DEMKK

Deed of Foundation of the Centre for Democracy Public Foundation
(in a consolidated structure with amendments)

The Government of Hungary (hereinafter: “the Founder”), in accordance with Paragraphs 1-10 of Section 74/G of Act IV of 1959 on the Hungarian Civil Code, pursuant to Sections 2-6 of the Constitution, with a view to implementing the stipulations of points a), f)and j)in Section 35 (1) of the Constitution; and executing the provisions of Article 2 of the United Nations Charter as stipulated in Section 3 of Act I of 1956 promulgating the Charter; furthermore performing the provisions of Article 1 Paragraph 2 of the International Covenant on Civil and Political Rights as stipulated in Paragraph (2) of Section 4 of Decree Law 8 of 1976 promulgating the Covenant; and implementing the provisions of Article 73 of Act CXL of 1997 on Museological Institutions, Public Libraries and Public Culture and Education and of the first subparagraph of Paragraph (5) of Section 7 of Act CXXXIX of 2005 on Higher Education, with a view to performing public service, and in an effort to promote the performance of the international legal obligations of Hungary, hereby established a Public Foundation.

By establishing the Public Foundation, the Founder, in an effort to lay the foundations of the international institutional contacts of Hungary, and in consideration of the values enshrined in the international documents and principles of modern democracy, hereby expresses its intention to promote the processing, publication and sharing of the experiences of Hungary gained during the political transition, and also to inform the Hungarian and the international public and promote the democratic reform processes of other countries.

1. Founder of the Public Foundation

The Founder of the Public Foundation is the Government of Hungary.
The Founder establishes the Public Foundation for an indefinite period of time. Legal status of the Public Foundation: public benefit, legal entity.
The Minister of Foreign Affairs and Trade has been authorised by the Government to act for and on behalf of the Founder.

2. Name of the Public Foundation

Centre for Democracy Public Foundation (hereinafter: “Public Foundation”).

3. Registered office of the Public Foundation and its organisational units'

3. 1 Registered office of the Foundation: 1022 Budapest, Árvácska utca 12.
3. 2 Registered offices of the Public Foundation’s organisational units that are legal entities:
a) Tom Lantos Institute: 1016 Budapest, Bérc utca 13-15.
b) Institute for Foreign Affairs and Trade: 1016 Budapest, Bérc utca 13-15.

4. Purpose of the Public Foundation

4. 1 The objective of the Foundation is to:
a) actively contribute to the spread of democratic government structures without any geographic limitations;
b) perform tasks related to the scientific study of democratic transition;
c) collect, organise, process and share the practical experiences gained during the democratic transition of Hungary and the other countries of the Central and Eastern European region;
d) lay down the academic groundwork for the international relationships of Hungary based on the principles of independence, democracy and mutual benefits as well as analyse them in light of global trends and European integration tendencies;
e) maintain contact with as well as process and utilise the experiences and legislative practice of the United Nations, the Organisation for Security and Cooperation in Europe, the Council of Europe and other international organisations;
f) study and monitor the practical implementation and observation of the universal ideas of democracy and human rights adopted by the international community;
g) analyse the impacts of democratic transition on the enforcement of human rights;
h) support the decision-making process related to foreign affairs and trade by research, analysis and raising awareness;
i) support from the background the policy on the topic of foreign affairs and trade with special regards to governmental organisations;
j) contribute to the expansion and development of the professional skills of experts in Hungarian foreign affairs and trade.

4. 2 Tom Lantos Institute
4. 2. 1. The Public Foundation establishes the Tom Lantos Institute (hereinafter: “Tom Lantos Institute”); an organisational unit with a legal personality, which performs the tasks necessary to realise the objectives of the Public Foundation defined under section IV. 1. f) and g) of the Public Foundation’s Deed of Foundation.

4. 2. 2. The Tom Lantos Institute is a legal entity under the control of the director.

4. 2. 3. The initial capital of the Tom Lantos Institute is HUF 1 million from the initial capital of the Public Foundation with the stipulation that the annual operational costs of the Tom Lantos Institute and the funds necessary for the fulfilment of its tasks are provided by the Founder within the framework of a budgetary support.

4. 2. 4. The director of the Tom Lantos Institute is appointed by the Board of Trustees with consideration of the regulations on conflicts of interest in Sections 38-39 of Act CLXXV of 2011 on the operation and support of civil organisations (hereinafter: the “Ectv.”) and the present Deed of Foundation. The appointment can be withdrawn by the Board of Trustees. The Chair of the Board of Trustees exercises employer’s rights over the director.

