil from other sources,” he said.

According to the Association of Hungarian Logistics Service Centers (MLSZKSZ), Hungary could take over the transshipment of as much as five million tonnes of Ukrainian grain by rail were the immediate infrastructure investments to be made. The association estimates that Ukraine’s grain exports could reach 20 million tonnes a year, all of which must be

delivered by rail since the country’s port access has been inhibited by a Russian blockade.

Logistical Upgrade

Upgrading cross-border railway and transshipment infrastructure in Hungary through central budget and EU resources to create a corridor for Ukraine’s grain exports, as well as for humanitarian aid and farm inputs bound for Ukraine, could generate “many billions of forints” for the local logistics industry as well as for the central budget, MLSZKSZ said.

Regarding “exports” from Hungary to Ukraine, State Secretary for Church and Ethnic Relations Miklós Soltész of the Prime Minister’s Office dispatched the latest aid consignment from the government, which consisted of 500 liters of communion wine.

According to telex.hu, the high-quality

Roundup

wine, intended for liturgical purposes, was donated by the Archdioceses of Eger (130 km northeast of Budapest) and Veszprém (115 km southwest), as well as the Pannonhalma Archabbey (115 km west).

Collected by the Hungarian Catholic Charity, it will be transported by the Ministry of Foreign Affairs and Trade to Poland, where it will be forwarded to Ukrainian churches. The state secretary admitted that “we are in dispute with our Polish friends” because “we are still not willing” to send either arms or soldiers to Ukraine, but “we are ready to cooperate in any way” to help families who have fled to Hungary or people who have remained in Transcarpathia or the interior of Ukraine.

“We brokered an agreement that states that those countries that get oil delivered via pipeline may continue managing it under the old conditions.”

Meanwhile, on May 24, MPs approved an amendment to Hungary’s constitution expanding the government’s mandate to declare a state of emergency to include cases of war or humanitarian catastrophes in neighboring countries, a power it promptly exercised.

“The government, acting on its right enshrined in the constitution, is declaring a state of emergency due to the war from midnight,” Orbán said in a video message posted on Facebook.

“Similarly to the state of emergency introduced during the period of pandemic defense, it will allow the government to react immediately and use all available tools to defend Hungary and Hungarian families.”

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News | 5

New Definition of ESG Adapted to Hungarian Conditions There has been no centralized guideline for ESG criteria that everybody accepts and can adopt. Therefore, a clear definition and framework are necessary, it was argued at the Green Future Conference 20022, organized by the Hungarian Green Building Council (HuGBC).

GARY J. MORRELL

“This is not like LEED or BREEAM, which are already set frameworks.

Everybody knows that the value of the stamp from LEED and BREEAM is the same in London or Budapest,” explains Zsombor Barta, president of the HuGBC. “Because there was no centralized framework for the meaning of ESG and sustainable economic activities, the EU has attempted to define the meaning of sustainable economic activity with EU Taxonomy regulations and a specialized framework for each economic sector. Essentially, how to measure sustainability,” he says.

“Indeed, this is different from classical ESG benchmarking or ratings because the EU has ambitious

targets related to climate change, CO2 emissions and the Paris Agreement.

The EU considered that if it is putting a framework for sustainable economic activity together, then, of course, it should also serve at the same time the ambitious targets related to climate change and CO2 emissions. This was how EU Taxonomy was born in May 2021,” the president argues.

“The National Bank of Hungary asked us to cooperate with them to elaborate the adaptation of the EU Taxonomy regulation with regard to new buildings, renovations, and existing buildings in Hungary. The result is that this collaboration adapted EU Taxonomy to the Hungarian market; EU Taxonomy requirements are hard to fulfill as they are very ambitious frameworks and targets,” Barta adds.

Skanska Recognized as European Climate Leader

Regional developer Skanska Hungary is on the way to becoming has gained international a bicycle manufacturing center, recognition by being included says the Hungarian Investment in the “Europe Climate Leaders Promotion Agency. According to 2022” list published by the Eurostat, Hungary ranks 13th in Financial Times newspaper and Europe according to the number of data insight firm Statista. bicycles manufactured, a situation “At Skanska, we have a long-term that will improve as domestic experience in taking measurable actions for sustainable development,” manufacturers are ramping up says Jacob Møller-Nielsen, executive production and the Taiwanese-based Giant, the largest bike manufacturer vice president of the center of in the world, is scheduled to produce excellence at Skanska commercial one million units annually at its development CEE. production unit in Gyöngyös “ESG aspects are embedded in (80 km northeast of Budapest by the full lifecycle of our projects, road). The good environmental starting from considerations news is that the demand for bikes before purchasing land, through is at an all-time high. the selection of climate-smart building materials and design that includes circular economy rules, to About 43% of Budapest installing environment and userOffices Sustainability friendly fit-outs and ensuring Certified efficient efficiency operations of CBRE Investment Management has the projects. Sustainability is part traced 43% of the quality end of the of Skanska’s strategy: it is one Budapest office market as being of the enablers of greater value sustainability accredited to a thirdcreation,” he adds. party accreditation organization. Of “Skanska’s office buildings are this, 79% are certified to the U.K.designed and built in accordance based BREEAM system and 35% to with ESG principles. The company the U.S.-based LEED. Several office develops office spaces that support complexes are accredited to both. The the health and safety of users recent acquisition of the BREEAM and visitors, applies the highest “Excellent” accredited Szervita Square ethical standards, requires the Building by Union investment from same from its subcontractors and Horizon Development is seen as an suppliers, implements climateillustration of the central importance smart solutions at each stage of the building lifecycle, contributes to the of sustainability accreditation for investors today. development of local communities and supports their needs,” MøllerNielsen concludes.

EU Wants Increased use

Most Investors say ESG Important in Decision-making Nordic Light Trio,

by Skanska, has been awarded WELL accreditation.

WELL Accreditation Increasing As many as 38 office complexes in Hungary are now registered to the WELL Building Standard. This performance-based sustainability accreditation system monitors and certifies elements of the built environment that affect health and wellbeing. From this total, owners of 10 complexes have handed in the documentation to complete the certification process. WELL

accreditation has so far been awarded to two Budapest office projects: Corvin Technology & Innovation Park by Futureal, and Nordic Light Trio, by Skanska. Two or three more complexes are expected to be awarded WELL accreditation in the near future.

The standard of air quality in a given location remains a concern for many projects.

Hungary on way to Becoming Bicycle Manufacturing Heavyweight

More than 79% of investors believe that ESG-related risks are an important factor in investment decision-making, according to Cushman & Wakefield. Its report “Why ESG Matters” finds that climate change and global sustainability challenges are some of the greatest accelerants facing CEE portfolios. The consultancy concluded that companies with well-managed ESG strategies could expect cost reductions, reduced regulatory interventions, and increased employee retention, attraction, and productivity.

An ESG strategy must include evaluating how an organization addresses social impacts. Having strong social capital is critical to driving high yield returns.

of Solar, Wind Energy

The EU is planning to increase the use of solar and wind power in addition to a short-term boost for coal to end reliance on Russian oil and gas as quickly as possible. The EU Commission has stated that the EU needs to find an extra EUR 250 billion over the next five years to finance the phasing out of fossil fuels and speed up the switch to green energy.

KPMG Appoints Sustainability Verifier KPMG Hungary has appointed an “approved verifier” for green securities through the Climate Bonds Initiative. “Investors greatly appreciate those organizations that certify their operations with standards based on transaction criteria,” said Ágnes Rakó, KPMG partner responsible for ESG.

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CEE Investments Return to Pre-pandemic Levels in Q1 At EUR 2.83 billion for the first quarter of the year, Central and Eastern European (Bulgaria, the Czech Republic, Hungary, Poland, Romania and Slovakia) investment volumes have returned to pre-pandemic levels, up by 33% according to Colliers. However, uncertainty around the war in Ukraine and economic headwinds could impact the predicted volumes for 2022 of more than EUR 12 bln.

GARY J. MORRELL

Looking at the performance of individual countries, Hungary is down 46% according to year-on-year volumes, while Poland has increased by 23% and the Czech Republic saw a jump of 205% for the year, with a very good Q1 2022 measured against a poor Q1 2021.

Individual county volumes followed familiar trends for the first quarter with Poland the dominant investment destination

at

EUR 1.66 bln,

followed by the Czech Republic with EUR 907 million. Poland secured 56% of total Q1 volumes. Hungary recorded EUR 124 mln for the quarter.

manager of retail real estate in Poland in terms of gross leasable area) of 49% and 50% of its shares in the EPP and M1 portfolios, respectively, for more than EUR 650 mln.

The Warsaw Hub deal brought the total of U.S. investment capital to more than EUR 1 bln or 38% of CEE market activity in five transactions.

However, money from within the region continued to be very active with EUR 972 mln, representing 34% of investment activity in 30 transactions.

CEE Office Yields Prague

4.00%

Warsaw

4.10%

Budapest

5.00%

Bratislava

5.00%

Bucharest

6.50%

Sofia

7.75% Source: Colliers

“The figure for Hungary is a little behind the 10-year average of EUR 210 mln, but the market sentiment for Hungary remains positive,” said Kevin Turpin, head of CEE research at Colliers.

“Provided we do not receive any further major shocks, we estimate yearend volumes could reach anywhere between EUR 1.5 bln to EUR 2 bln. This would mean they are certainly going back to being similar to Czech volumes,” he noted.

“Poland is also likely to record strong figures although economic headwinds such as high inflation and rising interest rates, may well impact negatively on global GDP performance in the second half of the year,” Turpin added.

Prime Yields Hold

Colliers have recorded few movements in prime yields for most markets in the region, particularly due to a lack of transactional evidence to support further yield shifts.

“Our current outlook also suggests there will be limited, or no further compression in the short term.

Particularly as we expect the cost of debt and other financial instruments to increase, adding pressure on margins. The combined impacts of the pandemic and war in Ukraine are driving inflationary pressures and negative economic sentiment,” Turpin said.

With regard to the various sectors, industrial lost its leading position in the region in the first quarter to office and retail as the lack of available industrial product became more apparent. Office

recorded

40%

of investment volume, followed by retail with 36% and industrial with 12% Notable big-ticket deals in the region were the acquisition of The Warsaw Hub by Google for EUR 585 mln. In another office deal, the CPI Group sold IGY in Ceske Budejovice in the Czech Republic for about EUR 215 mln. Retail volumes in the region rose due to the divestment by EPP (the largest asset

“The figure for Hungary is a little behind the 10-year average of EUR 210 mln, but the market sentiment for Hungary remains positive. Provided we do not receive any further major shocks, we estimate yearend volumes could reach anywhere between EUR 1.5 bln to EUR 2 bln. This would mean they are certainly going back to being similar to Czech volumes.”

“With regard to the impacts of the geopolitical and global health-related crises, the region’s economic outlook is frequently revised. The shortterm outlook in the context of a fiveyear forecast is most likely to worsen before getting any better, depending, of course, on how these crises develop.

On top of the pandemic and ESG drivers and disruptions, the war and related sanctions are impacting property and consumer markets in terms of supply, demand and affordability,” Colliers notes.

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Business

Digital Turnaround Needed in SME Sector

The majority of smalland medium-sized enterprises, including nearly two-thirds of mid-sized companies, say they need to take more decisive digitalization steps to remain competitive.

According to the Hungarian ICT Report, a survey of SMEs commissioned by Microsoft and carried out by BellResearch, the importance of this will increase in the near future for between one-third and a quarter of businesses.

GERGELY HERPAI

Change is also needed because the Hungarian SME sector is lagging behind its regional competitors in digital transformation. The current uncertain economic situation is pushing companies to take further efficiency measures, with several tenders available. Still, to be

Angelika Szalay, sales director for small and medium businesses at Microsoft Hungary. significant role in managing customer eligible for these, companies need to relationships and transforming have a vision and concrete development workplace culture, it has only just begun plans in the digital field. to change strategic planning, products More than half (59%) of Hungarian SMEs do not have a developed IT strategy, and services, operations and logistics.

The vast majority of SMEs in and the vast majority of them are not Hungary (81%) still see ICT as a expected to have one, according to the recent Hungarian ICT Report survey. The service activity, with only one in seven medium-sized enterprises and one Digital Transformation Index (DTI) for the domestic SME sector currently stands in five small enterprises considering at IT a strategic area.

“Although the vast majority of respondents see ICT as a service index points, which is low, despite the function, many, especially in the midprogress made in recent years. While market, are aware that it will play a key digitalization has already played a role in their future competitiveness,” said Áron Jakab, director of partnerships at BellResearch, pointing out the apparent contradiction.

“What we are witnessing today is that technology is fundamentally influencing and shaping workflows, teamwork, innovation, services and products themselves, and is therefore deeply embedded in business processes. This is something that more and more people are recognizing,” he added.

33.1

Accelerating Transformation

Digital transformation has been accelerated in recent years by the pandemic, with many businesses moving to the cloud to keep their operations going during shutdowns. Now, the energy crisis and uncertainties in the economic environment are pushing enterprises to operate more efficiently than ever before. These conditions are driving the need for companies to move to Áron Jakab, director of partnerships at BellResearch (at right). the next stage of digital transformation.

High aid intensity tenders will play an essential role in the digital transformation of the economy. Typically, the grant provider expects the applicant to

spend

20%

of the grant upgrading digital infrastructure. The chances of a successful application are significantly increased if the applicant has concrete plans for the development direction.

Funding is also available to Hungarian businesses to support the digital developments needed for this. However, the Hungarian ICT Report revealed that more than half of Hungarian SMEs do not have a developed IT strategy.

“Putting together a tender is a serious, time-consuming job. Usually, the companies that win grants are those that know exactly what tools and services they want to buy and for what purpose,” Angelika Szalay, sales director for small and medium businesses at Microsoft Hungary, said.

“Microsoft is committed to supporting Hungarian SMEs and is ready to provide them with all the help they need to make their IT investments efficient and successful. In cooperation with tender specialist companies, Microsoft partners can provide professional advice on planning, prequalification for EU funding, and even the preparation of the specific tender documents,” she added.

Reasons to Invest

According to respondents, the main reasons for investing in IT are that it enables businesses to meet customer expectations (41%), respond more flexibly to change (38%) and reduce costs and increase efficiency in the long term (31%).

Another increasingly common reason is to create the conditions for teleworking.

Nearly two-thirds of respondents already do this, although mostly (also twothirds) complement on-site work.

“Hungary has excellent foundations for the digital transformation of the economy: we have a well-developed digital infrastructure by European standards, and a higher proportion of Hungarian businesses employ ICT specialists than the regional average,” Szalay noted.

“Nevertheless, Hungarian businesses are lagging behind their regional competitors in the use of cloud technology and artificial intelligence.

These are essential for innovation and ultimately for maintaining competitiveness,” she warned.

The contribution of the domestic ICT sector to GDP is comparable to that of the much-touted digital frontrunner Estonia, at more

than

5%.

At the same time, however, Hungary lags behind the regional average by 8% in terms of the number of companies using cloud technologies. According to research for Microsoft’s Digital Futures Index, Hungary’s level of investment in ICT, cloud AI, and IoT technologies is still below the regional average.

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Business

www.bbj.hu

Budapest Business Journal | June 3 – June 16, 2022

Diageo Celebrates 20 years in Budapest Diageo, a leading company in the production and distribution of alcoholic beverages, has celebrated its 20th anniversary in Budapest with the opening of its new 11,000 sqm base at Green Court Offices in the Váci Corridor in District XIII. GARY J. MORRELL

The recently completed complex by the Brussels-based developer Codic consists of around 20,000 sqm of office space by the Hungarian firm DPI Design. In addition, the 275 apartment Green Court Residences, designed

by Pesti Házak of Hungary, and Venta Group, of Austria, provides a residential component.

Green Court is located

300 meters

from the Dózsa György metro station in what is defined as the inner area of the Váci Corridor business district, an area popular with SSCs due to its excellent public and road transport links and direct access to amenities.

in air handling units, and the role of the double-skin façade is important for acoustics as well as heating/ cooling and energy conservation.

In addition, there is a 3,300 sqm inner park in the office complex.

Furthermore, the office has window surfaces of 7,000 sqm.

Hybrid Optimization

Considering the altered working environment of the past few years due to COVID, the office is optimized for hybrid working.

The ratio of shared spaces and the number of devices for web conferences have grown, and parents are supported with a family-friendly zone where they can bring their children, according to Diageo.

Diageo describes itself as the global leader in the production and distribution of alcoholic beverages with a broad portfolio of spirits, beer, and wine. It has brands such as Johnnie Walker, Crown Royal, J&B, Buchanan’s and Windsor whiskeys, Smirnoff, Cîroc, and Ketel One vodkas, as well as Captain Morgan, Baileys, Don Julio, Tanqueray, and Guinness.

The company celebrated its anniversary and the opening of the new office with a reception hosted by András Wolf, chief chef at the New York Café and Gundel, with cuisine accompanied by what he described as appropriate Diageo products.

As has been the trend in recent years, Diageo’s office in Budapest has developed from a shared service center with around 50 employees to a more enhanced global role with 1,400 staff.

Main Goals

“The main goals of Diageo Budapest include market growth support, value creation and services, and business performance and efficiency

increase,” explained Michael Holm, managing director for Diageo’s Eastern European business.

