Privatization and Protection of the Environment

The new Environmental Protection Act ("Act") of Hungary enters into effect in December 1995. The Act along with the new Privatization Act of Hungary which entered into effect in June of this year, provide a brand new framework for the protection of the environment generally and during the privatization process specifically.

Although environmental audits have become more wide spread during the course of the privatization process, with cautious foreign investors testing the limits of their financial liability and trying to have the State Property Agency (now APV Rt) undertake liability for existing environmental damages, it was the new Privatization Act which actually made the conduct of such audit compulsory prior to the sale of state owned assets. Accordingly, investors now are put on notice of the lurking environmental dangers by the tender documents themselves and one of the criteria considered by APV Rt upon determining the winner of the bidding process is the bidder's