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Offshore companies and applying the transparency provisions of the State Budget Act

In the context of surety guarantee applications submitted in the framework of co-operation agreements, Garantiqa Creditguarantee Co. Ltd. regards those companies as offshore that are non-resident or that have offshore companies among their direct owners. Garantiqa Creditguarantee Co. Ltd. regards as offshore a debtor enterprise if the enterprise or its direct owner(s) — irrespective of their ownership share — is (are) registered in any of the countries listed in the appended document . Besides using the list, customers are also required to give a declaration on the fulfilment of statutory conditions regarding transparency.

In view of the fact that it is not reasonable to restrict the guarantee undertaking with respect to individual guarantees based on such a static list of offshore companies — due to the legal environment and the individual assessment —, the transparency provisions of the State Budget Act shall apply to applications submitted in the context of individual assessment procedures, and customers shall give a declaration on their compliance with these provisions. The declaration states, in the context of transparency and with reference to the Act, that

  • their ownership structure and their beneficial owner within the meaning of the Act on the Prevention of Money Laundering and Terrorism Financing, are knownable,
  • it is a tax resident in an EU member state, or a state that is party to the Agreement on the European Economic Area, or a member country of the Organisation for Economic Cooperation and Development or a country that has signed an agreement with Hungary on the avoidance of double taxation,
  • it does not qualify as a controlled foreign corporation under the Act on Corporate and Dividend Tax,
  • the above-specified points do not apply to a legal entity or a business organisation without legal personality that either directly or indirectly has a shareholding, control or voting rights in excess of 25% in the business organisation.

Please note that in the individually assessed cases, we will continue to examine and assess any potential ownership risks in the course of our risk analysis.