“As a result, presently, it is the Budapest office that controls the main financial processes for the European and North American markets and performs the treasury function as well. The company created the Global Business Operation, and the East European region of Diageo was formed with a center partly in Budapest. Additionally, the majority of centralized tax activity has also been taking place in Hungary since 2020,” he said.

“Here at Diageo, we recognize the issues society faces in the 21st century.

As a result, under the Society 2030 program, we aim to help individuals globally to live in a more sustainable, equal, and safe world in the next 10 years,” Holm added.

“Moreover, we want to ensure that our colleagues have the best working environment possible, as, in the past 20 years, the Diageo Budapest team has expanded to 1,400 employees representing 57 different countries. The office provides around 2,000 flexible working points.”

The BREEAM “Excellent” certified Green Court Offices have several notable sustainable features, according to Diageo. Due to the rainwater harvesting system at Green Court Offices,

100% of

the rain can be re-used, which potentially equates to 30,000 bottles of Johnnie Walker per day.

Additionally, selective waste collection is greatly emphasized in the new, environmentally-friendly office.

Quality LED lighting design supports the goal of lowering the carbon emission footprint. LEDs have an expected lifespan of 50,000 hours, while a typical incandescent bulb lasts only about 1,000 hours. Built-in UV filters provide protection from infection

“The Budapest office […] controls the main financial processes for the European and North American markets and performs the treasury function as well.

The company created the Global Business Operation, and the East European region of Diageo was formed with a center partly in Budapest. Additionally, the majority of centralized tax activity has also been taking place in Hungary since 2020.”

“Besides sustainability, providing the ideal working environment is also extremely important for us.

We believe in our responsibility to support the mental and physical health of our employees. Adjusting to the altered working habits due to the pandemic, we wanted to provide a new, modern office for our employees which they would gladly visit alongside the opportunity to work from home,” said Mónika Pais, CEO of Diageo Budapest.

The complex also provides a sky bar with a capacity of

300 people.

The interior has been designed by the Perkins & Will of the United Kingdom and Hungary’s Viador Atrium.

Pais explained that, as well as providing a treasury function, the office supports supply finance, data and technology, global HR, commercial and sales, financial planning and Eastern European hub roles.

“The main goals of Diageo Budapest include market growth support, value creation and services and business performance and efficiency increase,” she said.

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Budapest Business Journal | June 3 – June 16, 2022

Pannonia Bio Says it Continues to Invest in Biorefinery Future Despite a challenging year, the owner of Europe’s largest biorefinery says it is continuing transformative investments into food chain resilience and energy security.

Given the economic impact of COVID and now war, and the environmental imperative to find alternatives to fossil fuels, that seems timely, to say the least.

GERGELY HERPAI

The operating profits of advanced biorefinery company Pannonia Bio Zrt., based in Dunaföldvár (100 km south of Budapest by road), fell

by

30%

in 2021 compared to 2020. The company did manage to maintain healthy income levels through its financial operations during what it described as a rather trying year.

Ferenc Hódos, the company’s strategic director, drew attention to the company’s 2020-2022 EUR 200 million investment program.

“Recent events only reinforce the extent to which our investments are necessities for a European community that needs both food chain resilience and energy security that also benefits the planet,” he told reporters.

“While our investments have been deeply adversely impacted by the unprecedented supply chain failures and price spikes of the last year, all of our planned investments will be completed and commissioned by the end of this year,” Hódos insisted.

“Pannonia Bio has always been a constructive partner for Hungarian

Business | 9

fuel-based products and thus efficiently helps lower Hungary’s dependency on imported fossil fuels.

In 2020, the Dunaföldvár biorefinery of Pannonia Bio Zrt. produced, on an annualized basis, more than 350,000 tonnes of GMO-free high-protein animal feed, more than 10,000 tonnes of corn oil, more than 10,000 tonnes of organic fertilizer, more than 500 million liters of bioethanol, and more than 200,000 MWh of advanced biomethane from more than one million tonnes of locally produced maize, according to its own figures. It exports to more than 35 countries.

In October of last year, a new plant, which mainly produces bioethanol, was inaugurated at the Dunaföldvár site, creating

15,000 tonnes

of soil improver with a high organic matter content per year. According to the company, this new facility has started to produce fermented soil improvers from maize straw, creating a new market for the company.

As of this year, Pannonia Bio will become a key source of alternative vegetable proteins, organic fertilizer and advanced biomethane.

Ferenc Hódos, Pannonia Bio Zrt.’s strategic director.

Pannonia Bio’s principal subsidiaries also experienced success last year.

Pannonia Solar Zrt. owns 43 operating solar projects and saw the final “Our strong cash flow has been agriculture, a significant source for important since we also paid out EUR 84 completion and commissioning of its Europe of GMO-free protein meals portfolio. Across the border to Hungary’s mln in capital expenditures for animal feed, a large producer of and southwest, Pannonia Bio Gas d.o.o. is now large scale GHG savings bioethanol, the largest biogas producer in Slovenia. and the source of thousands of ‘just transition’ jobs in the Hungarian in R&D expenses in 2021, and we countryside,” he added. anticipate similarly high levels of Challenging Headwinds investment in 2022,” he promised.

Finance director Lajos Dobai Pannonia Bio says it runs the commented on the company’s financial largest single-site grain biorefinery in results last year: “As a result of Europe at Dunaföldvár. The company the challenging headwinds across continues to invest in research and Pannonia’s markets in 2021, our development, venturing into new areas core operating profit fell by and product lines such as high-quality approximately 30%, a result that protein products as food ingredients we believe is typical in our industry for both human consumption and given our exposure to volatile natural animal feed. commodity markets,” he said.

The company, which started production in Dunaföldvár in 2012, produces 500 million liters of bioethanol a year from more than one million “Recent events only tonnes of maize. It also turns out animal feed, corn oil, and soil improver. reinforce the extent to The feedstock processed is which our investments sustainably grown corn and barley almost exclusively sourced from are necessities for Pannonia Bio finance Hungarian farmers. Pannonia Bio a European community director Lajos Dobai. claims it is a proving ground for the world’s most advanced innovations that needs both food in grain processing. According to chain resilience and “We are optimistic about Pannonia’s the company, the next stage in the energy security that also breakthroughs in alternative proteins development will be a world-first and seeing these come to market over barley processing plant. benefits the planet.” the course of 2022, and we are confident Fewer Greenhouse Gases that 2022, despite all of its challenges, Pannonia Bio produces high-value will be a strong year,” said CEO Pavel GMO-free proteins (for animal and, “However, management put in Kudriavtcev. increasingly, human nutrition), organic place a well-considered series of Interestingly, Kudriavtcev joined fertilizer, advanced biomethane, financial hedges, in addition to Pannonia Bio from Dreher Breweries and bioethanol/alcohol, used in our well-timed energy efficiency in Hungary. Prior to this, he worked an increasing range of industrial upgrades, and Pannonia’s 2021 in breweries owned by SABMiller in applications, from hand sanitizers to the income exceeded that of 2020. As Russia and is also a qualified brewer. food industry, as well as a sustainable a result, we generated EUR 104 mln According to Pannonia Bio’s website, biofuel. The latter product emits in after-tax profit, about 10% more he has extensive manufacturing and 80% fewer greenhouse gases than fossil than last year,” Dobai said. supply chain expertise.

EUR 4 mln

10 | 2

Business

www.bbj.hu

Budapest Business Journal | June 3 – June 16, 2022

Board Diversity, Inclusion Boosts Business Resilience Diversity on boards of directors and decision-making bodies to steer businesses is essential to ensure that companies are resilient, even among the most challenging business and economic circumstances.

That was the conclusion of participants of a roundtable discussion, “The Impact of Diversity in Boards and Decision-making Bodies,” part of the EU Diversity Month.

CHRISTIAN KESZTHELYI

the calls are up-to-date on the most recent trends and tendencies.

“Since the mid-2010s, we have reached

50% equality

on the board, which is an important milestone,” Shell’s Istenes noted.

Reaching such a threshold requires thorough work and outstanding commitment from a company. However, she adds: “I also believe in meritbased decisions, but we do not want to close recruitment while there is no diversity in the shortlist, both in gender and nationality.”

But how can gender equality be increased in the corporate environment?

“The change needs to be joint. In gender equality especially, we need a firm commitment from the leadership, as well as the whole company. Everyone must act in partnership,” Istenes said.

Mandy Fertetics, sustainability and ESG expert and organization developer at Alternate Consulting, who moderated the roundtable.

Petra Pataki, counsel at Queritius, a Central and Eastern European law firm specializing in international dispute resolution, elaborated on the practical side of diversity in the legislative system.

“State court and arbitration tribunals are very specific decision-making bodies, but at the end of the day, they are also groups that are trying to reach a decision. It is true that groups usually outperform sole decisionmakers, and it is also true that cognitively diverse groups make better decisions,” Pataki said.

Why? Research supports the idea that if more discussion occurs before a decision is made, taking in an abundance of points of view, participants will have explored a more comprehensive range of ideas and possible solutions, ensuring that they arrive at the most suitable way forward.

Business research has suggested that diversity among board directors is of utmost importance to guarantee that Why Female Judges? the decision-making body has a variety “Why is it so important to have female of perspectives, skills, ages, genders, judges? Do they make different cultures, and ethnicities. Today, there is decisions? Research says not really,” no dispute about the essential nature of Pataki said. “So why is it important diversity on boards. then? Because of their attitude, The roundtable was broadcast as style, communication and reasoning, a live webinar on May 23. Citing there is a difference in the process an EY publication from 2020, itself, and the way a dispute is discussion moderator Mandy Fertetics, discussed is all the difference that sustainability and ESG expert and can be made,” she adds. organization developer at Alternate János Strohmayer, office leader in Consulting, noted that those Hungary for the global management companies who rate high on diversity consulting and executive search firm and inclusion on their board harness Egon Zehnder, agreed with this point. better team collaboration. Retention rates are also better, and their potential He argued that the more diverse the board, the more skill sets and to increase market share, or break into knowledge it possesses. He added that new markets, is greater.

an abundance of these is imperative in the current economic conditions for a business to flourish.

In a quickly changing environment, businesses are advised to get ahead of the curve, review their decision-making club, and fine-tune it along the lines of real commitment toward diversity, equity, and inclusion.

Moderator Fertetics noted that today’s business ecosystem might actually favor diverse decisionmaking bodies, adding that in a business landscape that is being swiftly remolded, one of the most critical factors for successful corporate operations is resilience.

Andrea Solti Istenes, country chair at Shell Hungary, addressed how vital resilience is today. She reminded the audience that with COVID, leaders have learned that markets are currently dominated by volatility. In this light, building strength in her organization has been a priority.

She said that she experienced the benefit of inclusion in leadership discussions during the pandemic, which resulted in better decisions.

She also emphasized that in working life, mistakes take place and must be regarded as learning opportunities so the whole organization can improve.

Assembling the Board

As the directors in a business play a critical role in making decisions, any company that wants to be successful must be mindful of assembling its board in such a way to ensure that the professionals making

“We need male partners in this. It must be a joint effort. When we talk about diversity, especially gender diversity, it cannot be done all alone by women. It needs to be done together as a joint effort. We women must advocate for ourselves, and we must join forces, as apparently, no one else will do it for us.”

She added that if a business aspires to understand the needs of its female customers, it also needs to ensure that the gender distribution is reflected in the board and leadership.

According to the leader at Shell Hungary, one of the causes of gender imbalance in the workplace today is that the workload is not shared at home. However, flexible and hybrid working scenarios, which have been popular since the pandemic rewired how business is done, greatly support women in performing their extra-professional duties. That, in turn, allows them to progress in their careers, she argued.

“We need male partners in this. It must be a joint effort. When we talk about diversity, especially gender diversity, it cannot be done all alone by women.

It needs to be done together as a joint effort. We women must advocate for ourselves, and we must join forces, as apparently, no one else will do it for us,” Queritius’ Pataki agreed.

The Budapest Business Journal was an official media sponsor of EU Diversity Month in Hungary.

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Budapest Business Journal | June 3 – June 16, 2022

Special Report Legal Services

Market Talk: New Government, New Laws, Fee Fears and Fresh Trends

ROBIN MARSHALL

BBJ: The new government has only just being formed. Do you expect a heavy legislative agenda? What are areas where we should look for new laws to be brought forward?

Péter Lakatos: In the first week after the formation of the new government, we have had an amendment to the constitution, a declaration of a state of emergency, and the introduction of some significant new legislation. It is clear that anyone doing business in Hungary needs to be alert to legislative changes and their consequences.

For foreign investors, the recently announced “utilities protection fund” and “defense fund,” to be funded from the “extra profits” of banks and multinational businesses, give an indication of what to expect, which for some of them will be painful. The government’s apparent aim to seek a balance between milking foreign investors to support the budget while not driving them away as investors will be increasingly difficult to maintain. Áron László: We expect new laws in areas the new government has identified as key sectors. These include food retail, construction materials, insurance, and telecom.

Graphic by VectorMine / Shutterstock.com

Some of the leading legal brains in Budapest talk to the Budapest Business Journal about the challenges and opportunites facing attorneys in Hungary in a competitive and challenging economic environment.

I hope the European Commission will not sanction the Hungarian nation and population by discontinuing the availability of EU funds. The commission must find other tools to enforce the rule of law if they find irregularities.

András Szecskay: We can expect substantial legislative changes concerning the economy and taxes. For the moment, I see two fields where new laws would be advantageous. Both are equally important.

1) Lawyers will handle land registration. This undertaking will need serious preparation. We count on the training from the bar associations, which will be available soon.

Zoltán Hegymegi-Barakonyi 2) Changes in escrow arrangements have become necessary, mainly thanks to the Sberbank liquidation. While it is evident that deposits made through law firms are not part of their assets, escrow payments at the bank are administered under the name of the law firm acting as an agent. We need regulations according to which clients’ funds are not exposed to any risk if the respective bank is in trouble. I consider it extremely important to maintain the availability of escrow

arrangements, irrespective of whether they come from small-scale property acquisitions or significant transactions: the client’s trust lies in the law firm and their lawyers. Escrow deposits should be handled as efficiently as possible.

Zoltán Faludi: Given the current economic climate in which the new government must function, the legislative activity in the coming months will have to focus on supporting the economy and possibly rethinking [replace easing] the tax environment.

BBJ: The rule of law issue is a live question for the European Commission.

How do you expect this to develop? Is it damaging the legal reputation of the country?

Zoltán Hegymegi-Barakonyi: The rule of law procedure could have a material impact on the country’s finances, which, in my view, is more important for the government than possible reputational issues. Therefore, I expect the Hungarian government to have constructive discussions with the EU to end the procedure as soon as possible.

PL: This is complicated and now inextricably linked to the discussion about the EU’s proposed Russian oil embargo. That surely damages the legal reputation of the country, which particularly worries us as lawyers, for whom the “rule of law” is fundamental, but new investors continue to arrive and do not seem to worry until it has a direct effect on them. ÁL: Uncertainty never helps businesses.

ASz: This is an evergreen topic.

Each side has its own opinion on the compliance question. The issue surely needs a thorough investigation.

BBJ: Three months of the war in Ukraine followed two years of COVID. Do you fear a wave of liquidations given the economic challenges some have faced?

Erika Papp: We have been anticipating a wave of insolvencies since the beginning of COVID-19 and again when the war started, but it never materialized. Of course, it made a big difference that there was a moratorium on loan repayments, which will be lifted this year. Rising interest rates are not helping, either.

However, advisors and insolvency specialists are divided on whether there will be a wave of liquidations or not.

Some people say that the foundations of the economy are strong, and banks and financial institutions have appropriate procedures in place to support borrowers in financial difficulty. In addition, the National Bank of Hungary has adopted many policies on how banks and financial institutions should deal with insolvencies.

Erika Papp András Posztl: COVID and the invasion of Ukraine have sped up fundamental changes, reversing some of the forces that caused deflation in previous decades, including cheap money and globalization. Now, global inflation is rising, while growth forecasts are down. Europe, especially the regions dependent on Russian oil and gas, may be hit even harder. A recession is knocking on the door, and, as a result, businesses in Hungary are facing multiple challenges. Many may face insolvency, as we have seen in the case of Tungsram, one of the country’s oldest industry behemoths.

Continued on page 12 ›››

12 | 3

Special Report

www.bbj.hu

Budapest Business Journal | June 3 – June 16, 2022

Continued from page 11 ›››

INSIDE VIEW

Real or Fake Discount: New Rules on B2C Price Campaigns Anikó Keller

Partner

NOTE: ALL ARTICLES MARKED INSIDE VIEW ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILITY

SZECSKAY ATTORNEYS AT LAW

May 2022 brought several wide-ranging changes in consumer protection as a result of the implementation of EU consumer protection legislation, the so-called “New Deal for Consumers.”

The changes concern many, if not all, steps of the sales process: rules relating to advertising, sales, and the performance of contracts were fine-tuned. Particular emphasis was put on addressing challenges created by the digital world based on practical experiences and feedback from stakeholders.

Below, we give you an overview of the new rules in advertising law, more specifically, announcing price reductions in B2C relations.

Article 2(1) of the Omnibus Directive amended the so-called Price Indication Directive or PID, which amendments were implemented in a Decree of the Minister of Innovation and Technology in Hungary. To assist businesses with interpreting the new rules, both the European Commission and the Ministry of Innovation and Technology (ITM) have issued separate guidance.