4. 2. 5. The director of the Tom Lantos Institute participates in the meetings of the Board of Trustees with a right of consultation.

4. 2. 6. The Tom Lantos Institute is represented by the director independently. The director exercises employer’s rights over all of the employees of the Institute, and is responsible for the professional and economic- financial management of the Institute. The deputy director can also represent the Tom Lantos Institute. The deputy director’s right of representation is regulated by the By-laws of the Tom Lantos Institute.

4. 2. 7. The representation and operation of the Tom Lantos Institute shall be governed by the Tom Lantos Institute’s By-laws.

4. 2. 8. In an effort to realise its objectives specified in Section IV.1 f) and g) of the Public Foundation’s Deed of Foundation, the Tom Lantos Institute shall
a) organise and finance scientific research projects;
b) organise scientific conferences and events;
c) operate an international scholarship program, grant scholarships;
d) organise and coordinate the international relationships of researchers and lecturers, organise study trips as well as improve visiting fellow relations;
e) join the work of international human rights research groups, initiate the establishment of international research teams, organise fundraising and maintain a document depository;
f) award annual prizes in recognition of academic activities performed with a view to promoting human rights, tolerance, reconciliation and transatlantic relations;
g) organise and operate international research networks in the fields of identity politics and human rights;
h) operate European and global summer university sessions and trainings;
i) participate in the works of existing local and international human rights platforms;
j) perform all other duties required to reach the aforementioned goals.

4. 3. Institute for Foreign Affairs and Trade

4. 3. 1. The Founder, the Public Foundation establishes the Institute for Foreign Affairs and Trade (hereinafter: the “Institute for Foreign Affairs and Trade”); an organisational unit with a legal personality, which performs the tasks necessary to realise theobjectives of the Public Foundation,except for those included in sections IV. 1. f) and g).

4. 3. 2. The Institute for Foreign Affairs and Trade is a legal entity under the control of the director.

4. 3. 3. The initial capital of the Institute for Foreign Affairs and Trade is HUF 40 million from the initial capital of the Public Foundation with the stipulation that the annual operational costs of the Institute for Foreign Affairs and Trade and the funds necessary for the fulfilment of its tasks are provided by the Founder within the framework of a budgetary support.

4. 3. 4. The director of the Institute for Foreign Affairs and Trade shall be appointed by the Board of Trustees with the agreement of the Founder, with consideration of the regulations on conflicts of interest in Sections 38-39 of the Ectv. and the present Deed of Foundation. The appointment can be withdrawn by the Board of Trustees with the preliminary approval of the Founder, with a qualified majority. In other cases, the Chair of the Board of Trustees exercises employer’s rights over the director.

4. 3. 5. The director of the Institute for Foreign Affairs and Trade participates in the meetings of the Board of Trustees with a right of consultation.

4. 3. 6. The Institute for Foreign Affairs and Trade is represented by the director independently. The director exercises employer’s rights over all of the employees of the Institute, and is responsible for the professional and economic- financial management of the Institute. The deputy director can also represent the Institute for Foreign Affairs and Trade. The deputy director’s right of representation is regulated by the By-laws of the Tom Lantos Institute.

4. 3. 7. The representation and operation of the Institute for Foreign Affairs and Trade shall be governed by the Institute for Foreign Affairs and Trade’s By-laws. The operations of the Institute shall be regulated in a separate operational regulation. The director shall make the decision on the approval and modification of the internal regulations of the Institute for Foreign Affairs and Trade.

