Activity Licences for defence-related activities

An activity license for defence-related activites entitles the enterprise holding it to produce defence-related goods, perform defence-related services, and/or engage in the international trade of defence-related goods or sevices. An activity license for the foreign trade of such items and services enables its holder to apply for export, import, transfer, transit, brokering, negotiation licenses and to perform preparatory acts for the above (market research, bidding, preparatory negotiations). 

According to Government Decree 156/2017 an activity licence for defence-related activities can be granted to the following entities (hereinafter reffered to as "enterprises") operating in Hungary: 

a) business entities that have been registered at the company registry of Hungary, including business entities operating with foreign participation and branches of foreign-based companies, but not including companies established in customs-free zones,

b) sole/private entrepreneurs that are registered in the registry of sole entrepreneurs of Hungary,

c) in the case of cross-border services an undertaking registered in any European Union Member State or any other State that is a party to the Agreement on the European Economic Area, and there has been operating according to the respective legislation,

d) publicly-financed institutions that are registered in the registry of publicly-financed institutions.

Types of activity licences in terms of foreign trade :

(a)       total, their scope covering all the military goods and services,

(b)       partial, their scope covering specific military goods and services, or

(c)        ad hoc, the scope covering only a single transaction. 

Application for an activity licence has to be submitted using the standard form prescribed by the Authority.  

The following documents have to be attached to the application:    

• Information provided by the banks where the enterprise keeps its accounts (not older than 3 months),

• Sample of the signature of the enterprise's managing director, certified by a notary public (not older than 3 months),

• Managing director’s written authorisation for  the responsible administrator      

• In the case of cross-border service provision – a document certifying that the service provider has been registered as an undertaking in a European Union Member State or any other State party to the Agreement on the European Economic Area, may carry out the activities of an undertaking and operates there in accordance with legislation,

• An official document certifying that at the time the application for an activity licence is submitted, the taxpayer is deemed to be a taxpayer free of public dues under Article 178(32) of Act XCII of 2003 on taxation (this document should not be older than 30 days).

• The enterprise's internal compliance programme, with the exception of the application for an ad-hoc activity licence. The internal compliance programme is an information document supporting the reliability of the enterprise which shall provide details of the organisational, human and technical resources allocated to the management of transfers and exports, the chain of responsibility within the enterprise, internal audit procedures, awareness-raising and staff training, physical and technical security arrangements, record-keeping and traceability of transfers and exports. It has to contain the confirmation of the firm’s compliance with the Gov. Decree 156/2017, as well the method of the termination of non-conformities.

An activity licence can be issued for two years. Upon request submitted within 45 days following the expiry, the activity licence can be nenewed for five years.

The ad hoc activity licence is valid for a single deal until the relevant export/import/transfer licence expires.

Note: In cases when the enterprise intends to carry out any production and/or service activities (such as production, stockpiling, service, maintenance, destruction, training) or when the company intends to carry out foreign trade activites of its own production, first it is necessary to obtain an activity licence according to Act 109 of 2005 on the Production of military equipment and provision of military services.

The deadline for evaluation of an application for an activity licence is 45 days.