Most of the new provisions of the relevant Decree carry over the exact wording used in the PID. Any announcement of a price reduction must now indicate the prior price applied by the trader for a determined period before applying the price reduction. The prior price means the lowest price applied by the trader during a period not shorter than 30 days before the application of the price reduction.

It is worth highlighting that as the new provisions apply to all price reduction announcements, this means that if more price reduction campaigns are organized within less than 30 days, the prices announced in the second price reduction campaign must be compared to those of the first price reduction campaign (if it is the lowest price), and thereby, the commercial communication may be less attractive for consumers.

But what happens if the product has been on the market for less than 30 days? In such a case, the Decree stipulates that the prior price means the lowest price applied by the trader during a period not shorter than 15 days before the application of the price reduction. If the product has not been on the market at all, the ITM guidance confirms that, for new products, no price reduction campaigns may be held as no prior price exists, but introductory prices may be applied.

Gradual Price Reductions

A special rule applies for gradual price reductions. In this case, the prior price is considered the benchmark price to compare all discounted prices in the course of the price reductions. According to the EU guidance, this rule must be interpreted narrowly, however, and it only applies when the price is reduced progressively, without interruption, and without increasing the indicated “prior” price.

Finally, it is to be noted that these new rules do not apply to products that are liable to deteriorate or expire rapidly. In the case of these products, no prior price may be indicated. Here, the main question is what may be considered a product liable to deteriorate or expire rapidly.

The EU guidance here is quite general: first, it states that this is to be assessed case-bycase. Secondly, it gives an example for such goods: fresh food and drinks with short expiry time limits. The ITM guidance explicitly states that when deciding whether a food product is liable to deteriorate or expire rapidly, the “use by” or “best before” date is relevant. Namely, food products marked “use by” are liable to deteriorate or expire rapidly.

Businesses must pay close attention to organizing price reduction campaigns according to the new rules, as the consequences of non-compliance can be harsh; consumer protection authorities, including the Hungarian Competition Authority, may impose significant fines of up to 10% of the company group’s net turnover in the preceding business year.

www.szecskay.com

ZH-B: Many experts say that it will be difficult for the EU to avoid recession. If this is true, then I am afraid that there will be an increased number of liquidations and restructurings in the coming years, which means more work for lawyers.

PL: We haven’t yet seen any wave of new liquidations. The demand side is still there in the economy, but we have started to see some indicators pointing to a slow down. ÁL: We are afraid that the Ukraine war will bring harsher and longer-lasting consequences than COVID and will not leave Hungarian businesses unharmed.

Let’s hope that humankind, which made vaccines, can also make peace.

ZF: Those companies who successfully managed the COVID crisis will also be able to endure the war in Ukraine; they will not go under due to the war itself.

Hungarian companies have become much more flexible and responsive due

Péter Lakatos to the pandemic; thus, they can cope with the war. The economic challenges caused by it have a much broader effect on society, which is already causing difficulties for everyone, but a wave of liquidations is unlikely.

BBJ: How have those economic challenges hit the legal market? Is the pressure on fees getting higher?

Might we see law firms leave the market or change focus?

AP: No doubt, the speed of segmentation in the legal market will further increase due to these challenges. Firms offering legal services predominantly as a commodity may face a harsh and potentially self-destructing price war.

Others with the ability to innovate and adapt should still be able to thrive, given that the level of complexity of doing business in this part of the world has been increasing.

ZH-B: The legal market is very competitive, limiting firms when deciding on the rate of their fee increases. In addition, clients are unlikely to increase their legal budgets when facing difficult times. I do not know if any law firm would consider leaving the market, but I think that the law firms that will be successful in the coming years will be those that change

Áron László their business and service model to meet the fast-changing needs of their clients. ÁL: Customers are more willing to spend money on creating new businesses than on trouble-shooting.

BBJ: In terms of the speed of delivering justice, what is the situation today? Did COVID restrictions lead to a backlog of cases going through the courts? If so, has this been reduced? Has arbitration become a more popular option?

ZH-B: According to the 2021 EU Justice Scoreboard, Hungary performs very well regarding the estimated time needed to resolve administrative and civil cases.

The EU also recognizes that Hungary ranks very highly when it comes to digital solutions to initiate and follow proceedings in civil/commercial and administrative cases. Nevertheless, the number of new domestic arbitration cases is indeed growing. I do not think it is a consequence of the length of ordinary court procedures but rather the successful modernization of the Arbitration Court of the Hungarian Chamber of Commerce. ÁL: We have not seen material adverse changes in this respect.

András Posztl ZF: COVID definitely did cause cases to pile up, which will take some time to reduce, especially with the summer judicial vacation period fast approaching. We can say that, in general, litigation and arbitration Continued on page 14 ›››

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Budapest Business Journal | June 3 – June 16, 2022

PRESENTED CONTENT

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OPL in Legal Tech-led ‘Marriage of Equals’ Between London and Budapest Like the skyscrapers that tower over them, the Anglo-Saxon duopoly of New York and London tends to have an overpowering impact on the legal landscape, making it very hard for law firms from Central and Eastern Europe to carve out recognition.

But legal tech may offer a chance for local heroes to join the club and shine.

port it to the English language. Little surprise, then, that he firmly believes legal tech is the defining trend for law in the immediate future.

“Computers took over certain functions from humans in every industry, including the law. There are more administrative duties in a law firm than 25 years ago but far fewer nonfee-earners. Lawyers had to become more efficient in their work, and it was the computers that helped them in that process.” And he thinks much of the demand for tech solutions is driven by in-house legal counsels.

Exposure and Opportunities

ROBIN MARSHALL

“For 10 years, I have been trying to push legal innovation in London, but I often bumped into roadblocks because of our region’s reputation. But doing legal tech out of Budapest is credible,” says Miklós Orbán. “The IT industry has already paved the road for that,” he adds.

The co-founder of OPL, which celebrated its 10th birthday last year, Orbán is a self-confessed legal innovator. He also has a very different take on what a law firm should look like from the traditional model. Those two factors have led to a partnership with the London-based Gunnercooke.

“It is a challenger law firm in the United Kingdom, built on a very different financial model. If you spend some time on their website, you will see how different they are. It is almost the antidote to a traditional big law firm,” he says with a laugh.

“We didn’t want to sell out and just become a branch office. We wanted to be equals.” Orbán says the relationship stands on two pillars.

“One is to build up a [Gunnercooke] presence in every CEE country,” Orbán explains. “The other is legal tech. Together with their 40-plus operating partners who are not lawyers, Gunnercooke football, Gunnercooke private equity, as well as many other ventures, and equipped with our legal tech boutique, Gunnercooke is finally becoming the first legal ecosystem.

And they needed legal tech to do this as much as we need them to push OPL to the next level.”

Special Report | 13

The two firms are building a joint venture, with the Hungarian-U.S. qualified lawyer taking up a role in the London firm’s leadership team as the chief technology officer, with a remit to develop legal tech for Gunnercooke and its clients.

Marriage of Equals

A marriage of equals means the OPL name will continue to exist, but Orbán also has an interesting opinion on that.

“Brands matter less than people think in legal work. The client relationship is driven not by the brand but by the lawyer. Maybe 20 or 30 years ago the brand mattered more, and perhaps for some institutional clients, it still does, but most clients are portable and will move with the lawyer from law firm to law firm, which are becoming more like platforms.”

There are plenty of other areas where Orbán takes a less than traditional view. Take education; he spends part of his time at the University of Surrey, where he teaches algorithmic bias, “one of the most important legal issues of our age. But I am also involved in reconsidering the law school’s curriculum: a fascinating exercise.”

Many schools focus on specific skills, the more progressive on

“In the 1970s, all the trends in the legal world were driven by a few law firms in New York, whether we are talking about IPOs or mergers and acquisitions. Now, most law firms are lagging behind their clients. In-house counsels are a decade ahead of their external colleagues in business focus and tech-savviness.

They are being pushed by their superiors to be faster, more efficient, and transparent.”

That explains to rise in legal tech consultancies, Orbán says. But while these can help identify areas where digitalization could be brought in, they generally end up selling third-party software that may not be the best fit.

“We develop only tailor-made solutions that you do not have to learn over several months to get the full benefits.

Our legal tech is designed to do the job you need it to do and is, therefore, much more intuitive.”

Hungary may be at the cutting edge when it comes to legal tech, but it enjoys a less good reputation around the rule of law, he argues. Orbán Miklós Orbán thinks this is part of a broader trend of not wanting to step above the parapet, and he is deeply irritated by the business or tech, but the key, he response of his profession. argues, is to be multi-disciplinary.

He contrasts this with Poland, where “Lawyers need to learn the basics of the government is also at odds with many disciplines: business, finance, the European Commission, but where HR, not to mention data and computer he says 200 partners from the top sciences. Part of their training should law firms paid for an ad protesting be to work with non-lawyers on issues legislation that threatened the that are not purely legal. Law is not independence of the judiciary. some isolated reality: how can you “We should stand up for certain help your client if you don’t understand principles and do something for the what they do?” common good,” he concludes. “What He also thinks the law should be made strikes me in the IT world is the amount more understandable. Think of how of open-source software available for dense almost any legal document is. everyone: operating systems, computer “Basically, we have made up a languages, and complicated software are language only we understand, which made with no monetary benefit. Some gives us a sense of privilege,” he dedicated lawyers provide services for argues. He developed software that free, but our profession sacrifices so little measures the readability of legal texts in comparison. If there is one thing we and is now busy with his students to should learn from IT, it should be this.”

Background Bio Miklós Orbán is a qualified lawyer in New York and Hungary and has been in the legal industry for more than 20 years. He graduated from ELTE Law School, then earned his Master’s degree at Georgetown University as a Fulbright Scholar. Before Orbán

co-founded OPL in 2011, he spent several years at international law firms in London and Budapest, then served as British Telecom’s regulatory director in 25 countries for seven years. He mentors law students at the Queen Mary University of London and is an Institute of Advanced Studies Fellow at the University of Surrey.

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Budapest Business Journal | June 3 – June 16, 2022

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INSIDE VIEW

Energy Communities can Help in Reducing Energy Dependence Dr. Róbert Szuchy Managing Partner BSLAW BUDAPEST Bocsák & Szuchy Ügyvédi Társulás

NOTE: ALL ARTICLES MARKED INSIDE VIEW ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILITY

Community-based energy production has been present in Europe since the 20th century. In recent years, decentralized power plants using renewable energy sources have also become increasingly involved in energy production and management.

Climate change and growing energy dependency reinforce the European Union’s determination to build a low energy economy while making the energy we consume secure, competitive, locally produced and sustainable.

Following its initial publication in 2016, in 2019, the European Commission finalized the Clean Energy for all Europeans (CEP) package, which sets out the blueprint for achieving carbon neutrality by 2050. As part of the first edition of the CEP package, Directive 2018/2001/EU on the promotion of the use of energy from renewable sources (Renewable Energy Directive: Recast to 2030, or RED II) entered into force in December 2018, defining the concept of Renewable Energy Communities (RECs).

The CEP has the clear objective of clarifying the rights and obligations of individual or collective producerconsumers (prosumers) connected to the network. As regards consumer rights, it provides a framework for developing energy community regulation. Directive 2019/944/EU sets out a renewed market operating model, the main provisions of which have applied in Hungary from Jan. 1, 2021.

Exactly what we can call an energy community is difficult to define clearly, as there are many different forms of community and relationships between community and energy. For example, we could talk about a condominium that installs solar panels on the roof or an agricultural cooperative that puts up wind turbines, or a municipality that creates a jointly owned solar farm and energy storage unit.

The activity does not necessarily have

to be energy production; it could also be energy storage or distribution.

The actors in such communities can also be very diverse; in addition to natural persons, they include municipalities, non-profit organizations and small businesses. A local municipality can be the promoter of an energy cooperative in its territory or set up a non-profit enterprise to implement an energy community together with residents, small- and medium-sized enterprises, and other local actors.

Regulating Energy Communities Different practices have developed in the EU member states to categorize and regulate these communities, and EU law has sought to standardize this. The definition introduced by the European Union shows the importance of community ownership and management, the essentially non-profit nature of the operation, and the diversity of energy activities that can be carried out.

In addition to the concept of local energy communities, the concept of renewable energy communities is also found in RED II. The most significant difference between the two concepts is, of course, that renewable energy communities produce energy from renewable energy sources, whereas there is essentially no such restriction in the category of local energy communities.

Under current Hungarian legislation, energy communities have the right to establish a power plant, generate, trade and store electricity, establish a private transmission line, and operate a public lighting system.

As we have seen in the overview of the conceptual framework and the relevant regulations, the European Union has left a relatively large degree of freedom for energy communities to choose the organizational form that suits them best. Hungarian law is more specific in that it specifies two types: the non-profit company and the cooperative, which is considerably narrower. This restrictive regulation can be an obstacle to the development of energy communities.

At the same time, energy communities have the potential to pool and integrate locally produced electricity to achieve genuinely efficient decentralized energy production. It follows that energy communities are the most effective means of reducing energy dependence.

www.bslaw.hu

Continued from page 12 ››› compete in the legal market; and the trend is leaning towards arbitration, at least in the case of our clients.

BBJ: Are there any particular legal trends of which we should be aware?

EP: Last year, there were a record number of M&A deals on the market.

We anticipate a strong pipeline for 2022 again, almost returning to the pre-pandemic status quo. Therefore, we have good reason to be optimistic about future deal activity in Europe and Hungary. However, we must be cautious about the impact of Russia’s unprovoked invasion of Ukraine.

A new trend is that large law firms have started to deal with managed legal service projects. This means that some parts of the law firms function as a quasi-shared service center for multinational companies, but in the legal field. Hourly rates in Central and Eastern Europe are still much lower than those elsewhere in Europe,

András Szecskay

Zoltán Faludi the U.K. and the U.S. Therefore, it is worthwhile for large companies to outsource their legal functions here.

AP: Beyond ESG and AI, the unfortunate “stars” of recent months have been sanctions and international trade law. Dispute and restructuring lawyers will need to go on holiday rather soon this summer as this won’t be possible later in the year!

PL: The extra legal powers of the government, introduced during COVID and now maintained because of the war, needs special attention during day-to-day legal practice. For example, the FDI control regulations introduced in recent years have already affected and changed the outcome of some significant M&A deals. ÁL: The automation of legal services, contract generation, and law bots.

ASz: Artificial Intelligence is gaining momentum. Many practitioners gain from its use to make work more efficient.

It is not the remedy for all illnesses, but proper use can benefit our profession.

Legal Market Talk Panel • Erika Papp, managing partner, CMS Cameron McKenna Nabarro Olswang LLP • András Posztl, country managing partner, DLA Piper Posztl, Nemescsói, Györfi-Tóth and Partners • Zoltán Hegymegi-Barakonyi, managing partner, HegymegiBarakonyi Baker McKenzie

• Péter Lakatos, managing partner, Lakatos, Köves and Partners • Áron László, partner, Oppenheim Ügyvédi Iroda • András Szecskay, founder and managing partner, Szecskay Attorneys at Law • Zoltán Faludi, managing partner, Wolf Theiss Faludi Erős Ügyvédi Iroda

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Budapest Business Journal | June 3 – June 16, 2022

PRESENTED CONTENT

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Green Revolution Finally Showing its Face Erika Papp, managing partner at CMS Hungary and head of finance for CEE/CIS; Gábor Czike, real estate and construction partner; and Péter Simon, the energy, projects and construction partner, discuss the latest environmental, social and governance trends with the Budapest Business Journal.

ROBIN MARSHALL

After years of talking about the green revolution, there are finally concrete signs that lawmakers, industry and consumers are taking it seriously.

“From our point of view, we have talked about it so much, ESG and green projects. For 10 years, it has been on our agenda, and it never got any traction, basically, and finally, something is happening,” says Papp. “It is very exciting to see the new wave of projects in the pipeline.”

There are many reasons why that should be so today. The most obvious point is that time has passed; in the last decade, politicians, businessfolk, and citizens have realized that the way we live and work has to become more sustainable for our planet and our descendants.

Technology has improved, bringing costs down. National and international lawmakers are bringing in ever stricter regulations. Investors, developers, tenants and their staff are all looking for greener alternatives. And companies are becoming more focused on futureproofing themselves, trying to anticipate what lies ahead.

Part of this potpourri of contributing elements is an institution that does not always get recognition as a trend center: the Hungarian central bank.

“It is great to see the National Bank of Hungary so much in the forefront of everything modern,” Papp says. “Now we have specific teams in the national

bank fully dedicated to the green idea.

The MNB is one of the first among the EU central banks that started to push the whole green idea and issued all sorts of regulations, expectations and recommendations to the Hungarian financial sector. The MNB expects banks’ boards and internal organizations to be changing and more aligned with green expectations. Kudos to it.”

Incentives and Motivations The overall effect is that “incentives and motivations” and the requirements for ever more transparent reporting are accelerating the adoption of green financial products, Papp says. New EU legislation adds green reporting requirements to the Markets for Financial Instruments directive, for example.

“If you are an environmentally conscious investor, you can steer your investments so they will mainly be made in greener products,” she explains.

Customers will also be able to choose where they bank based on environmental issues, now the MNB demands banks report annually on how green their operations are.