4. 3. 8. In an effort to realise the objectives of the Public Foundation, the Institute for Foreign Affairs and Trade shall:
a) analyse and evaluate foreign affairs and trade activities, make recommendations regarding developments;
b) fulfil the strategic planning tasks for issues of foreign affairs and trade, and with its analyising and evaluating work contribute to the policy decision-making process of foreign affairs and trade;
c) analyse and evaluate the domestic and international research activities related to foreign affairs and trade along with the opportunities for development in task fulfilment issues, and make recommendations regarding development;
d) coordinate international relationships with institutes for foreign affairs and trade and think-tanks of other countries;
e) through its scientific research activity, support the development and implementation of the special affairs of cultural, scientific and economic-diplomacy institutes;
f) join international and domestic research projects and the work of research groups focusing on the issues of foreign affairs and trade, support the development of foreign affairs and trade related issues of the public administration services on the local and national level;
g) support the publication of technical books and journals on the topic of foreign affairs and trade, particularly, the publication of “Foreign Policy Review” and “Külügyi Szemle”;
h) analyse and evaluate the fulfilment of the foreign affairs and trade related tasks of the public services and the functioning of the organisational system ensuring these public services and the improvement of their efficiency, and make recommendations regarding the development of these;
i) collect information and formulate forecasts on the dominant events and decisions of other nations affecting foreign affairs and trade as well as on the foreign affairs processes;
j) contribute to the knowledge development and trainingof the experts who fulfill tasks in the area of Hungarian foreign affairs and trade;
k) participate in laying down the scientific and methodological groundwork for the training systems for governmental officials working in the area of diplomacy, andin the fulfilment of the related expert tasks and the ensuring of the professional internal trainings for foreign affairs and trade experts;
l) strengthen the scientific and civil relations of foreign affairs and trade government by organising Hungarian and foreign language scientific conferences and events; and facilitate the wide-ranging accessibility of the results of industrial policy and scientific research in the civil sphere;
m) participate in the dissemination of foreign affairs and trade related public information, in the training facilitating the promotion of foreign affairs and trade related professional knowledge, and in the organisation of dissemination fora and events;
n) organise and operate a foreign affairs and trade focused information and research system and network in the area of foreign affairs and trade; ensure the exploration, evaluation, retention and dissemination of the heritage of the foreign affairs and trade focused information and research system;
o) support the development of foreign trade related public administration services, contribute to the fulfilment of public administration tasks related to foreign affairs;
p) contribute to ensuring the conditions of the professional and scientific presentations of the official delegations and other invitees arriving in Hungary;
q) cooperate in laying down the foundation and the systematic review of the foreign affairs and trade strategy, contribute to diplomacy planning.

4. 4.1. The Public Foundation performs its activities in line with the requirements of the public benefit organisation. During the implementation of its goals, the Public Foundation contributes to the fulfilment of the public tasks defined in
a) Article 2 of United Nations Charter promulgated in Act I of 1956,
b) Paragraph 3 of Article 1 of the International Covenant on Civil and Political Rights promulgated with decree law No. 8 of 1976,
c) Section 73 of Act CXL of 1997 on Museological Institutions, Public Libraries and Public Culture and Education,
d) In the first phrase of Section 2 (2) of Act CCIV of 2011 on National Higher Education,
e) In points a) and b) of Section 140 and Section 141 (2) of Government Decree No. 94/2018 (V. 22.) on the tasks and scopes of authority of the members of Government,
f) In Act XC of 2014 on international development cooperation and humanitarian aid,
g) Act CXXXI of 2010 on public participation in developing legislation,
h) Act CXC of 2011 on national public education,
i) Act LXXIII of 2016 on diplomacy delegations and long-term service in foreign affairs,
j) Government Decree No. 238/2017 (VIII. 18.) on the preparation related to long-term service in foreign affairs,
k) Government Decree No. 366/2016 (XI. 29.) on research and analysis tasks in the area of foreign affairs and trade strategy.

4. 4.2 In relation to the public tasks defined in point IV.4.1, the Public Foundation carries out public benefit activities according to point 20 of Section 2 of the Ectv. Within this framework, in order to achieve the objectives set out in Section IV. 1., it carries out the tasks listed in points IV.2.8, IV.3.8 and IV.4.1 and it also contributes to fulfilling Hungary’s international commitments.

4. 5. The Public Foundation is an open public foundation performing certain duties of the state and its public benefit services are available to anyone. In addition, the Public Foundation may provide other benefits through either a public or a selective tender in accordance with the terms and conditions set out in Ectv. to accomplish its objectives. The Public Foundation including the Institute for Foreign Affairs and Trade and Tom Lantos Institute (collectively referred to as: the “Institutes”) shall not exercise any direct political activity, its organisation is independent of political parties and shall not provide any financial support for them.

4. 6. The Public Foundation is an organisation open for the financial support, asset assignment or donations of any international organisation, foreign state or government, domestic or foreign natural persons, legal entities and organisations without legal personality as long as they accept the objectives and the operating principles of the Public Foundation. The Board of Trustees of the Public Foundation shall decide on accepting such contributions. During this process the Board of Trustees shall examine the information on the organisation, institution or individual offering the contribution with the intent to join and shall weigh the significance of the specific objective if the donation is to be earmarked for a special purpose. They can reject such offers if their purpose is, in part or in whole, contrary to the objectives of the Public Foundation. Such contributions may be granted directly to the Institute for Foreign Affairs and Trade or the Tom Lantos Institute. All specifically designated contributions accepted must be managed separately and used exclusively for the specified purposes.

