The Government has approved the report on progress in the fight against so-called pocket contracts – illegal land purchase agreements – and on the work and achievements to date of the Inter-ministerial Committee set up this March. Communiqué.

With reference to the Report, it is especially important to stress that according to currently valid Hungarian law, legal acts that fall within the conceptual scope of pocket contracts are null and void.

The Report provides detailed information on the activities of the Ministry of Rural Development and the Inter-ministerial Committee set up in late March, as well as listing those government measures that the cabinet introduced after gaining office to combat the illegal acquisition of farmland, including amongst others extra funding for national park directorates to enable them to perform expropriations, or the inclusion of the criminal consequences of pocket contracts within the law. It covers all issues of civil and public law that have been discussed at the Committee's meetings and in which the body has achieved significant progress.

It should be noted that the additional funding provided to national park directorates for expropriation purposes was some HUF 1.1.bn, of which the principally affected Őrség National Park received over HUF 500 million.

It should also be stressed that the regulation of pocket contracts by criminal law will come into effect on July 1, 2013. Until that time those involved may freely reveal any such agreements they have made without fear of legal repercussions, but those involved in such illegal contract may face up to 5 years in prison following the deadline. However, the social interest related to such contracts coming to light is greater than that related to the punishment of those involved, so the voluntary revealing of such transactions prior to their being discovered by the authorities will bear with it the possibility of the unrestricted reduction of the related sentence during the course of proceedings.

The Report also provides the Government with information regarding legal problems that have arisen with regard to the elimination of pocket contracts, and which require solutions, as well as on what government action may be required in future, in addition to delineating the relevant stipulations of the Land Trade Act proposal brought before Parliament in July 2012, with special attention to the main characteristics of the official licensing system designed to filter out illegal transactions.

Since the formation of the Government of National Cooperation, one of its fundamental goals has been to keep Hungarian farmland – which forms the basis of our sovereignty – under national jurisdiction, and the elaboration of the legal and regulatory environment this requires. This includes the Land Trade Act proposal, which is the first element of the land regulation package, and the work of the Inter-governmental Committee that coordinates strict government action to combat illegal land purchase agreements.

(Ministry of Rural Development)