When you talk about green matters, the first thought is almost always connected to energy and renewables. In Hungary, that has in recent years almost exclusively meant solar. But it wasn’t always the case, as Simon recalls. In the early noughties, “everyone wanted to be in wind,” he says.

Gábor Czike

Special Report | 15 targeted by national and EU lawmakers.

“A regulation that new residential buildings should have close to zero energy consumption will come into force from the end of June this year,” he says.

Elsewhere, the EU’s New Green Deal and taxonomy put an ever-greater emphasis on ESG reporting.

“The investors and buyers of these properties consider this [ESG] element of the project essential for the value creation,” Czike notes. Tenants, meanwhile, have their own interests at heart. Green certification should ensure energy costs are “kept to a minimum, and also they can also present in their ESG report that the building they occupy complies with green requirements.”

Czike has been in real estate for 20 years and talking about the “green revolution” for 10. “Until now, it was more like a marketing or PR issue, but it has turned serious,” he says. “I see the beginning of fundamental change.

The most important reason for this is economic motivations, with green financing, and the commitment of many to only invest in ESG-compliant products to ensure sustainability in the long run; this makes lessgreen products more difficult to sell.

Consequently, developers see it is less profitable to do something noncompliant with ESG,” he insists.

“Wind would be very useful today. It has different technical characteristics that could be used, to some extent, to balance the supply from solar. Like solar, it is not predictable, but the generating capacity for wind turbines is much bigger,” he notes.

Balancing weather-dependent renewables is one of the most significant challenges facing the energy sector. The sun doesn’t always shine, and the wind doesn’t always blow. To guarantee supply, power stations are needed that can be brought online quickly, which for now means natural gas is an essential backup in Hungary, Simon points out.

Another step forward would be so-called battery storage, where renewable energy could be stored once generated if not needed immediately.

The technical solution for this exists, though there are no significant examples in Hungary today.

“We are talking to one client who has carried out a battery storage investment in Romania and is interested in bringing it to Hungary,” says Papp. “They reached out to Péter and me to see what Péter Simon the regulatory environment is, how something like this could be established here, but I also heard from Hungarian Next comes sustainability, clients that investors are considering especially growing energy prices. something like this.”

The third element, though it has Indeed, national and EU discussions less weight, is the general seem to point in this same direction, expectation of the employees. with future licenses likely to demand “Those industrial projects that plants that have both generating and are just about to start now, for some storage capacity.

Erika Papp example, are really looking into the future and trying to comply Weather-dependent with requirements they expect Renewables A 2009 tender that would have seen to be enacted. The expectation is “The simple permitting of weathermore licenses granted was revoked regulations will become stricter with dependent renewables without secondary higher levels of ESG requirements. when the current government was first reserve capacity and/or considerable returned to power in 2010, and the rules Especially with long-term projects, grid upgrading is not the future. They for siting wind turbines were rewritten developers and investors are trying so no settlement could be nearer than 12 will need to install solar [or wind] to figure out what the future will and storage capacity and/or grid km. That effectively prohibited any new bring and prepare for it. We were development together; that’s what we wind farms, a unique move within the asked to do a human rights due expect,” Simon says.

EU, Simon says. Despite that, though, diligence as part of a real estate Real estate is right at the forefront of there are rumors that sooner or later, transaction. This is now considered sustainability debates and is increasingly a possible element of ESG reporting.” wind could return to the mix.

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PRESENTED CONTENT

New Partner at Oppenheim: István Szatmáry on his Background and Plans BBJ: You have recently joined Oppenheim as a partner. Tells us about your story.

István Szatmáry: Before joining Oppenheim, I worked as the head of the competition practice at a reputable international law firm in Budapest and later as group head of legal and compliance at a Hungarian media group and a management board member.

Both the various competition- and antitrust-related tasks (that usually get relevant for all businesses, sooner or later) and the managerial aspects added a lot to my professional career and helped me realize the best fit for the next step. Joining Oppenheim with almost 25 years in the legal profession is a significant step forward, not only due to the position but because of the unique spirit of the firm, which I believe is something truly outstanding in the Hungarian market.

BBJ: What were the main drivers for this move?

ISz: I have known some of the partners and associates at the firm for a long time; we were in the same market for almost 20 years when I used to be an attorney. Once I decided to move into industry, I acted as Oppenheim’s primary contact at the group where I worked. So, I have seen the firm both as a competitor and a service provider.

You might expect to notice crucial differences between the two types of relationships; however, surprisingly, I had the same impression in both instances. I asked myself: “Is this just a coincidence, or are there specific reasons behind it?” I concluded that it was not just by chance: the answer lay in the spirit and values of the firm. It provides high-quality, cutting-edge advice in a remarkably professional manner, with the flexibility that you can only have if partners can act independently. I found these features and the spirit very reassuring, and from the first of our discussions, I felt – on both sides – the inspiration to move our relationship to the next level. After all, that inspiration is what makes it attractive to join a new team.

BBJ: What plans do you have as the new head of the competition team?

ISz: The question may be more complex than it at first seems. I could list a couple of specific action items that should be achieved and are generally on every partner’s list when promoted to such a position. These are very important, indeed, and sufficient focus should be put on them. However, to be successful in the long run, you need to invest in the relationship; you need to give something, some external experience or new ideas. Having been an attorney with a reputable law firm

Sanctions Compliance: ‘Never Take Shortcuts, Keep Checking’ In today’s business environment, companies must deal with a high level of complexity presented by geopolitical affairs, not to mention the aftermath of the global pandemic. The unprecedented flood of sanctions has reinforced the necessity for companies’ compliance departments to spend significant resources to try and navigate the stormy ocean caused by them.

BALÁZS BARABÁS

Dr. István Szatmáry, Partner and then having seen a business from the inside (on the managerial side), knowing what managers need to know and understand to make viable business decisions, I think I can give my combined experience to Oppenheim.

BBJ: What type of experience and what kind of new ideas?

ISz: My contribution to the firm should impact not only the advice we provide but also the organization in general. Regarding the advice to clients, I think my addition could be using my experience “on the other side,” i.e., my experience as a client receiving advice from various law firms and translating that advice for decision-makers who assess the impacts of their decisions commercially.

BBJ: And how can your managerial experience be built into the service?

ISz: I have seen how business decisions are prepared and taken and what standard processes are applied when a delicate issue is decided one way or the other. Even if a partnership or service line is a different type of business than a corporate management board, the operation should be at least partially standardized above a certain level of complexity. The real challenge is to pull the strings together without losing the existing spirit of an organization. I hope I can find a good balance here as well when heading the competition practice of Oppenheim and take our service quality up to a new level.

And more is yet to come; therefore, companies must build robust sanctions compliance systems under extreme time pressure. The European Council agreed the 6th package of EU sanctions against Russian and Belarus companies and individuals on May 31.

Though some sanctions against Russia have been in place since 2014, they stepped into the spotlight after the escalation of the Russo-Ukrainian conflict this February. The scope of products and services affected and the companies subject to various sanctions have broadened significantly. János Rinfel, a senior associate at KPMG Legal Tóásó Law Firm, highlights the risks EU companies face and explains how to tackle the challenges posed.

BBJ: What is the background to these sanctions?

János Rinfel: Sanctions are not something new in international politics.

Diplomatic sanctions have been around for a long time when it comes to bilateral relations and have been a clear indication of a deteriorating situation and relationship between two states.

2014 was a significant milestone for sanctions, as the package against Russia then went far beyond any previous measures. As an EU member state, Hungary must apply the EU regulations directly, without any further legislative action necessary. The events of February 2022 have caused the importance of sanctions to reach new heights.

Therefore, companies must develop new internal policies and mechanisms to counteract their complexity.

BBJ: What issues should European companies consider?

JR: Companies must conduct very detailed third-party due diligence

János Rinfel, senior associate at KPMG Legal. procedures that go all the way up to the ultimate beneficial owner (UBO) of their contractual partners. Also, even if a potential partner is included on a sanctions list, it does not necessarily mean that one cannot deal with such an entity/private individual. Sanctions should not be looked at as a binary switch, that not being included on the lists means “OK,” while being included means “Not OK.” Sanctions can rather be characterized as a broad scale of restrictive measures introduced against a private person or a company. The far end of the scale is that a company’s assets are frozen, which practically means that you must not deal with any such entity or private individual. In this case, sanctions stipulate that no economic resources can be made accessible to such an entity. A very recent case was former Chelsea Football Club owner Roman Abramovich. Mr. Abramovich [through a complex corporate web] has a fancy

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Budapest Business Journal | June 3 – June 16, 2022

“Before you effectuate any transactions with possibly affected business partners, make sure you conduct a thorough internal verification process.

Do not skip this, not even a single time. Everything must always be checked and, most importantly, constantly monitored after the fact.”

if a company seeks to do business with Russian or Belarus partners; therefore, new procedures will need to be implemented to identify your business partner’s UBO. Furthermore, preliminary identification is just the start; ongoing monitoring is required to ensure compliance in the long run.

I usually suggest bi-weekly checking and using practical tools that offer automatic monitoring services and warnings if any changes affect the status of monitored business partners. Any such changes may require you to reassess the relationship and take measures based on a cost-benefit analysis. How much time and monetary resources would need to be invested in screening the partner and effectuating changes? Is it still profitable to do business with this partner, and what happens if the risks are out of your comfort zone? This is where we, as lawyers, can best help.

Photo by Panchenko Vladimir / Shutterstock.com

BBJ: What is your experience regarding Hungarian companies and their attitude to sanctions?

JR: It is a widely spread misbelief that they think they have nothing to do with sanctions. For instance, they believe that the computer parts they export For EU companies willing to fully can hardly be related to any military comply with applicable sanctions operation. This is not true. To stick with regimes, we would suggest the this example, computers or IT devices following four-step protocol: could be considered dual-use, capable 1. First, check any business partner, of being utilized for both civilian and including its UBO and majority owners. military applications. Trade in these 2. Second, if the business partner is types of goods is heavily regulated, as subject to EU sanctions, conduct a they can be classified for civilian use and detailed analysis. then transformed for military purposes.

3. Third, verify the exact scope of Another issue is that Hungarian products and services and compare companies may believe that, if there is them to any sectorial sanctions. a problem, some authority or their bank 4. Fourth, if the scope of products and will warn them before they make the services are not covered, go ahead. “wrong move.” This is not true either.

If those may be affected by sectoral For example, if the company makes sanctions, conduct a detailed analysis. a wire transfer to a Russian partner, You should know that in any case, if the bank will not automatically stop a sanction applies to your envisaged the transfer if the partner is subject to dealings, you can seek a license to sanctions. This is a common mistake. get clearance.

To wrap up, not just the business partner but also the goods and services BBJ: Billionaires rarely expose must be equally checked. Furthermore, themselves as owners of expensive before you effectuate any transactions assets; they instead prefer to hide with possibly affected business behind complex offshore company partners, make sure you conduct a schemes. How can authorities thorough internal verification process. establish who the actual owner(s) are? Do not skip this, not even a single time.

JR: Beneficial owners must always Everything must always be checked be identified in the EU. However, it is and, most importantly, constantly true that, in most cases, revealing the monitored after the fact. Never take ownership structure can be very difficult shortcuts and keep checking.

INSIDE VIEW

Green PPAs: Popular new Risk Management Against Energy Price Volatility László Kenyeres

Ádám Lukonits

Partner

Associate

WOLF THEISS BUDAPEST

WOLF THEISS BUDAPEST

Solar energy has been the fastest-growing energy generation technology of the last decade. It is also gaining ground in Hungary in the industrial, corporate and residential segments.

The government has already launched various support schemes. For example, in addition to the widely known and oft-praised METAR tenders supporting mostly industrial power generation, there is also a residential solar tender offering a 100% state subsidy and a home renovation program with a 50% state subsidy; both are very popular among residential consumers.

However, industrial and corporate consumers are in a different situation compared to the residential sector.

For example, many companies, such as those in the metal and chemicals industries whose energy bills represent a significant proportion of their cost structure, are painfully affected by the increase in electricity prices and are not protected by those energy prices kept forcibly low by the government, and which are available for households and small- or medium-sized enterprises. The availability of solar technology that can cope with higher consumption needs may, therefore, be a priority for these large companies. Some have the option of installing solar panels on their roofs or investing in other types of renewables projects, while others can only consider a green power purchase agreement (PPA) due to their specificities.

What are PPAs and how do they come into play when discussing solar energy?

PPAs are contractual agreements between buyers (off-takers) and sellers (generators) on the sale and purchase of a specific amount of electricity that is (or will be) generated by a renewable asset.

PPAs are usually signed for a long-term period of between 10-20 years.

PPAs can provide security that the project will bring a return on the capital investment upon completion by selling the project’s future energy generation over the long-term to a designated buyer, which can reduce cash flow uncertainty even without a state subsidy.

It can optimize the risk/return ratio by

managing the (sometimes extremely volatile) changes in energy prices. PPAs can also be helpful for investors in securing third-party funding for their projects as the off-taker’s long-term commitment to pay an agreed price for the electricity can raise financiers’ confidence in the project.

For industrial or corporate consumers, perhaps the most critical aspect is the capability to manage the price volatility risk. If a consumer can pay a fixed price for the electricity for a longer tenor, this can significantly improve productivity and cost efficiency, which can be an enormous advantage in the market. It also enables a company to (indirectly) fund a renewables project and receive guarantees of origin or other types of green certificates directly from the green producer.

Therefore, not only the generator can ensure a secure future stream of revenue, but the off-taker can also hedge the volatility in energy prices by purchasing a certain amount of energy at a fixed cost and, at the same time, contribute to achieving its own ESG targets.

It is, therefore, no surprise that PPAs are becoming more popular in Hungary and that banks and other stakeholders are becoming more open and interested in the topic.

Somewhat counteracting these trends is the fact that solar power is a weather-dependent energy source, and the companies operating the transmission and distribution grids have a hard time managing too much variability. The Hungarian transmission system operator (MAVIR) has just put a permanent halt to project developments and is only accepting new industrial-scale solar capacity under very tight conditions as the technical possibilities ran out. This could slow the uptake of PPAs and temporarily limit them to projects built or under development that have already secured proper grid connection.

Overall, as PPAs are still relatively new in Hungary, facing significant restrictions and regulatory hurdles, therefore ongoing up-to-date legal assistance is essential for investors, consumers and financiers interested in this type of risk management structure.

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NOTE: ALL ARTICLES MARKED INSIDE VIEW ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILITY

yacht harbored in Turkey. The problem was that a British company operated the harbor. As sanctions usually have extraterritorial effects [applicable to U.K. companies even outside of British territory], the harbor operator allegedly breached U.K. sanctions with its activities in Turkey in providing harboring services.

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Budapest Business Journal | June 3 – June 16, 2022

Baker McKenzie, CMS win Law Firm of the Year Titles The Budapest offices of two international law firms enjoyed success in the annual spring round of awards.

in key jurisdictions in the region.

They reflect achievements over the past 12 months, including strategic growth and excellence in client service. They honor the work of national and international law firms across the region based on research conducted for the most recent edition of the Chambers Europe directory.

“It’s fantastic to be named as this year’s leading law firm in Hungary for the second consecutive year,” confirmed Erika Papp, managing partner for CMS in Hungary.

Significant Transactions BBJ STAFF

CMS was awarded Law Firm of the Year in Hungary and Poland at the Chambers Europe Awards 2022, held on April 22 in Madrid for the second consecutive year.

Hegymegi-Barakonyi Baker McKenzie, which turns 35 in 2022 (see sidebar), was named Law Firm of the Year for Hungary at the IFLR Europe Awards on May 5, also for the second year in a row.

The Chambers Europe Awards recognize a law firm’s pre-eminence

“We are pleased to have supported our clients on some of the market’s most significant financial sector transactions, including advising German Commerzbank AG on the sale of its subsidiary; Hypo-Bank Burgenland on the sale of Sopron Bank; and Corvinus Plc. on the acquisition of Aegon Hungary General Insurance Plc. and Union VIG Insurance Plc.,” Papp said.

“We also pride ourselves in offering innovative managed legal services out of the country, providing global support to some of the largest global companies. We are delighted that

Chambers has recognised our marketleading position and unwavering commitment to our clients,” she added.

CMS was also shortlisted in the Law Firm of the Year categories for CEE and Germany and the Pro Bono: Outstanding Firm section in Hungary.

Sam De Silva, a CMS partner in the United Kingdom, was nominated for his outstanding contribution in the Diversity & Inclusion section.

“It […] shows our dedication to legal innovation, which we continuously develop in order to ensure the best and most comprehensive advice to our clients on all mandates.”

The recognition follows CSM’s win at the 2021 CIJ Awards back in November in Hungary, where it was awarded the “Law Firm of the Year” title for its standout work in the real estate sector.

Over at Baker McKenzie, meanwhile, the Budapest office was named Law Firm of the Year for Hungary at the prestigious IFLR Europe Awards. The recognition is said to be based on legal innovation, and focuses on deals that break new legal ground, set precedents, and develop the legal environment for cross-border M&A and corporate finance transactions.

Status Testament This award is a testament to Baker McKenzie’s status as a market-leading international law firm in Hungary and a reflection of the work of its outstanding teams on complex crossborder transactions, the law firm said in a press release.

“It also shows our dedication to legal innovation, which we continuously develop in order to ensure the best and most comprehensive advice to our clients on all mandates,” the company statement continued. The award was received on the night by partners Ákos Fehérváry and József Vági.