The Board of Trustees shall reject a contribution if
a) the applying legal entity or natural person conducts activities that are in conflict with the objectives of the Public Foundation; or
b) the objective of the designated donation is contrary to the objectives of the Public Foundation; or
c) accepting the proposed donation would have any adverse effects on the Public Foundation; or
d) accepting the proposed donation would violate the international relations or other interests of Hungary.

5. Assets of the Public Foundation

5. l. Initial assets of the Public Foundation:

The Founder provides the initial assets assigned to the purposes of the Public Foundation in a way where it allocates HUF 20 million from the general reserves of the central budget for the purposes of the Public Foundation as well as the property located at Budapest XII, Svájci út 10. 2nd floor, Hungary for use by the Public Foundation.

5. 2. Financial resources of the Public Foundation:
a) financial contributions made by new members and not for the purpose of increasing the equity capital of the Public Foundation;
b) annual financial support from the central state budget;
c) other proceeds and donations;
d)  an amount of HUF 40,000,000 made available by the Founder for the creation of the Institute for Foreign Affairs and Trade as an organisational unit with legal personality.

5. 3. The equity capital of the Public Foundation is HUF 10 million.

5. 4. In an effort to pursue its objectives, the Public Foundation shall manage its assets independently.

5. 5. Pursuant to Article VI.3. of the Deed of Foundation, the assets and the yields of the assets assigned by the Founder and the new members may be used exclusively for the purpose of pursuing the objectives of the Public Foundation.

6. Management of the Public Foundation

6. 1. The Public Foundation may conduct entrepreneurial and investment activities in accordance with the Rules of Asset Management and Investment, based on a qualified majority decision of the Board of Trustees, exclusively for the purpose of pursuing its objectives for the benefit of the general public or the basic objective specified in point IV.1 and without endangering such objectives. The profits gained in the course of business shall not be divided but spent exclusively on the activities that serve the public interest as set forth in point IV.4.1 of the Deed of Foundation.

6. 2. The Public Foundation or its organisational unit with a legal personality can only participate in business organisations where its liability is limited to their capital contributions.

6. 3. The Public Foundation allocates an ordinary capital to ensure continuous operations. Its value is HUF 10 million. The ordinary capital is a base within the Public Foundation’s capital and only its yields can be used directly to cover the objectives of the Public Foundation (operating costs). All proceeds above the ordinary capital may be used directly for the objectives of the Public Foundation. The Founder shall determine the share of the initial capital to be allocated as ordinary capital.

The following shall be allocated as ordinary capital:
a) unless otherwise specified by the contributing new members, 50 percent of all capital contributions above HUF 500,000 until the ordinary capital reaches HUF 1 billion;
b) members’ contributions specifically designated to raise the ordinary capital;
c) the share of the assets of the Public Foundation generated during its operation and allocated for this purpose by the Board of Trustees, not including the own assets of the organisational units of the Public Foundation with a legal personality;
d) the share of the budgeted amount of the central budget allocated by the Government for the annual operation of the Public Foundation, upon approval of such annual amount.

6. 4. The Public Foundation shall keep its liquid assets originating from the subsystems of the central budget on the cash account managed by the Hungarian State Treasury (hereinafter: the “Treasury”) until they are used. The Public Foundation shall have the right to utilise its temporary liquid assets for the purchase of government bonds sold exclusively within the network of the Treasury. Liquid assets originating from other sources shall be held at financial institutions offering the best possible terms, or other, more favourable means shall be found to preserve the value of such assets. The Board of Trustees shall have the power to make the decision in such cases.

6. 5. Contributions in kind unsuitable for direct use and utilisation by the Public Foundation shall be sold in exchange for a consideration. All amounts received through such sales shall be used in accordance with any eventual orders of the donor and accounted for pursuant to Act C of 2000 on Accounting.

6. 6. The Public Foundation may not issue any bills or other debt securities.

6. 7. In an effort to support the non-profit business operations of the Public Foundation and the Institutes, insofar as the Public Foundation and the Institutes wish to perform investment activities within the limits set by the law, the Board of Trustees of the Public Foundation shall adopt an Investment Policy.

