Luxemburg (Brussels Morning Newspaper) – The EU’s Court of Justice stated on Thursday that Hungary’s export controls on raw materials and construction materials violate European Union regulations.
The European Commission sued Hungary regarding a regulation that mandates the Hungarian government to be informed of any export of construction materials. Subsequently, the state has the option to purchase the materials.
How did Hungary justify its export control measures?
As reported, during the COVID-19 pandemic and global raw material shortages, Hungary implemented a procedure requiring the notification of construction material exports. It also grants the Hungarian State the right to pre-emptively purchase these materials.
Hungary had said the measure was necessary to protect critical infrastructure, by ensuring the security of the supply of construction materials.
Why did the European Commission call the measure restrictive?
The EU institution initiated infringement proceedings against Hungary, arguing that the procedure in question acts like a quantitative restriction that is unjustified, thereby violating the principle of free movement of goods.
Since these restrictions also apply to exports to third countries, the Commission argues that Hungary has violated the European Union’s exclusive authority in the area of the common commercial policy.
What did the EU court decide about Hungary’s actions?
According to the press release of the court,
“The Court upholds the Commission’s action in its entirety and declares that Hungary has failed to fulfil its obligations.”
“It finds that the measures at issue establish an additional administrative burden, provide for a fine in the event of failure to comply with the notification obligation, result in the extension of delivery times, and, if the right of preemption and purchase reserved to the Hungarian State is exercised, definitively prevent the export transaction,”
the court said.
“Finally, the Court declares that, by adopting the measures before the expiry of the standstill period of three months and in the absence of the notification to the Commission of the changed draft law, Hungary had not complied with the information procedure provided for in the field of technical regulations,”
it added.
What similar EU rulings have challenged Hungary’s national laws?
A similar important event occurred when the EU Court overturned Hungary’s laws related to the “Lex CEU” law. The Hungarian government introduced this law in 2017 to limit foreign higher education institutions, mainly focusing on the Central European University (CEU).
On October 6, 2020, the Court of Justice of the European Union decided that this law broke EU rules, including the General Agreement on Trade in Services (GATS), and violated academic freedom protected by the EU Charter of Fundamental Rights.