“Our M&A and banking and finance teams work seamlessly and that makes us outstanding when it comes to cross-border, high stakes transactions,” said Fehérváry, co-head of the corporate/M&A business line.

PRESENTED CONTENT

What’s in a Name? Synergies, Growth and Expectations HBK Partners became Moore Legal Kovács as of Dec. 1, 2021. The Budapest Business Journal asked Márton Kovács, managing partner of the firm, about the reasoning behind the change.

BBJ STAFF

BBJ: Why did you decide to join Moore Hungary and continue as a member firm of the Moore Legal network after successfully working as an independent boutique firm?

Márton Kovács: As is often the case with such significant changes, joining a global brand was in line with our longer-term strategic goals, but luck was also involved.

As a substantial portion of our work is primarily from M&A deals and capital market transactions, we have seen an increasing demand from our clients for a permanent team working closely with us to deal effectively with the financial and tax matters associated with these types of deals.

My experience is that, especially in the private equity and venture capital segment, clients really appreciate and have almost come to expect a “onestop shop” service. Meanwhile, as fate would have it, when we were still operating independently in

fortunate to receive a steady stream of assignments related to hotel law from both developers and financiers. Moore Global’s Hotel and Leisure global leader is Márton Takács from Moore Hungary, an incredible credit to them and an excellent opportunity for us. This synergy of competencies is almost unique in the Hungarian market.

2021, we were involved in around 8-10 transactions together with Ákos Boross and his excellent team at Moore Hungary. We quickly developed a chemistry with them, as they are also a young and agile team with a strategic vision, so our joining forces almost seemed inevitable.

BBJ: What changes has the development brought to the dayto-day running of the law firm?

MK: I and some of my colleagues started our careers in Big Law in the mid2000s, when, during the real estate and M&A boom, it was “raining work.”

I, therefore, opened my firm straight after the bar exam. After more than 15 years of practicing law as an independent firm and gaining a wealth of experience and perspective that I believe can only be acquired through such an operation, I have now come to enjoy the benefits of a global brand. All the more so because the structure offered

by Moore Global and Moore Legal gives us significantly more autonomy, and in some ways, demands it, than operating

Márton Kovács, managing partner under a Big Four. I see my colleagues enjoying the change, too. We have retained our separate office location for the time being, but our medium-term plans include moving into a joint office with the financial team.

BBJ: Besides M&A, venture capital, and capital market transactions, where can you develop your synergies?

MK: I would definitely include advising on hotels, including development, financing, acquisition and operation.

In 2007, I was involved in the purchase of the most extensive hotel portfolio at the time, and we have since been

BBJ: As managing partner of a law firm today, what do you consider your biggest challenge?

MK: Regardless of the industry or sector, it takes time for all managers to realize that the most important and most challenging task is to find and then keep the right people so that they feel their individual development is achievable within the firm. But as a lawyer and partner, you really have to make room for this. You can’t micromanage a law firm forever, as a oneperson army, and especially not to put it on a growth trajectory and keep it there. This task is not easy, but we are fortunate to have a generation of young lawyers who have grown up with us and with whom we plan to grow together, both professionally and personally, in the long term.

3

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Budapest Business Journal | June 3 – June 16, 2022

Special Report | 19

INSIDE VIEW

Eszter Sieber-Fazakas LL.M. Head of Commercial & Trade/Digital Business Practice Groups at Noerr Budapest

Noerr and Partners Law Firm

Now that almost every company and organization has become familiar with GDPR and complies, more or less, with its requirements, a new challenge is on its way. The European Commission has adopted a proposal on a new legal framework for fair access and use of data.

Ákos Fehérváry (left) and József Vági at the IFLR Europe Awards on May 5. Photo courtesy of Hegymegi-Barakonyi Baker McKenzie “We deliver not only sound legal advice but timely and precise execution of complex cross-border transactions. We are glad that our teams’ efforts get recognized by this award.”

Vági, head of banking and finance, added: “We would like to [...] thank our clients for their trust and to congratulate our colleagues for their dedication and leadership, which are so important in our commitment to our clients’ success.”

Baker McKenzie’s 35th Budapest Anniversary Established in Budapest in 1987, Hegymegi-Barakonyi Baker McKenzie celebrates its 35th anniversary this year.

“We take pride in the growth and success we have achieved in the past 35 years, and this is entirely down to our fantastic team and loyal clientele,” commented Zoltán Hegymegi-Barakonyi,

managing partner of Baker McKenzie Budapest.

“We are thankful to our clients from various industries for their continued trust in our services and appreciate the dedication and hard-working attitude of our colleagues. Servicing our clients to the highest standards will remain our main goal,” he said.

But while it reflects on the past, the firm says it remains committed to continuing its role as what it calls the “new lawyers:” remarkably talented industry experts driven by thought leadership and leveraging technology, underpinned by the core principles of integrity and quality.

Reflecting on the twin IFLR Europe Hungarian law firm of the year Awards in 2021 and 2022, Hegymegi-Barakonyi said, “This recognition is testament to the hard work and dedication of our teams, not just this past year but since we first opened 35 years ago.”

The proposal, nicknamed the “Data Act,” aims to ensure fairness by setting up rules regarding the use of data generated by Internet of Things (IoT) devices. The act focuses on “digital data” (not only personal), which means all data created when using IoT objects. The beneficiaries would not only be consumers or natural persons; in general, a fairer distribution of digital data should be achieved.

The EC sees the concentration of data in the hands of a few big companies as an obstacle to datadriven innovation. The Data Act makes sure that the persons having generated the data by using a product or related service have access to it and can use that data. Data holders, on the other hand, are obliged to make data available to such recipients. Data should also be made accessible to public-sector bodies or EU institutions, agencies, or bodies where there is an exceptional need to perform a task carried out in the public interest.

The practical implementation of specific provisions of the Data Act is not yet clear. A fundamental question is how to keep consistency with GDPR: the data holder will be obliged to make data available to the recipient due to the Data Act but is prohibited from disclosing any personal data according to GDPR. Both European regulations threaten heavy fines;

the Data Act determines sanctions of up to EUR 20 million, or 4% of the total annual revenue, if its provisions are violated.

Further distinction difficulties may arise in cases where several parties are involved in a legal relationship: for example, in the automotive industry, where the features of smartor connected cars are concerned.

Who will be entitled to have access to the data: the owner, the registered keeper, and/or the driver of the car? And who will be responsible for making the data available since it is not easy to define who controls the technical design of data flow in a complex supply chain.

For example, in the case of an automaker, it is not sure that it is in control of the technical design of all software components and their interoperability.

The protection of trade secrets also raises questions. If the right of access to data concerns a trade secret, the data can only be transferred if the user takes measures to protect the data.

Will it be sufficient to refer to the existence of a trade secret?

If so, this will eliminate many data access claims.

To equalize the unequal power relations between contracting parties, the Data Act regulates the prohibition of unfair contract terms applied to micro-, smalland medium-sized enterprises for all data usage or license agreements.

This practice was previously only applied to consumers. The Data Act also contains a catalog of contractual terms deemed to be unfair. The buzz here is that companies will need to set up a fair data sharing contract or adapt their existing documentation.

Data processing service providers, meaning cloud or edge providers, must make it easier for customers to switch between services, which should be free of charge in any case. Further, they must ensure interoperability. Reasonable steps are to be made to prevent government access to non-personal data stored in the EU, or the transfer of data that is incompatible with European or national law.

In summary, companies dealing with the IoT must prepare themselves for massive change. The good news is that there is still some time, as the Data Act is not expected to enter into force before 2023.

www.noerr.com

NOTE: ALL ARTICLES MARKED INSIDE VIEW ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILITY

Data Act: New European Legislation Coming for Data Economy

20 | 3

Special Report

www.bbj.hu

Budapest Business Journal | June 3 – June 16, 2022

Top-ranked law firms BELOW IS THE LIST OF LAW FIRMS WITH INTERNATIONAL AFFILIATIONS OPERATING IN HUNGARY THAT HAVE BEEN RECOMMENDED IN THE MOST AREAS OF LEGAL ACTIVITIES IN 2022 (IN TOP CATEGORIES OF VARIOUS RANKING BODIES, E.G. BAND 1 WITH CHAMBERS EUROPE AND CHAMBERS GLOBAL AND TIER 1 WITH LEGAL 500).

THE CHARTS OF THE TOP- RANKED LAW FIRMS DO NOT INCLUDE IFLR DATA THIS YEAR, BECAUSE IT WILL BECOME AVAILABLE ONLY AFTER OUR PRINT DEADLINE. PLEASE LOOK FOR AN UPDATED VERSION OF THE SUMMARY OF THE CHARTS IN THE 2022-2023 EDITION OF THE BOOK OF LISTS, DUE OUT THIS FALL.

CHAMBERS GLOBAL 2022 BAND 1

CHAMBERS EUROPE 2022 BAND 1

LEGAL 500 2022 TIER 1

TOTAL NUMBER OF RECOMMENDATIONS

3

7

9

19

2

3

7

12

2

2

5

9

1

3

5

9

–

3

5

8

–

1

7

8

1

2

3

6

CMS

DLA PIPER HUNGARY

ANDRÉKÓ FERENCZI KINSTELLAR

DENTONS

HEGYMEGI-BARAKONYI AND PARTNER BAKER & MCKENZIE ATTORNEYS-AT-LAW

LAKATOS, KÖVES AND PARTNERS

SZECSKAY ATTORNEYS AT LAW

3

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Budapest Business Journal | June 3 – June 16, 2022

Special Report | 21

Top-ranked law firms CHAMBERS GLOBAL 2022 BAND 1

CHAMBERS EUROPE 2022 BAND 1

LEGAL 500 2022 TIER 1

TOTAL NUMBER OF RECOMMENDATIONS

1

1

3

5

–

–

4

4

–

1

1

2

–

–

2

2

–

1

1

2

–

1

1

2

ALLEN & OVERY KÁDÁR

–

–

1

1

DANUBIA LEGAL

–

–

1

1

KAPOLYI LAW FIRM

–

–

1

1

VÁMOSI-NAGY ERNST & YOUNG LAW OFFICE

–

–

1

1

VJT & PARTNERS

–

–

1

1

OPPENHEIM

SIEGLER BIRD & BIRD ÜGYVÉDI IRODA

JALSOVSZKY

NAGY & TRÓCSÁNYI

SBGK ATTORNEYS AT LAW

WOLF THEISS BUDAPEST

22 | 3

Special Report

www.bbj.hu

Budapest Business Journal | June 3 – June 16, 2022

CHAMBERS GLOBAL 2022 LEGAL ACTIVITIES

BAND 1

BAND 2

BAND 3

BAND 4

Banking & Finance

Andrékó Ferenczi Kinstellar CMS DLA Piper Hungary

Dentons Lakatos, Köves & Partners

Allen & Overy Kádár Hegymegi-Barakonyi and Partner Baker & McKenzie Attorneys-at-Law Siegler Bird & Bird Ügyvédi Iroda Szecskay Attorneys at Law

HP Legal Hajdu & Partner Law Office Jalsovszky Noerr Schoenherr Hetényi Attorneys at Law Vámosi-Nagy Ernst & Young Law Office Wolf Theiss Budapest

Corporate/M&A

Andrékó Ferenczi Kinstellar CMS Dentons DLA Piper Hungary

Lakatos, Köves & Partners

Allen & Overy Kádár Hegymegi-Barakonyi and Partner Baker & McKenzie Attorneys-at-Law Oppenheim Siegler Bird & Bird Ügyvédi Iroda Szecskay Attorneys at Law Wolf Theiss Budapest

Forgó, Damjanovic & Partners Partos & Noblet / Hogan Lovells Schoenherr Hetényi Attorneys at Law VJT & Partners

Dispute resolution

CMS Oppenheim Szecskay Attorneys at Law

DLA Piper Hungary Lakatos, Köves and Partners Nagy és Trócsányi

Siegler Bird & Bird Ügyvédi Iroda

CHAMBERS EUROPE 2022 LEGAL ACTIVITIES

BAND 1

BAND 2

BAND 3

Banking & Finance

Andrékó Ferenczi Kinstellar CMS DLA Piper Hungary

Dentons Lakatos, Köves and Partners

Allen & Overy Kádár Hegymegi-Barakonyi and Partner Baker & McKenzie Attorneys-at-Law Siegler Bird & Bird Ügyvédi Iroda Szecskay Attorneys at Law

Competition / Antitrust

CMS Hegymegi-Barakonyi and Partner Baker & McKenzie Attorneys-at-Law

Dentons DLA Piper Hungary Lakatos, Köves & Partners Oppenheim

Allen & Overy Kádár Andrékó Ferenczi Kinstellar Schoenherr Hetényi Attorneys at Law Szecskay Attorneys at Law

Corporate / M&A

CMS Dentons DLA Piper Hungary

Andrékó Ferenczi Kinstellar Lakatos, Köves & Partners

Hegymegi-Barakonyi and Partner Baker & McKenzie Attorneys-at-Law Oppenheim Siegler Bird & Bird Ügyvédi Iroda Szecskay Attorneys at Law Wolf Theiss Budapest

Dispute resolution

CMS Oppenheim Szecskay Attorneys at Law

DLA Piper Hungary Lakatos, Köves & Partners Nagy & Trócsányi

Gárdos Mosonyi Tomori Siegler Bird & Bird Ügyvédi Iroda

Employment

Hegymegi-Barakonyi and Partner Baker & McKenzie Attorneys-at-Law

CMS DLA Piper Hungary Pál és Kozma Ügyvédi Iroda Szecskay Attorneys at Law VJT & Partners

Dentons Oppenheim

Intellectual property

SBGK Attorneys at Law Szecskay Attorneys at Law

CMS Danubia Legal Hegymegi-Barakonyi and Partner Baker & McKenzie Attorneys-at-Law Oppenheim Siegler Bird & Bird Ügyvédi Iroda

Life sciences

CMS Hegymegi-Barakonyi and Partner Baker & McKenzie Attorneys-at-Law

Szecskay Attorneys at Law

CLV Partners KNP Law Nagy-Koppány & Lencs

Projects and energy

Andrékó Ferenczi Kinstellar Wolf Theiss Budapest

CMS Dentons DLA Piper Hungary

Budapest Law Firm No. 5000 Oppenheim Szabó, Kelemen & Partners Andersen Attorneys

Real estate

CMS Dentons

DLA Piper Hungary Hegymegi-Barakonyi and Partner Baker & McKenzie Attorneys-at-Law Lakatos, Köves and Partners

Andrékó Ferenczi Kinstellar CERHA HEMPEL Dezső & Partners Oppenheim Szécsényi and Partners

Tax

DLA Piper Hungary Jalsovszky

Hegymegi-Barakonyi and Partner Baker & McKenzie Attorneys-at-Law Vámosi-Nagy Ernst & Young Law Office

CMS Wolf Theiss Budapest

TMT

CMS Dentons Lakatos, Köves and Partners

DLA Piper Hungary VJT & Partners

Siegler Bird & Bird Ügyvédi Iroda Szecskay Attorneys at Law

3

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Budapest Business Journal | June 3 – June 16, 2022

Special Report | 23

LEGAL 500 2022 LEGAL ACTIVITIES

TIER 1

TIER 2

TIER 3

Banking, finance and capital markets

Allen & Overy Kádár Andrékó Ferenczi Kinstellar CMS Dentons DLA Piper Hungary Kapolyi Law Firm Lakatos, Köves and Partners Siegler Bird & Bird Ügyvédi Iroda

Gárdos Mosonyi Tomori Hegymegi-Barakonyi and Partner Baker & McKenzie Attorneys-at-Law Jalsovszky Moore Legal Kovács Noerr Partos & Noblet / Hogan Lovells Schoenherr Hetényi Attorneys at Law Szabó, Kelemen & Partners Andersen Attorneys Szecskay Attorneys at Law Wolf Theiss Budapest

CERHA HEMPEL Dezső & Partners Deloitte Legal Göndöcz and Partners Law Firm ERDŐS | KATONA Ügyvédi Társulás Forgó, Damjanovic & Partners HP Legal | Hajdu & Partners Nagy & Trócsányi Oppenheim Vámosi-Nagy Ernst & Young Law Office

Competition

Andrékó Ferenczi Kinstellar CMS Dentons DLA Piper Hungary Hegymegi-Barakonyi and Partner Baker & McKenzie Attorneys-at-Law Lakatos, Köves and Partners

Allen & Overy Kádár Bassola Law Firm CERHA HEMPEL Dezső & Partners Oppenheim Schoenherr Hetényi Attorneys at Law Szecskay Attorneys at Law

Deloitte Legal Göndöcz and Partners Law Firm Forgó, Damjanovic & Partners KPMG Legal Tóásó Law Firm Partos & Noblet / Hogan Lovells Réti, Várszegi and Partners PwC Legal Siegler Bird & Bird Ügyvédi Iroda Szabó, Kelemen & Partners Andersen Attorneys VJT & Partners

Commercial, Corporate & M&A

Andrékó Ferenczi Kinstellar CMS Dentons DLA Piper Hungary Hegymegi-Barakonyi and Partner Baker & McKenzie Attorneys-at-Law Lakatos, Köves and Partners Oppenheim Siegler Bird & Bird Ügyvédi Iroda