6. 8. An annual amount specified by the Board of Trustees, taking into account the objectives of the Foundation and reasonable operational management as well as the objectives designated by domestic and foreign donors may be used to cover the operational expenses of the Public Foundation. The Founder shall ensure the Public Foundation’s annual operational expenses within the framework of a budgetary support.

6. 9. The Public Foundation excluding the independently managed Institutes may allocate (direct or indirect) support without a competition up to 5% of the value of its assets but only up to a sum of HUF 1 million annually with a view to pursuing the objectives set out in the Deed of Foundation.

6. 10. The Public Foundation shall enter into an agreement with the recipient of such funds to lay down the purpose of the financial support, the order of its utilisation, the content, the deadline and the accounting records of the settlement, the method of verification and the provisions regarding the consequences of any breach.

6. 11. The Public Foundation shall publish the most important data on its activities and financial management, its annual report and public benefit supplement on its official website.

6. 12. The officials of the Public Foundation (members and Chair of the Board of Trustees, the heads of the Institutions and the members of the Supervisory Board), who are subjects to Act CLII of 2007 on certain obligations to file declarations of property, shall issue appropriate declarations of property under the conditions specified in the law. The declarations of property are filed by the Secretary of the Public Foundation.

7. Organisation and functioning of the Public Foundation

7. 1. The highest decision-making, management and administrative body of the Public Foundation is the 7 (seven)-member Board of Trustees. The members of the Board of Trustees are appointed by the Founder based on the recommendations of the Minister of Foreign Affairs and Trade from among the acknowledged personalities of international and Hungarian academia and public life, for a definite period of three years. The Chair and the Vice-Chair of the Board of Trustees shall be appointed by the Founder from among the members based on the recommendation of the Minister of Foreign Affairs and Trade for a definite period of 3 (three) years. The members of the Board of Trustees shall accept their appointment in separate statements. The Chair, the Vice-Chair and the members of the Board of Trustees can be reelected according to the designated procedure and for the specified period of time.

7. 2. Members of the Board of Trustees

    Dr. János Martonyi
    Vilmos Szabó
    Attila Mesterházy
    Dr. Zsófia Koncz
    Dr. László Józsa
    Dr. Gábor Tamás Nagy
    Zsolt Németh

Chair of the Board of Trustees: Dr. János Martonyi
Vice-Chair of the Board of Trustees: Vilmos Szabó

7. 3. The Board of Trustees positions shall be terminated upon:
a) the termination of the Board of Trustees membership;
b) resignation from the office by the member, with the stipulation that according to Section 3:25 (4) of Act V of 2013 on the Civil Code (hereinafter: the “Civil Code”), if the operability of the Public Foundation requires, the resignation enters into force by the appointment of a new member, or, for lack of it, maximum sixty days after the official announcement;
c) the expiration of the definite period of time.

7. 4. The Board of Trustees membership shall be terminated upon:
a) resignation;
b) revocation by the Founder pursuant to Paragraph 3:398 (2) of the Civil Code, or the withdrawal of the nomination based on Section 5 of Act LXV of 2006 on the modification of Act XXXVIII of 1992 on the state budget and certain related laws;
c) termination of the Public Foundation;
d) the death of the Board of Trustees member;
e) theexpiration of the definite period of time;
f) the establishment of the reason for exclusion prevailing against the member;
g) the establishment of the member’s conflict of interest;
h) the violation of the obligation to submit a declaration of property as per point d) of Section 3 (3) of the Vnytv., based on Section 9 (2) of same Act, by operation of law.

7. 5. Operation and scope of authority of the Board of Trustees:

7. 5.1. The Board of Trustees shall hold meetings whenever necessary but at least twice a year. Decisions are made either by holding or without holding meetings.

a) Decision made by holding a meeting
The meetings of the Board of Trustees shall be convened in writing by the Chair, or if he/she is unable to discharge his/her duties, the Vice-Chair, in writing specifying the agenda and sending out the written proposals no later than 14 days prior to the scheduled date of the specific meeting. The meeting of the Board of Trustees shall be considered to have quorum if more than one half of the Board of Trustees members are present. In the absence of quorum, the Board of Trustees shall be reconvened within 14 days with the same agenda. The Board of Trustees must be summoned for a meeting within 30 days of the receipt of the written proposal - stating the reason and aim of the proposition - of any member of the Board of Trustees. The Chair is obliged to summon a meeting within 8 days after receiving such proposal. In case the Chair does not fulfil his/her obligation, a meeting can be summoned by the initiating Board of Trustees member.

