Collective Commentary about the New Package Travel Directive

HUNGARY | ANDRAS SALAMON 845 II. REGULATION OF FINANCIAL SECURITY PRIOR TO 01 JULY 2018 8) Prior to the amendment of 1 July 2018, the tasks, conditions and rates of financial security were regulated in Sections 8 to 10 of Government Decree 213/1996 of 23 December as follows: Section 8 Financial security may be provided as: • a) a bank guarantee, • b) an insurance contract concluded with an insurance company (insurance companies), which may also be concluded on passenger volume (directly for the benefit of the passenger), • c) blocked funds (hereinafter referred to as ‘cash deposit’) deposited by the travel company at a credit institution, allocated for the purposes specified in Section 10 (1). Purposes specified in Section 10(1): • a) for covering the costs of the measures to be taken for passengers in emergency situations during travel (e.g. repatriation) and of involuntary stay, and • b) for repaying the advance payment and the participation fee. Section 8(3) The value of the financial security • shall be 12% of the planned revenues from travels from Hungary to foreign countries, the domestic sale of foreign accommodations and the sale on commission of travels organised by foreign travel organisers, or at least HUF 5 million, • and 3% of the planned revenues where domestic travels are organised, or at least HUF 500 000, • if the travel company uses a non-scheduled aircraft (charter flight) in organising a travel from Hungary to a foreign country or if its liabilities arising from the guaranteed contract exceed 25% of the planned revenues, the value of the financial security shall be 20% of the planned net sales, or at least HUF 20 million. 9) Use of financial security [Section 10(5)]: • If the travel company fails to fulfil its obligation to repatriate the passengers or to repay the advance payment or the participation fee, the registration