Allen & Overy Kádár Forgó, Damjanovic & Partners Partos & Noblet / Hogan Lovells Schoenherr Hetényi Attorneys at Law Szecskay Attorneys at Law VJT & Partners Wolf Theiss Budapest

CERHA HEMPEL Dezső & Partners Deloitte Legal Göndöcz and Partners Law Firm Jalsovszky Kapolyi Law Firm KPMG Legal Tóásó Law Firm Nagy & Trócsányi Noerr Szabó, Kelemen & Partners Andersen Attorneys

Andrékó Ferenczi Kinstellar CMS

Dentons Lakatos, Köves and Partners Siegler Bird & Bird Ügyvédi Iroda Taylor Wessing Hungary VJT & Partners

CERHA HEMPEL Dezső & Partners DLA Piper Hungary KPMG Legal Tóásó Law Firm Oppenheim Réti, Várszegi and Partners PwC Legal SBGK Attorneys at Law Schoenherr Hetényi Attorneys at Law Wolf Theiss Budapest

CMS DLA Piper Hungary Lakatos, Köves and Partners Nagy & Trócsányi Oppenheim Szecskay Attorneys at Law

Dentons Forgó, Damjanovic & Partners LFB – László Fekete Bagaméry Siegler Bird & Bird Ügyvédi Iroda Wolf Theiss Budapest

Allen & Overy Kádár CERHA HEMPEL Dezső & Partners Gárdos Mosonyi Tomori Hegymegi-Barakonyi and Partner Baker & McKenzie Attorneys-at-Law Kapolyi Law Firm Lohn Law Firm Partos & Noblet / Hogan Lovells Réti, Várszegi and Partners PwC Legal Sándor Szegedi Szent-Ivány Komáromi Eversheds Sutherland Szabó, Kelemen & Partners Andersen Attorneys VJT & Partners

Employment

Hegymegi-Barakonyi and Partner Baker & McKenzie Attorneys-at-Law Szecskay Attorneys at Law VJT & Partners

Andrékó Ferenczi Kinstellar CLV Partners - Csabai & Partners Law Firm CMS DLA Piper Hungary Forgó, Damjanovic & Partners KCG Partners Law Firm Lakatos, Köves and Partners Oppenheim

bnt | attorneys-at-law Noerr Sándor Szegedi Szent-Ivány Komáromi Eversheds Sutherland Schoenherr Hetényi Attorneys at Law Siegler Bird & Bird Ügyvédi Iroda Szabó, Kelemen & Partners Andersen Attorneys TaylorWessing Hungary Vámosi-Nagy Ernst & Young Law Office Wolf Theiss Budapest

Intellectual property

Danubia Legal Oppenheim SBGK Attorneys at Law Siegler Bird & Bird Ügyvédi Iroda Szecskay Attorneys at Law

CMS Hegymegi-Barakonyi and Partner Baker & McKenzie Attorneys-at-Law Lakatos, Köves and Partners

Dentons DLA Piper Hungary

Projects and energy

Andrékó Ferenczi Kinstellar CMS Dentons DLA Piper Hungary Lakatos, Köves and Partners Siegler Bird & Bird Ügyvédi Iroda Wolf Theiss Budapest

Hegymegi-Barakonyi and Partner Baker & McKenzie Attorneys-at-Law Réti, Várszegi and Partners PwC Legal Schoenherr Hetényi Attorneys at Law

Forgó, Damjanovic & Partners HP Legal | Hajdu & Partners KCG Partners Law Firm Oppenheim Szabó, Kelemen & Partners Andersen Attorneys Szecskay Attorneys at Law

Real estate & construction

CMS Dentons Hegymegi-Barakonyi and Partner Baker & McKenzie Attorneys-at-Law Lakatos, Köves and Partners

Andrékó Ferenczi Kinstellar DLA Piper Hungary Kapolyi Law Firm Noerr Oppenheim Partos & Noblet / Hogan Lovells Siegler Bird & Bird Ügyvédi Iroda

CERHA HEMPEL Dezső & Partners Deloitte Legal Göndöcz and Partners Law Firm Jalsovszky KCG Partners Law Firm Lohn Law Firm Schoenherr Hetényi Attorneys at Law Szécsényi and Partners Szabó, Kelemen & Partners Andersen Attorneys Szecskay Attorneys at Law Wolf Theiss Budapest

TMT

CMS DLA Piper Hungary Lakatos, Köves and Partners

Andrékó Ferenczi Kinstellar Dentons Hegymegi-Barakonyi and Partner Baker & McKenzie Attorneys-at-Law Siegler Bird & Bird Ügyvédi Iroda VJT & Partners

Allen & Overy Kádár Forgó, Damjanovic & Partners Partos & Noblet / Hogan Lovells Szecskay Attorneys at Law Wolf Theiss Budapest

Tax

CMS DLA Piper Hungary Hegymegi-Barakonyi and Partner Baker & McKenzie Attorneys-at-Law Jalsovszky Nagy & Trócsányi Vámosi-Nagy Ernst & Young Law Office

Deloitte Legal Göndöcz and Partners Law Firm KCG Partners Law Firm Lakatos, Köves and Partners LFB – László Fekete Bagaméry Réti, Várszegi and Partners PwC Legal Szecskay Attorneys at Law Wolf Theiss Budapest

Data privacy and data protection

Dispute resolution

Opening a business doesn’t make you a businessman.

3

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Budapest Business Journal | June 3 – June 16, 2022

Special Report | 25

Wolf Theiss Advises 4iG on Albanian Acquisitions Wolf Theiss has announced that it advised 4iG Nyrt. on the acquisition, followed by merger clearance, of two important players in the Albanian telecommunications market: ALBtelecom, the largest fixed network operator, and One Communications, one of the two largest mobile telecom operators.

BBJ STAFF

Wolf Theiss acted as legal advisor for the Hungarian IT and technology group in the acquisition of a majority stake of 80.27% in ALBtelecom, the leading landline voice,

internet and TV provider in Albania. The signing took place on Dec. 8, 2021, with the closing approved by the Albanian Competition Authority on March 4.

4iG Nyrt., a company listed on the Hungarian stock exchange, acquired the stake in the Albanian telecom operator from a subsidiary of Calik Holding, one of Turkey’s leading privately held industrial groups. A few weeks later, 4iG also successfully acquired a majority stake

of

99.899%

in One Telecommunications.

Wolf Theiss assisted 4iG Nyrt. with the Albanian regulatory approvals, especially related to the merger clearance. For the successful completion of this regional engagement, the Wolf Theiss team involved in the project was led by Richard Clegg (a corporate/M&A partner), Nako Sokol (a partner in Albania), and Norbert Bálint (a Hungarian counsel specializing in corporate/M&A and capital markets work).

Irina Dekova (a corporate/M&A consultant) and Kristaq Profkola (an associate from Albania) also played an important role in the project team. The core team was further supported by other Wolf Theiss lawyers in Albania, Hungary and

Bulgaria. Istanbul-based law firm Yavuz & Uyanik & Akalin advised on elements of the transaction involving Turkish law.

Complex Transaction

“For such a complex transaction as the acquisition of ALBtelecom, in which a package of contracts and declarations under four different jurisdictions must be in place, you need a really professional team,” commented Csaba Vezekényi, the legal manager of 4iG Nyrt.

“I would like to emphasize my gratitude to the whole team again, not just for the successful closing but for the client-friendly, client-supportive attitude,” he added.

Clegg, from Wolf Theiss, commented: “The clearance of the 4iG-ALBtelecom / One Communications transactions is a landmark case, as it required complex analysis carried out quickly by the

Albanian Competition Authority (ACA), particularly considering the novelty of the case and the market consultation exercise undertaken by the authority.”

He added: “The consolidation from three to two operators resulting from the acquisitions led to an in-depth phase two review of the mergers by ACA and is a precedent-setting case for the telecom sector in the Albanian market.”

Founded in 1957, Wolf Theiss is one of the leading law firms in Central, Eastern, and Southeastern Europe (CEE/SEE). It says it has built its reputation on unrivaled local knowledge supported by strong international capabilities. With more than 360 lawyers in 13 countries, 80% of the firm’s work involves crossborder representation of international clients in Albania, Austria, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Hungary, Poland, Romania, Serbia, Slovakia, Slovenia and Ukraine. The firm says it develops comprehensive and constructive solutions based on legal, fiscal and business know-how.

PRESENTED CONTENT

EU Targets Climate Neutrality With Carbon Duty

By Last summer, the European Commission presented the Fit for 55 climate action package, the main objective of which is to reduce net greenhouse gas emissions within the EU by at least 55% by 2030. An essential part of the package is a unique instrument, a carbon duty, which is expected to be introduced in 2023 according to the draft legislation of the ECOFIN. BENCE BARTA, DIRECTOR OF ANDERSEN ADÓTANÁCSADÓ ZRT.

Every year the EU’s current emission trading system (EU ETS) imposes a higher cost element on industrial activities resulting in carbon dioxide emission, thus making polluting products increasingly expensive. However, this upward price effect is not enforced when these same products are produced by non-EU market players, who gain a clear competitive edge.

To address this situation, ECOFIN, composed of the economics and finance ministers of European Union member states, adopted draft legislation at the beginning of mid-March this year, based on which a carbon duty would be implemented within the EU from 2023.

The measure would levy taxes on imported products based on the carbon footprint of their production. According to this concept, as a first step, imported iron and steel, aluminum products, as well as cement, electricity and fertilizers would be affected, but this list may be extended.

The name “carbon duty” is misleading, as it is more of a hybrid public charge that sits on the borders of a import duty, a tax, and a carbon quota.

The close link with customs is underlined by the fact that the greatest obligations lie at the importer of the said goods and the affected products are listed based on their customs tariff classifications. This is reinforced by the fact that the draft defines the affected range of products based on the CN codes of the tariff classification.

Technically, however, carbon duties cannot be considered customs duty-type items since they are not levied by the customs authority; instead, the importer has to purchase and present the neccessary amount of quota by May 31 of the year following the subject year.

Regulatory logic prefers gradual implementation. In the first two years, EU market players would not yet be obliged to purchase quotas, but the necessary permits would have to be obtained from Jan. 1, 2023. Additionally, regular quarterly declarations would have to be submitted to the authority from that date.

Countries of Origin

The regulation is expected to differentiate between countries of origin. Accordingly, no or a reduced level of obligations will arise if the product is from a country that applies a quota system similar to the EU ETS. At this point, several outstanding points need to be clarified in respect of the implementation of the carbon duty. Some of these are not only of methodological or technical nature but even political or environmental ones.

Looking a little further ahead, the role of the carbon duty in influencing international trade will need to be analyzed in more depth. Several countries have already expressed concerns about the concept, arguing that this measure is more of a tool to protect the EU’s internal market and European producers.

The priority of the environmental objective will also need to be verified to implement the regime and the EU will need to demonstrate that the funds from carbon duty are spent on green investments.

Otherwise, the carbon duty will contradict

the ambitions and operating principles of the World Trade Organisation.

There are also serious debates on the impact of the carbon duty between Hungarian manufacturers and traders as well as players from the processing and construction industries. Will it lead to higher prices for raw materials or, which is more relevant for everybody, will the price of electricity increase?

Until the final answers are given, companies within the EU now have to assess how carbon duty will affect them. Several industries could be directly impacted from the beginning, either through administrative obligations or changes in prices. These include construction, the automotive sector, and energy, though, in some instances, even food production could be affected due to the rise in agricultural input prices.

Companies must examine whether they acquire goods subject to this duty and if so how they intend to comply with the respective provisions, especially the way of obtaining the necessary licenses and fulfilling the quarterly declaration requirements. They will also need to consider how they will obtain the necessary permits by the end of the year and how they intend to fulfill the quarterly declaration requirement.

26 | 3

Special Report

www.bbj.hu

Budapest Business Journal | June 3 – June 16, 2022

Law Firms With International Affiliations

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CMS Cameron McKenna Nabarro Olswang LLP London 1779

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eu

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tax

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legal speCiality aReas no. of paRtneRs of hungaRian offiCe on may 2, 2022

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Rank

Ranked by no. of attorneys with license to practice in Hungary on May 2, 2022

top loCal exeCutive addRess phone email

erika papp 80 1989

1053 Budapest, Károlyi utca 12.

(1) 483-4800 budapest@cms-cmno.com

andrás posztl DLA Piper UK LLP London 2006

90+ 1988

1124 Budapest, Csörsz utca 49–51.

(1) 510-1100 reception.budapest@ dlapiper.com

oppenheim Ügyvédi iRoda www.oppenheimlegal.com 3

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Freshfields Bruckhaus Deringer London 1743

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Infrastructure and project finance, joint ventures and private equity, capital markets, financial restructuring and insolvency, data protection, media law, film finance, AI

Dentons Europe LLP London 2015

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Consumer protection, data protection & GDPR, aviation, investment protection, regulatory, compliance and investigations

Clifford Chance LLP, Multilaw, Interlaw, Association of European Lawyers, Global Leaders Forum – –

dentons RéCziCza laW fiRm www.dentons.com 38

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lakatos, köves és táRsai Ügyvédi iRoda www.lakatoskoves.hu 4

38

14

9

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otheR

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publiC pRoCuRement

intelleCtual pRopeRty

dispute Resolution

CoRpoRate / m&a

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tmt

employment

eu

Competition

eneRgy

banking and finanCe

tax

Real estate

CommeRCial

no. of paRtneRs of hungaRian offiCe on may 2, 2022

no. of tRainees in hungaRy on may 2, 2022

no. of attoRneys With liCense to pRaCtiCe in hungaRy on may 2, 2022

Rank

Company Website

legal speCiality aReas

Special Report | 27 name of assoCiate non-hungaRian laW fiRm oR CoopeRation netWoRk WoRld hQ yeaR established

3

www.bbj.hu

Budapest Business Journal | June 3 – June 16, 2022

top loCal exeCutive addRess phone email

ulrike Rein 30 1989

1053 Budapest, Károlyi utca 12.

(1) 486-2200 office@oppenheimlegal.com

istván Réczicza, gábor király 200+ 2015(1)

1061 Budapest, Andrássy út 11.

(1) 488-5200 budapest@dentons.com

péter lakatos A

1991

note: (1) Dentons (formerly Salans) has been present in Hungary since 2006.

Competition?

No problem.

Oppenheim proudly welcomes István Szatmáry, the new head of Antitrust, Competition and Trade.

1075 Budapest, Madách Imre út 14.

(1) 429-1300 mail@lakatoskoves.hu info@lakatoskoves.hu

www.bbj.hu

✓

Advertising law and consumer protection, capital markets, data protection, restructuring and insolvency

WSG – World Services Group, TerraLex, Legalink, EuroJuris, SCG – State Capital Group, DORDA Best Friends Network, Biolegis, Lexicom, LEGUS, INBLF – –

✓

IT, IP and data protection, tax litigation, pharmaceutical law and health industry, fiduciary asset management, waste management, sport law

PricewaterhouseCoopers Legal LLP London 2006

✓

Acquisition and project finance, data protection, immigration law, restructuring and insolvency, compliance & investigations

Wolf Theiss Rechtsanwälte GmbH Vienna 1957

✓

Capital markets, project finance, employment, international space and air law, healthcare

–

Corporate restructuring and insolvency, gaming and betting, information technology, telecommunications and e-commerce

✓

Tax litigation, legal and financial protection of private wealth, data privacy

szeCskay attoRneys at laW www.szecskay.com 5

35

7

19

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Réti, váRszegi és táRsai Ügyvédi iRoda pWC legal www.retivarszegipartners.hu

33

6

7

Wolf theiss faludi eRős Ügyvédi iRoda www.wolftheiss.com

31

14

9

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4

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győRi és sáRhegyi Ügyvédi táRsulás www.gyoriessarhegyi.hu 30

8

9

7

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szabó, kelemen és táRsai andeRsen Ügyvédi iRoda hu.andersenlegal.com 30

8

5

14

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Bredin Prat Paris 1966

Andersen Global San Francisco 2013

no. of offiCes WoRldWide yeaR hungaRian offiCe established

otheR

life sCienCes

publiC pRoCuRement

intelleCtual pRopeRty

dispute Resolution

CoRpoRate / m&a

enviRonment pRoteCtion

tmt

employment

eu

Competition

eneRgy

banking and finanCe

tax

Real estate

CommeRCial

legal speCiality aReas

name of assoCiate non-hungaRian laW fiRm oR CoopeRation netWoRk WoRld hQ yeaR established

Budapest Business Journal | June 3 – June 16, 2022

no. of paRtneRs of hungaRian offiCe on may 2, 2022

Company Website

no. of tRainees in hungaRy on may 2, 2022

Special Report no. of attoRneys With liCense to pRaCtiCe in hungaRy on may 2, 2022

Rank

28 | 3

top loCal exeCutive addRess phone email

andrás szecskay A

1992

1055 Budapest, Kossuth Lajos tér 16–17.

(1) 472-3000 info@szecskay.com

zoltán várszegi 90 2000

1055 Budapest, Bajcsy-Zsilinszky út 78.

(1) 461-9888 hu_rvp.central@pwc.com

zoltán faludi 13 2007

1085 Budapest, Kálvin tér 12–13.

(1) 484-8800 budapest@wolftheiss.com

zoltán sárhegyi, beatrix bártfai 37 1993

340 1996

1022 Budapest, Árvácska utca 6.

(1) 209-0180 titkarsag@sarhegyi.hu

lászló kelemen, domonkos kiss, tamás szabó, péter vincze 1016 Budapest, Mészáros utca 58/A (1) 288-8200 tamas.szabo@ hu.andersenlegal.com péter göndöcz

9

9

10

deloitte legal göndöCz és táRsai Ügyvédi iRoda www.deloittelegal.hu

siegleR biRd & biRd Ügyvédi iRoda www.twobirds.com

andRékó feRenCzi kinstellaR Ügyvédi iRoda www.kinstellar.com

CeRha hempel dezső és táRsai Ügyvédi iRoda 11 www.cerhahempel.com/hu/offices/ magyarorszag

28

28

24

22

5

14

8

7

5

4

6

10

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Deloitte Legal A A

Bird & Bird LLP London 1846

✓

Data protection, sports

✓

Compliance, risk & sensitive investigations, infrastructure & projects, NPLs & distressed assets, restructuring & insolvency

Kinstellar – 2008

✓

State aid, data protection, project financing, restructuring and insolvency

CERHA HEMPEL Rechtsanwälte GmbH Vienna 1921

153 2009

30 2008

1068 Budapest, Dózsa György út 84/C (1) 428-6800 cehudeloitteinhungary@ deloittece.com pál szabó, bálint halász, lászló nanyista 1027 Budapest, Kapás utca 6–12.