b) Decision made without holding a meeting
Passing a resolution without a meeting shall be initiated by the Chair, of if he/she is unable to discharge his/her duties, the Vice-Chair, by sending the draft resolution to the members of the Board of Trustees. Within at least 8 but maximum 14 days after the receipt of the draft, the members of the Board of Trustees shall send their vote to the initiating Chair or Vice-Chair and Secretary. The decision-making procedure is valid only if more than a half of the members of the Board of Trustees send in their vote. The summoning of the meeting is necessary in case any one of the members of the Board of Trustees desire to hold a meeting. Within the first three days after the last day of the timeframe determined for the vote - or in case all votes arrive prior to the deadline, within three days after the receipt of the last vote - the initiating Chair or Vice-Chair will determine the result of the vote and share it with the members of the Board of Trustees within the following three days. The decision will be made on the final day of the voting, or if all the votes arrive prior to the deadline, then on the day when the last vote is received.

7. 5. 2. The meetings of the Board of Trustees are public, however, in specified cases it may be restricted by the rule of law. The Board of Trustees shall pass a special resolution on the exclusion of the public. The Board of Trustees shall vote with simple majority on holding a closed session parallel to accepting the individual agenda items.

7. 5. 3. Minutes shall be kept on the meetings of the Board of Trustees. The minutes shall contain a concise version of the interactions at the meeting. The minutes shall include the date of the meeting sessions, the word-by-word text of the resolutions passed, the regulations on the scope of the decision, the number and names of the members voting for or against. The minutes shall be signed by the acting chair of the meeting, the rapporteur and the authenticator. The minutes shall be put on file in the archives of the Board of Trustees. The minutes shall serve as the basis for the Book of Resolutions listing the content, date, scope as well as the number and names of the supporters and opponents of the decision. The minutes recorded at the meetings of the Board of Trustees shall be sent to the Supervisory Board.

7. 5. 4. The resolutions of the Board of Trustees are public and shall be published on the official website of the Public Foundation. Furthermore, the decisions of the Board of Trustees shall be disclosed to the interested parties in writing, in a verifiable manner. The Board of Trustees shall inform the general public of its resolutions regarding the use of the assets of the Public Foundation through the national press.

7. 5. 5. Requests for access to the documents shall be approved by the Chair or the Vice-Chair of the Board of Trustees. The request for access to documents as well as the pertaining approval must be put in writing.

7. 6. The Board of Trustees shall pass its resolutions by simple majority of the members present. In case of a tie vote, the Chair shall cast the tie-breaking vote.

7. 7. A qualified, two-third majority of the members of the Board of the Trustees present shall be required
a) to adopt or amend the By-laws (hereinafter: the “By-laws”) or the Asset Management and Investment Policy of the Public Foundation, excluding the Institutions’ own Asset Management and Investment Policies;
b) to adopt or amend the rules of procedures of the Board of Trustees;
c) to adopt or amend the annual financial management plan;
d) to certify and adopt the annual report and the public benefit supplement;
e) to pass resolutions on the allocation of the assets of the Public Foundation and the use of the liquid assets received;
f) to admit new members to the Public Foundation and to pass a resolution on accepting assets from the new member;
g) to appoint the directors of the Institute for Foreign Affairs and Trade and the withdrawal of their nominations, with the prior approval of the Founder;
h) to appoint the Director of the Tom Lantos Institute and the withdrawal of his/her nomination;
i) to adopt the annual report on the work and activity of the Secretary of the Public Foundation;
j) to decide on the Public Foundation’s commitment exceeding HUF2,500,000 (excluding the Institutions);
k) for everything referred to the Board of Trustees’ exclusive sphere of action by the Deed of Foundation or the by-laws of the Public Foundation.

7. 8. The operation, organisation, representation and management of the Public Foundation are defined in detail by the By-laws and the Asset Management and Investment Policy within the framework of the Deed of Foundation. The publicity of the Public Foundation’s operation, access to its services and the communication of its annual report shall be provided through the official website of the Public Foundation.

7. 8. 1. In addition to those specified in this Deed of Foundation, the By-laws of the Public Foundation shall contain:
a) the rules of procedures of the Board of Trustees;
b) the competences of the officers;
c) the competence and role of the Secretary of the Public Foundation;
d) the publicity of the Public Foundation’s operations, ways of access to its services and the publication of its reports.

7. 8. 2. In addition to those defined herein, the Institutions’ By-laws shall include:
a) the Institute’s organisational structure;
b) the order of substitution in the case of the Institute’s head;
c) the publicity of the Institutions’ operation, the way of the use of their services and the disclosure of their reports.

7. 9. Unless endangering the targeted activities of the Public Foundation, the members of the Board of Trustees receive a honorarium for their services and may receive a reimbursement for their necessary and verified expenses, the conditions, amount and accounting method of which shall be specified in the independent policy of the Public Foundation. The members of the Board of Trustees receive their honoraria by meeting session. The amount of the honorarium per session may not exceed 100% of the current base remuneration for public officials except for the Chair of the Board of Trustees, whose honorarium may not exceed double that amount.

7. 10. The Vice-Chair is the full substitute of the Chair, fulfilling the duties of the Chair if the Chair is unable to discharge his/her duties. If the Chair is unable to discharge his/her duties, the employer’s rights are exercised by the Vice-Chair.

7. 11. The Board of Trustees shall submit to the Founder their report on the activities of the Public Foundation in the previous year by no later than 31 March each year. 31 May is the deadline for the submission of the financial situation and key business management data of the Public Foundation. The Board of Trustees shall enclose the report of the Supervisory Board to the annual report and its public benefit supplement.

8. Conflict of interest

8. 1. In addition toSection 3:22 and 3:397 (3)-(4) of the Civil Code, the following rules apply to exclusion or conflicts of interest regarding the conflicts of interest of the Chair, Vice-Chair and members of the Board of Trustees:

8. 1. 1. For three years following the termination of the non-profit organisation, a person cannot assume senior positions at any other non-profit organisations if they held senior offices at a public benefit organisation, for at least one year one or two years prior to the termination of such organisation,
a) which was terminated without a legal successor, failing to settle its tax and customs debts recorded at the state tax and customs authority,
b) against which the state tax and customs authority detected a significant tax shortfall,
c) against which the state tax and customs authority decided on a business closure, or levied a fine instead of the business closure,
d) whose tax number was suspended or cancelled by the state tax and customs authority according to the Act on the Order of Taxation.

8. 1. 2. Any official of the Public Foundation or the person nominated as such shall inform in advance all affected public benefit organisations of similar simultaneous employment at another public benefit organisation.

8. 2. Conflict of interest of Board of Trustees members: Board of Trustees members may not be members of the Supervisory Board, the director of any of the Institutes or the Secretary and auditor of the Public Foundation. The members of the Board of Trustees cannot be the immediate relatives of each other or any member of the Supervisory Board or the auditor.

8. 3. Members of the Board of the Trustees may not cast their votes on a resolution, if they or their immediate family members [see point 1 of Section 8:1 (1) of the Civil Code] or relatives [see point 2 of Section 8:1 (1) of the Civil Code] (hereinafter collectively: the “relative”), based on the resolution:
a) receive exemption from any obligation or liability, or
b) are granted any advantage or have an interest in the legal transaction to be concluded or the resolution to be passed on the financing. Services in kind available to anyone unconditionally within the framework of funding for a targeted project of the Public Foundation shall not qualify as such an advantage.

9. The Supervisory Board

9. 1. The controlling body of the Public Foundation is the 3 (three)-member Supervisory Board.

9. 2. The Chair and the members of the Supervisory Board are appointed for five years by the Founder upon the recommendation of the Minister of Foreign Affairs and Trade.

9. 3. The Supervisory Board
Chair:
Dr. Tamás Lovassy

Members:
Dr. Ildikó Kátai
Péter Szalai

9. 4. A Supervisory Board office is terminated upon:
a) termination of membership;
b) resignation from the office by the member, with the stipulation that in case the operability of the Public Foundation requires, the resignation enters into force by the appointment of a new member, or, for lack of it, maximum sixty days after the official announcement;
c) recall from the office;
d) the expiration of the definite period of time.

9. 5. The Supervisory Board membership shall be terminated upon:
a) resignation from the office by the member, with the stipulation that in case the operability of the Public Foundation requires, the resignation enters into force by the appointment of a new member, or, for lack of it, maximum sixty days after the official announcement;
b) recall from the office;
c) the expiration of the definite period of time;
d) the establishment of the reason for exclusion prevailing against the member;
e) the establishment of the member’s conflict of interest;
f) the violation of the obligation to submit a declaration of property as per point d) of Section 3 (3) of the Vnytv., based on Section 9 (2) of same Act, by operation of law.