(1) 301-8900 budapest@twobirds.com kristóf ferenczi

12 2000

1054 Budapest, Széchenyi rakpart 3.

(1) 428-4400 budapest.reception@ kinstellar.com tamás polauf, Wilhelm stettner

7 1998

1011 Budapest, Fő utca 14–18.

(1) 457-8040 office@cerhahempel.hu

hegymegi-baRakonyi és táRsa bakeR & mCkenzie Ügyvédi iRoda www.bakermckenzie.com/en/ locations/emea/hungary

22

19

8

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Data protection, cyber law, consumer protection, corporate compliance, capital markets, financial regulatory, project finance, restructuring, insolvency

✓

Litigation, arbitration & Noerr PartnerADR, data protection/ schaftsgesellschaft GDPR, state aid, mbH restructuring & Munich insolvency 1950

noerr és táRsai iRoda www.noerr.com 22

11

4

4

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opl gunnercooke www.opl.hu

sChönheRR hetényi 13 Ügyvédi iRoda www.schoenherr.eu

top loCal exeCutive addRess phone email

zoltán hegymegi-barakonyi Baker & McKenzie LLP Chicago 1949

77 1987

1051 Budapest, Dorottya utca 6.

(1) 302-3330 budapest.reception@ bakermckenzie.com

zoltán nádasdy 15 1990

1011 Budapest, Fő utca 14–18.

(1) 224-0900 recepcio@noerr.com

miklós orbán 20

12

no. of offiCes WoRldWide yeaR hungaRian offiCe established

otheR

life sCienCes

publiC pRoCuRement

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CoRpoRate / m&a

enviRonment pRoteCtion

tmt

employment

eu

Competition

eneRgy

banking and finanCe

tax

Real estate

CommeRCial

no. of paRtneRs of hungaRian offiCe on may 2, 2022

no. of tRainees in hungaRy on may 2, 2022

no. of attoRneys With liCense to pRaCtiCe in hungaRy on may 2, 2022

Rank 11

Company Website

legal speCiality aReas

Special Report | 29 name of assoCiate non-hungaRian laW fiRm oR CoopeRation netWoRk WoRld hQ yeaR established

3

www.bbj.hu

Budapest Business Journal | June 3 – June 16, 2022

19

6

9

3

3

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Legal tech, public policy, privacy

gunnercooke London 2010

✓

Compliance, white collar crime, regulatory, data protection, insolvency and restructuring

Schönherr Rechtsanwälte GmbH Vienna 1950

13 2011

1036 Budapest, Perc utca 6.

(1) 769-1163 office@opl.hu kinga hetényi

15 2008

1133 Budapest, Váci út 76.

(1) 870-0700 office.hungary@ schoenherr.eu

Telework is Here to Stay According to New Rules The amendment of the Labor Code will come into force after the end of the state of emergency, expectedly on 1 June 2022.

The amendment means to codify the rules of telework that have been in force during the state of emergency.

For companies who have regulated telework under the current legislation, the entry into force of the amendments will not be a novelty. For others, the new rules will create obligations and opportunities if they want to adapt their employment relations to the new world of teleworking or hybrid working methods, which for sure will be the future trend of the labor market.

Under the new regulations, telework means all work performed by an employee remotely regardless of its duration and the parties may agree on remote work in any position where off-site work is possible.

The parties must agree on telework in their employment contract. The Labor Code stipulates certain provisions applicable to remote work in case the parties’ agreement does not address those questions.

However, the parties may derogate from these provisions by mutual consent. The most important of these is the possibility to agree on complete or partial remote work. Unless otherwise agreed by the parties, in the case of telework, the employee may and

may be required to work no more than one-third of the working days in a calendar year at the site of the employer, and may or may be required to work at home or in another place away from the employer’s site at least two-thirds of the working days in a calendar year.

If the parties intend to determine the ratio of remote work differently, they must agree on that.

The parties may agree on a monthly flat rate to cover the employee’s expenses. An amount up to the amount specified by the parties, but no more than 10 percent of the minimum monthly wage (HUF 20,000 per month in 2022) or a part of this amount in proportion to the remote working days, can be recognized as a tax expense without invoices.

The employer is obliged to provide the equipment necessary for telework, but the equipment may be provided by the employee as well, subject to an agreement with the employer. As regards such work equipment, the employer must conduct risk assessments to ascertain whether it is in a safe state.

Employers may want to exclude working from abroad or, if they allow it, the related conditions should be agreed thoroughly as the time spent working outside Hungary may have an effect on the employee’s tax and social security status, and also raises the applicability of foreign law.

Simultaneously with the amendment of the Labor Code, the relevant labor safety and taxation rules will also be amended. In the event of a work-related accident at home, an important factor in assessing the employer’s responsibility is if it has taken all reasonable steps to prevent the accident from occurring. Although it is not mandatory anymore, it’s highly recommended to carry out a risk assessment of an employee’s home office.

Risk assessment of the home workplace can be carried out by using a webcam or photos sent by the employee and a questionnaire, which the employer or health and safety professional can use to assess whether the remote workplace is safe.

The Labor Code provides contractual freedom to the parties regarding telework. As a result of this, it is worth agreeing on all relevant matters and regulating issues that do not require the employees’ consent in internal policies.

Nóra Óváry-Papp

Lead Attorney, Employment & Compensation, Hegymegi-Barakonyi and Partner Baker & McKenzie Attorney-at-Law

vámosi-nagy eRnst & young 13 Ügyvédi iRoda www.eylaw.hu

19

15

www.bbj.hu

3

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Ernst & Young Law GmbH Stuttgart, Germany 2002

–

–

International Lawyers Network Westwood, USA 1988

✓

Joint venture dispute resolution, compliance, bankruptcy and liquidation procedures, complex problem solution, legal application of innovative technology solutions, data privacy

KPMG Legal /Law – –

–

Lex Mundi / Yingke International Houston, USA / Beijing, China 1989/2001

Data protection, private wealth

bpv LEGAL, bpv HÜGEL, bpv BRAUN PARTNERS, bpv GRIGORESCU & STEFANICA Vienna, Brussels, Prague, Bratislava, Bucharest 2007

✓

Data protection

AIPEX Munich 2010

✓

Immigration, data protection, regulatory compliance, administrative law

Eversheds Sutherland London (UK), Atlanta (USA) 1988 (UK), 1924 (USA)

✓

Pharmaceutical law, data protection and privacy, cyber security

Conference Bleue/ Global Business Lawyers Alliance Brussels/Paris 1996/2016

–

Insurance law, transportation law, capital markets

ADVOC London 1990

✓

no. of offiCes WoRldWide yeaR hungaRian offiCe established

otheR

life sCienCes

publiC pRoCuRement

intelleCtual pRopeRty

dispute Resolution

CoRpoRate / m&a

enviRonment pRoteCtion

tmt

employment

eu

Competition

eneRgy

banking and finanCe

tax

Real estate

CommeRCial

legal speCiality aReas

name of assoCiate non-hungaRian laW fiRm oR CoopeRation netWoRk WoRld hQ yeaR established

Budapest Business Journal | June 3 – June 16, 2022

no. of paRtneRs of hungaRian offiCe on may 2, 2022

Company Website

no. of tRainees in hungaRy on may 2, 2022

Special Report no. of attoRneys With liCense to pRaCtiCe in hungaRy on may 2, 2022

Rank

30 | 3

16

9

3

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kpmg legal tóásó Ügyvédi iRoda https://home.kpmg/hu/hu/home/ services/tax/legal-services.html 16

14

14

nagy & tRóCsányi Ügyvédi iRoda www.nt.hu

16

11

4

1

8

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bpv Jádi németh Ügyvédi iRoda www.bpv-jadi.com 15

15

5

5

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90 2010

91 2005

15

16

knp laW nagy-koppany és lenCs laW offiCe www.knplaw.com

1124 Budapest, Csörsz utca 41.

(1) 889-2800 office@jalsovszky.com

bálint tóásó 81 2006

1134 Budapest, Váci út 31.

(1) 887-7100 info@kpmg.hu

péter berethalmi 282/83 1991

1126 Budapest, Ugocsa utca 4/B (1) 487-8701 budapest_office@nt.hu

andrea Jádi németh 8 2000

1051 Budapest, Szent István tér 11.

(1) 429-4000 budapest@bpv-jadi.com

katalin szamosi 15

sándoR szegedi szent-ivány komáRomi eveRsheds sutheRland Ügyvédi iRoda www.eversheds-sutherland.hu

1132 Budapest, Váci út 20.

(1) 451-8100 law@hu.ey.com

pál Jalsovszky

sbgk Ügyvédi iRoda www.sbgk.hu 15

addRess phone email

iván sefer

Jalsovszky www.jalsovszky.com 14

top loCal exeCutive

15

14

5

3

6

12

8

5

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A

1969

1062 Budapest, Andrássy út 113.

(1) 461-1000 mailbox@sbgk.hu

ágnes szent-ivány 70 1987/ 1999

1037 Budapest, Montevideo utca 10.

(1) 394-3121 office@ eversheds-sutherland.hu

kornelia nagy-koppany lászló lencs 28/39 2007

1011 Budapest, Hunyadi János út 20.

(1) 302-9050 knplaw@knplaw.com

erika tomori gáRdos mosonyi tomoRi 17 Ügyvédi iRoda www.gmtlegal.hu

13

6

9

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94 1992

1056 Budapest, Váci utca 81.

(1) 327-7560 postmaster@gmtlegal.hu

paRtos & noblet in Co-opeRation With hogan 17 lovells inteRnational llp www.hoganlovells.com

18

bnt Ügyvédi iRoda www.bnt.eu

13

12

1

3

3

9

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Data processing & privacy, compliance, pharma, insolvency and restructuring

bnt – –

–

–

IBLC (International Business Law Consortium) Salzburg 1998

✓

Forensic, white collar crime, hotels&leisure, solar projects, industrial property, zoning, data protection, sports and arbitration

World Link for Law Zurich 1989

–

–

PONTES: the CEE lawyers – 2005

–

Compliance, data protection, IT, greenfield investments, corporate acquisition

Rödl & Partner GbR Wirtschaftsprüfer, Steuerberater, Rechtsanwälte Nuremberg 1977

–

Capital markets

My Legal Network Warsaw 2020

5 1999

–

Bankruptcy, telecommunication, sports

Norton Rose Fulbright LLP London 1794

More than 50 1989

Data protection and GDPR

BSLAW Brussels Brussels 2021

lohn Ügyvédi iRoda www.lohn.hu 12

18

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5

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52 2006

12

sáRközy Rödl & paRtneR Ügyvédi iRoda, Rödl & paRtneR Ügyvédi táRsulás 18 www.roedl.de

12

1

2

3

2

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addRess phone email

1051 Budapest, Vörösmarty tér 7/8.

(1) 505-4480 office@hoganlovellls.co.hu éva Ratatics, Rainer tom

12 2003

1143 Budapest, Stefánia út 101–103.

(1) 413-3400 info.hu@bnt.eu

János Rausch 83 1997

1051 Budapest, József nádor tér 5–6.

(1) 266-3522 office@bansszabo.hu

balázs lohn 80 2008

pontes budapest Ügyvédi iRoda www.ponteslegal.eu 18

top loCal exeCutive

lászló partos Jnr.

Capital markets, data protection, compliance

bán, s. szabó, RausCh & paRtneRs Ügyvédi iRoda www.bansszabo.hu 18

Hogan Lovells International LLP London, Washington Legacy Lovells: 1899 Legacy Hogan & Hartson: 1904

no. of offiCes WoRldWide yeaR hungaRian offiCe established

otheR

life sCienCes

publiC pRoCuRement

intelleCtual pRopeRty

dispute Resolution

CoRpoRate / m&a

enviRonment pRoteCtion

tmt

employment

eu

Competition

eneRgy

banking and finanCe

tax

Real estate

CommeRCial

no. of paRtneRs of hungaRian offiCe on may 2, 2022

no. of tRainees in hungaRy on may 2, 2022

no. of attoRneys With liCense to pRaCtiCe in hungaRy on may 2, 2022

Rank

Company Website

legal speCiality aReas

Special Report | 31 name of assoCiate non-hungaRian laW fiRm oR CoopeRation netWoRk WoRld hQ yeaR established

3

www.bbj.hu

Budapest Business Journal | June 3 – June 16, 2022

1053 Budapest, Károlyi utca 12.

(1) 999-1233 info@lohn.hu

Csaba polgár 7 2005

1011 Budapest, Szilágyi Dezső tér 1.

(1) 799-8330 admin@hunlaw.hu

sándor sárközy, stefan sieferer 107 1992

1062 Budapest, Andrássy út 121.

(1) 814-9880 budapest@roedl.com

József kapolyi 19

kapolyi laW fiRm www.kapolyi.com

11

6

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bpss Ügyvédi iRoda www.bpss.hu 10

20

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gergely stanka

bslaW budapest boCsák & szuChy Ügyvédi táRsulás www.bslaw.hu 20

1051 Budapest, József nádor tér 5–6.

(1) 267-3975 info@kapolyi.com

1013 Budapest, Pauler utca 11.

(1) 354-4300 office@bpss.hu

Róbert szuchy 10

2

3

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–

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2 2010

1054 Budapest, Aulich utca 8.

(1) 700-1035 office@bslaw.hu

www.bbj.hu

no. of offiCes WoRldWide yeaR hungaRian offiCe established

otheR

life sCienCes

publiC pRoCuRement

intelleCtual pRopeRty

dispute Resolution

CoRpoRate / m&a

enviRonment pRoteCtion

tmt

employment

eu

Competition

eneRgy

banking and finanCe

tax

Real estate

CommeRCial

legal speCiality aReas

name of assoCiate non-hungaRian laW fiRm oR CoopeRation netWoRk WoRld hQ yeaR established

Budapest Business Journal | June 3 – June 16, 2022

no. of paRtneRs of hungaRian offiCe on may 2, 2022

Company Website

no. of tRainees in hungaRy on may 2, 2022

Special Report no. of attoRneys With liCense to pRaCtiCe in hungaRy on may 2, 2022

Rank

32 | 3

kCg paRtneRs Ügyvédi táRsulás www.kcgpartners.com 20

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Projects, construction, wealth management

Ally Law London 1990

72 2014

1054 Budapest, Széchenyi rakpart 8.

(1) 301-3130 reception@kcgpartners.com

márton kovács 10

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1

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Hotel law, capital markets law

Rsm legal | szűCs & paRtneRs attoRneys-at-laW www.rsmlegal.hu/hu

Moore Legal London A

32 2016

1082 Budapest, Kálvin tér 12.

Baross szárny, IV. emelet (1) 610-4440 office@moorelegal.hu

bálint szűcs 10

20

addRess phone email

eszter kamocsay-berta 10

mooRe legal kováCs Ügyvédi iRoda www.mooreglobal.hu/szolgaltatasok/ 20 moore-legal-hungary

top loCal exeCutive

3

2

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RSM Legal Group London 2018

16 2006

1139 Budapest, Lomb utca 30–32.

(1) 576 1234 info@rsmlegal.hu

torsten braner bRaneR és táRsai Ügyvédi iRoda 21 (tayloR Wessing) www.taylorwessing.com

21

21

desseWffy, dávid, felsmann valamint táRsaik Cee attoRneys Ügyvédi iRoda www.dessewffy.com

fest és táRsa Ügyvédi iRoda www.festandpartner.hu

9

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9

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3

5

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2

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Data protection, insolvency and restructuring

–

Energy law, real estate transaction & investment advisory, VAT advisory and tax representation services, compliance, public law

CEE Attorneys Prague 2015

✓

Aviation law, data protection, compliance, consumer protection

LUTHER Rechtsanwaltsgesellschaft mbH Cologne 1992

20 2014

–

The Harmonie Group, World IT Lawyers ICC FraudNet Minneapolis, USA (The Harmonie Group) 1992

92 (The Harmonie Group) 2000

–

–

Conybeare Solicitors, Gowling WLG, Berwin Leighton Paisner London 1997/2016/2001

✓

English law banking and finance, international capital markets, regulatory

foRgó, damJanoviC és táRsai Ügyvédi iRoda www.fdlaw.hu 9

21

hp legal | haJdu & paRtneRs | 21 laW fiRm www.hplegal.eu

22

allen & oveRy kádáR Ügyvédi iRoda www.allenovery.com

9

3

2

5

3

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TaylorWessing LLP London 2002

✓

✓

29 1995

alice dessewffy 13 1992

1125 Budapest, Lóránt út 1/B (1) 413-3340 budapest@ ceeattorneys.com attila fest 1054 Budapest, Báthory utca 8. 1/6 (1) 791-7060 office@festandpartner.hu zoltán forgó, gábor damjanovic 1123 Budapest, Alkotás utca 17–19.

(1) 214-0080 office@fdlaw.hu

lászló hajdu 1/19/32 2008

1013 Budapest, Pauler utca 11.

(1) 799-8230 office@hplegal.eu miklós kádár

8

3

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–

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Allen & Overy LLP London 1930

42 1993

act bán & kaRika

Ügyvédi táRsulás www.actlegal-bk.com

23

1051 Budapest, Dorottya utca 1.

(1) 327-0407 budapest@ taylorwessing.com

7

3

3

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–

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Data protection and GDPR, compliance

Frankfurt am Main Frankfurt 2017

1075 Budapest, Madách Imre út 13–14.

(1) 483-2200 marketing_budapest@ allenovery.com

gergely bán, márton karika 9 2010

1117 Budapest, Alíz utca 1. building A (1) 501-5360 budapest@actlegal-bk.com

danubia legal www.danubia.hu

6

2

6

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EPLAW Brussels 2001

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Agricultural law, administrative law, civil law, brankruptcy law, criminal law

BGS, AIGLI, Aubin Gonzalez Lapos, Avv. Daniela Subani, UAE – –

–

TELFA (Trans European Law Firms Alliance) Brussels 1990

–

–

Lawyers Cooperation Leusden, the Netherlands 2013

✓

Joint ventures and private equity, fintech, insurance law, data protection & GDPR, restructuring and insolvency

LEInterrnational London 1997

laJos Ügyvédi iRoda www.studiolegale.hu 6

24

5

3

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bihaRy balassa Ügyvédi iRoda www.biharybalassa.hu 5

25

1

2

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nyiRi Ügyvédi iRoda www.nyirilaw.hu 5

25

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RáCz laW fiRm www.raczlawfirm.hu

5

25

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1

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no. of offiCes WoRldWide yeaR hungaRian offiCe established

otheR

life sCienCes

publiC pRoCuRement

intelleCtual pRopeRty

dispute Resolution

CoRpoRate / m&a

enviRonment pRoteCtion

tmt

employment

eu

Competition

eneRgy

banking and finanCe

tax

Real estate

CommeRCial

no. of paRtneRs of hungaRian offiCe on may 2, 2022

no. of tRainees in hungaRy on may 2, 2022

no. of attoRneys With liCense to pRaCtiCe in hungaRy on may 2, 2022

Rank 24

Company Website

legal speCiality aReas

Special Report | 33 name of assoCiate non-hungaRian laW fiRm oR CoopeRation netWoRk WoRld hQ yeaR established

3

www.bbj.hu

Budapest Business Journal | June 3 – June 16, 2022

5

salló Ügyvédi iRoda– paRtneR studio legale 26 de Capoa www.decapoa.com/it/contact.php

sQuaRRa & paRtneRs 26 Ügyvédi iRoda www.squarra.hu

peteRka & paRtneRs iRoda 27 www.peterkapartners.com/en/local/ budapest/

A = would not disclose,

NR = not ranked, NA = not appliacable

4

4

3

1

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1

3

2

4

3

1

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A

1998

–

–

✓

Visegrad + Legal Budapest 2017

–

–

Studio Legale de Capoa e Associati Bologna, Italy 1986

–

IT law and e-commerce, bankruptcy and insolvence law, debt management, construction law, gambling law

Warwick Legal International Network / Asea Legal Alliance Canterbury, UK/Singapore 2001/2015

Data protection

Peterka & Partners advokátní kancelář s.r.o.

Prague 2000

✓

1051 Budapest, Bajcsy-Zsilinszky út 16.

(1) 411-8875 office@danubialegal.hu

levente lajos A

1997

1056 Budaoest, Váci utca 81.

(1) 331-6171 l.lajos@llf.hu

tibor bihary 26 2002

1121 Budapest, Zugligeti út 3.

(1) 391-4491 office@biharybalassa.hu

Csaba nyiri 18 2013

1126 Budapest, Kiss János altábornagy utca 11.

(1) 397-7447 info@nyirilaw.hu

zoltán Rácz

GDPR, immigration

✓

addRess phone email

Judit lantos, eszter szakács

32 2008

visegRad legal illés & németh Ügyvédi táRsulás www.visegradlegal.hu 25

top loCal exeCutive

1051 Budapest, Arany János utca 16.

(1) 792-2274 office@raczlawfirm.hu

ádám illés, József németh 9 2017

1052 Budapest, Galamb utca 3.

(1) 792-6744 office@visegradlegal.hu

krisztina salló 8 2000

1055 Budapest, Honvéd utca 38. 4/7.

(1) 331-0311 sallo.decapoa@gmail.com

thomas a. squarra 48/19 1997

1016 Budapest, Avar utca 8.

(1) 474-2082 info@squarra.hu

andrás Csáka-Csehó 8 2013

1051 Budapest, Vörösmarty tér 4.

(1) 235-1090 reception@peterkapartners.hu

This list was compiled from responses to questionnaires received by June 1, 2022, and publicly available data. To the best of the Budapest Business Journal’s knowledge, the information is accurate as of press time.

The list is based on companies’ voluntary data submissions. While every effort is made to ensure accuracy and thoroughness, omissions and typographical errors may occur. Additions or corrections to the list should be sent on letterhead to the research department, Budapest Business Journal, 1075 Budapest, Madách Imre út 13–14, or faxed to (1) 398-0345. The research department can be contacted at research@bbj.hu

4

www.bbj.hu

Budapest Business Journal | June 3 – June 16, 2022

Socialite

Looking Forward to Saucerful of Secrets at Budapest Park

On May 30, Saucerful of Secrets was due to play Budapest Park.

Formed in 2018 purely to perform Pink Floyd’s early music, Saucerful of Secrets brings the band’s pre“Dark Side of the Moon” material to an audience who, unless they’re of a certain vintage, won’t have heard it performed live.

DAVID HOLZER

The band made its debut in May 2018 at Dingwalls, London. A 2020 European tour was planned, but then postponed due to the pandemic.

Saucerful of Secrets concentrates on the more atmospheric, peculiar material Pink Floyd recorded, including out-there numbers like “Set the Controls for the Heart of the Sun” and the utterly lunatic “Bike.”

These were originally recorded with the creative leader and psychedelic genius Syd Barrett, who was on

the

1968

Floyd album for which the band is named, but by that time, his mental illness and horrendous LSD consumption were sending him further and further off the rails.

Saucerful of Secrets’ swirling, knowingly retro, psychedelic light show looks fabulous and should work well in Budapest Park, an outdoor venue.

Pink Floyd drummer Nick Mason in action at the Royal Albert Hall, London. Photo by Will Ireland.

But this isn’t a tribute band. Saucerful of Secrets is led from the back by veteran Pink Floyd drummer Nick Mason and named for his favorite album, recorded in 1968. He has said, “I think there are ideas contained there that we have continued to use all the way through our career. I think [it] was a quite good way of marking Syd’s departure and Dave [Gilmour]’s arrival.

It’s rather nice to have it on one record, where you get both things. It’s a crossfade rather than a cut.”

Mason’s bandmates are Gary Kemp on guitar and vocals, Guy Pratt on bass and Dom Beken on keyboards.

Full-on Fan

The inclusion of Kemp, formerly of Spandau Ballet, is not as odd as I initially thought. He’s a full-on Floyd fan and, according to writeups I’ve read, acquits himself more than well.

As John Lewis of U.K. music mag Uncut wrote in a review of Saucerful of Secrets at the Royal Albert Hall, London, on April 23, “Kemp […] gets to explore areas of his musicianship that even the most fanatical Spandau Ballet fan will not be aware of.”

Kemp shares vocal chores – I’ve always wanted to write this staple phrase of 1970s rock critics – with bass player Pratt. He is a session bass player whose 30-year career has seen him playing with artists that include Roxy Music, Michael Jackson, and Iggy Pop, as well as the Floyd.

it’s reasonably priced. The cheapest tickets are around USD 40. That’s satisfyingly cheap for a reasonably bigname act. Especially as ticket prices for shows by Mason’s contemporaries are skyrocketing this summer.

To give you one eyewatering example, the cheapest tickets to see the Rolling Stones in Vienna on July 15 are

around

USD 235.

And that’s to stand.

Now, I’m sure a promoter or band member could give me a vaguely plausible explanation for why ticket prices have gone up so much.

But, frankly, I don’t care. From where I’m standing, several miles away from the stage, bands like the Rolling Stones and their management, who have more money than they’ll ever need, should put their fans first.

But I started listening to music when bands at least pretended to have a conscience, so maybe I’m just a romantic old fool.

“Many of us will have seen several incarnations of Pink Floyd over the last 40 years – the official Gilmour/Mason brand, Waters’ themed shows, Gilmour’s solo tours, or even tribute bands like the Australian Pink Floyd – but this is definitely more fun than any of them.”

Keyboard player and vocalist Beken is quite the wild card. His background is primarily in composing, playing and producing music for video games, film And there is a bright side to all and TV, and music videos. He doesn’t these wizened old men pricing appear to have played in any name themselves out of my market. To get bands other than Saucerful of Secrets. our live music fix, people like me who By all accounts, it’s Mason who drives have previously had next to no interest the band. In Pink Floyd itself, to me at in new music will be obliged to head least, Mason always came across as the least charismatic and intriguing member. for smaller venues to see bands we’ve never heard of.

Especially when you remember that his This could spark the musical revolution bandmates, the late Syd Barrett, David those of us who had our lives changed Gilmour, and Roger Waters, are all highly charismatic, driven artists in their by punk have been hoping for.

In the meantime, I suggest you own very different ways. snap up a ticket for Saucerful of This is why it feels admirable that Mason Secrets at Budapest Park while you is keeping the flame of the early Pink Floyd alive, especially as he doesn’t need still can. As John Lewis wrote: “Many of us will have seen several the money. Those of you who, like me, incarnations of Pink Floyd over the are sneakily curious as to the financial last 40 years – the official Gilmour/ status of our rock dinosaurs might like Mason brand, Waters’ themed to know that Mason is said to be worth shows, Gilmour’s solo tours, or even tribute bands like the Australian Pink Floyd – but this is definitely Which makes it somehow all the more more fun than any of them.” laudable that Saucerful of Secrets exists.

As Mason told the audience at the April 23 Royal Albert Hall show, Buy a ticket at www.

“It’s a bit surreal having to tell my budapestpark.hu. For an idea grandchildren that I’m going on tour.” of what Saucerful of Secrets sounds like, check out their Reasonably Priced Live at the Roundhouse Speaking of the net worth of rock concert video on YouTube. and rollers, another good thing about the show at Budapest Park is that

USD 180 million.

4

www.bbj.hu

Budapest Business Journal | June 3 – June 16, 2022

Socialite | 35

Furmint Facts and Thrills From the Grand Tasting The main centerpiece tasting of Furmint February, which was postponed once again this year due to COVID, was transformed into the Furmint Nagykóstoló [Grand Tasting] 2022 and held at the beautifully restored Hagyományok Háza on Corvin tér in Buda’s District I, on May 19.

ROBERT SMYTH

This was the building where I learned my first Hungarian words and taught English back in the early-mid 1990s.

Back then, like the building itself, which oozed faded Old World charm but had seen better days, Hungarian wine was down and trying to pick itself up after decades of the communist system’s quantity-over-quality approach and other historical shocks. In the years since, Hungarian wine has been transformed and hit new heights, with Furmint very much to the fore.

Hagyományok Háza, or the House of Traditions in English, provided the ideal setting to showcase the Furmint grape, which has come on leaps and bounds in recent years. It has only really been made as a high-end dry wine in its principal region of Tokaj-Hegyalja for just over two decades.

“I’ve not had a bad wine,” uttered one of my wine writing colleagues, and I agreed with him. I recall early Furmint February events being a bout of palate pugilism against searing acidity, high alcohol, and overuse of oak in an attempt to dig out a few gems. Now, it was one good to great wine after another.

Furmint fanatic and winemaker Zoltán Szabó, who earlier worked at the Research Institute of Viticulture and Enology of the University of Pécs, and has his own bijou winery in the Pécs wine region, revealed some interesting Furmint-related stats in a presentation at a pre-tasting for the press.

Exterior of the Heritage House, the former Budai Vigadó in Budapest. Photo by Botond Horvath / Shutterstock.com While the grape variety is present in other countries in the region, Hungary leads the way with 3,605 hectares (8,908 acres) of Furmint planted, followed by Slovenia (694 ha/1,715 ac), Croatia (422 ha/1,043 ac), Slovakia (310 ha/766 ac), Austria (26 ha/64 ac), Serbia (less than 10 ha/24 ac) and South Africa (4 ha/ 10 ac), with Romania, Moldova, the United States and, topically, the Crimea region having negligible amounts.

Frenzied Popularity

Within Hungary, Tokaj-Hegyalja has by far the largest area of Furmint under vine with 3,424.4 ha (8,462 ac), followed by Somló with 72.7 ha (180 ac), according to Szabó’s research. Furmint is now made in

“The ceramic egg gives both the benefits of oak and tank, without the negative sides.” many Hungarian regions, as growers have planted it as frenzied popularity has gathered, both on the part of consumers and winemakers who love to work with it. In many cases, the grape has been re-introduced to regions where it used to thrive in the period before the phylloxera louse devastated the vineyards of Europe in the late 19th century.

The Furmint grape used to be called Szigeti around Lake Balaton, where it is also making a strong comeback. According to Szabó, the region with the third-highest amount of Furmint is BalatonfüredCsopak at 28 ha, with the fourth-

biggest planting further west on the northern shore at Badacsony with 21.98 ha.

Eger in the northeast of Hungary has the fifth largest plantings at 10.9 ha, then it’s back to Lake Balaton for the sixth and seventh largest: Balaton felvidék (9.61 ha), on the northern side; and Balatonboglár on the southern side.

Szabó makes his own rich, structured Furmint in the Pécs region, where he cultivates 800 vines. He estimates that there is 2.4 ha of Furmint in his area.

The volcanic soils of Tokaj-Hegyalja and Somló are the source of really complex Furmints that can differ quite substantially from one vineyard to the next due to the relatively neutral grape’s ability to capture the nuances of individual sites. But equally fabulous Furmints also come from a range of other soils.

The loess soils on the slopes of Tokaj Hill are the source of refined, elegant, and varietally-pure Furmints, such as those made by French winemaker Stéphanie Berecz at the Kikelet winery in Tarcal.

There are also loess soils on the south side of Lake Balaton in the Balatonboglár wine region, where Késa Birtok’s Bori Konyári (daughter of the late János Konyári) makes a ripe, round, fruitforward Furmint with a tropical touch that brilliantly captures the essence of the sunny southern shore.

Késa’s Furmint vines were planted from cuttings selected from the vineyard of Tokaj legend István Szepsy.

The 2020 Késa costs HUF 3,500 from Kesabirtok.hu.

Organic Furmint

On the other side of the lake in Csopak, the organic Szent Donát winery decided to plant Furmint in the marl (márga in Hungarian) and limestone soils up the hill rather than in Permian red sandstone

next to the lake, which instead favors the region’s trademark Olaszrizling grape.

Szent Donát winemaker Tamás Kovács ferments and ages the family winery’s Furmint in ceramic eggs, which enables the developing wine to get oxygen through the porous material, which gives the wine structure and complexity. These vessels are neutral and impart no direct influence on the flavor of the wine, unlike oak.

“The ceramic egg gives both the benefits of oak and tank, without the negative sides,” Kovács told the Budapest Business Journal. The adverse effects in this case being the undesired buttery, vanilla character of the oak and the lack of oxygen in a sealed tank.

The Furmint in question, Márga 2020, comes from the Szitahegy, Nagykút, and Hegyalja vineyards, located just below the winery and restaurant. It has delicious lime, pineapple, Williams pear, and quince (a classic Furmint note) on the nose and palate, with a creamy texture from keeping it on the lees. It costs HUF 4,000 HUF www.stdonat.hu.

The Kovács Nimród winery in Eger has its Furmint growing at 350 meters above sea level on the Triassic-age limestone and marl of the steep NagyEged Hill that sits imperiously looking down on the city of Eger. The wine was fermented in stainless steel tanks, then aged in oak barrels for five months on its lees, which were stirred for two of those five months to bring creamy complexity.

It is full-bodied, with aromas and flavors of lemon peel, wet stones, barley, and quince, with 15.5% alcohol. It costs HUF 7,380 from wineloverswebshop.hu.

From the same hill, the St. Andrea winery decided to blend its Furmint with Chardonnay in a 40-60 ratio in 2018 to a stunning effect reminiscent of fine white Burgundy. It was fermented and aged in new oak barrels for 14 months and cost HUF 13,200 from Bortársaság.