9. 6. The Supervisory Board
a) shall have the power to conduct a targeted examination if it believes that the implementation or the compliance of the financial management activities are endangered and also if requested by the Founder or the Board of Trustees;
b) shall have the right to request reports from executive officers and information from the employees of the organisation;
c) shall have the right to examine the books, the documents, the money management and remittance practices of the Public Foundation;
d) shall be obliged to carry out comprehensive reviews of the operation and management of the Public Foundation in respect of the full range of the issues;
e) shall inspect the coordinated nature of the financial and management activities with consideration to the annual auditor’s report;
f) shall issue an opinion on the annual report and public benefit supplement;
g) shall submit a written report to the Founder on its experiences concerning the operation of the Public Foundation whenever deemed necessary but at least once a year.

9. 7. The Supervisory Board shall submit its opinions formulated during the fulfilment of its task to the Board of Trustees in writing.

9. 8. The members of the Supervisory Board shall have the right to participate in the meeting of the Board of Trustees of the Public Foundation as consulting members, or will participate in it if a legal regulation stipulates it.

9. 9. The Supervisory Board shall hold meetings when necessary but at least once a year. The meetings shall be convened by the Chair in writing with the agenda enclosed and no later than 8 days prior to the scheduled date. In certain special cases such meetings can be convened without delay. Any member may initiate an emergency meeting session of the Supervisory Board, which the Chair shall schedule no later than 15 days following the receipt of such request.

9. 10. The Supervisory Board shall pass its resolutions with public voting and a simple majority. The Supervisory Board has a quorum if three of its members are present. All other rules of operations are included in the rules of procedures of the Supervisory Board specified by the Supervisory Board itself, which may not be in conflict with any legal regulation, this Deed of Foundation or the provisions of the By-laws.

9. 11. The Supervisory Board shall be obliged to inform and initiate a meeting of the Board of Trustees if it becomes aware of information that:
a) during the operation of the organisation, a breach or any other event that seriously impacts the interests of the organisation occurred, the termination of which, or the prevention or the mitigation of whose consequences necessitates a decision by an authorised managing body;
b) facts have been discovered that substantiate the liability of senior officials.

9. 12. The Board of Trustees must be convened at the initiation of the Supervisory Board, within 30 days following the submission of their proposal. After such period the Supervisory Board shall have the right to summon the Board of Trustees. If the Board of Trustees fails to pass the measures required to restore lawful operations, the Supervisory Board shall, without delay, notify the State Audit Office, which checks the lawfulness and expediency of operational management, the supervising prosecutor's office and the Founder.

9. 13. Unless endangering the targeted activities of the Public Foundation, the members of the Supervisory Board receive a honorarium for their services and may receive a reimbursement for their necessary and verified expenses, the conditions, amount and accounting method of which shall be specified in the independent policy of the Public Foundation, with the preliminary approval of the Minister of Foreign Affairs and Trade representing the Founder. The members of the Supervisory Board receive their honoraria by meeting session. The amount of the honorarium may not exceed 100% of the current base remuneration for public officials except for the Chair of the Supervisory Board, whose honorarium may not exceed double that amount.

9. 14. In respect of the operation, the order of meetings, the resolution passing of the Supervisory Board and the involvement of publicity, the same rules apply to the Supervisory Board as to the Board of Trustees, the only exception being that the minutes shall be signed by all the members of the Supervisory Board present at the specific meeting.

9. 15. An individual cannot be a member of the Supervisory Board if he/she:
a) is the Chair, Vice-Chair or a member of the Board of Trustees, the Director of any of the Institutes or the Secretary of the Public Foundation;
b) has an employment relationship or any legal relationship that involves work with the Public Foundation, for the purposes of performing activities outside the scope of his/her engagement, if no legal regulations stipulate otherwise;
c) receives a share from the targeted allocations of the Public Foundation except for services in kind available to any other person unconditionally;
d) is a relative of the individuals listed in points a)-c)above;
e) is the auditor of the Public Foundation.

9. 16. For three years following the termination of the non-profit organisation, a person cannot assume senior positions at any other non-profit organisations if they held senior offices at a public benefit organisation, for at least one year one or two years prior to the termination of such organisation,
a) which was terminated without a legal successor, failing to settle its tax and customs debts recorded at the state tax and customs authority,
b) against which the state tax and customs authority detected a significant tax shortfall,
c) against which the state tax and customs authority decided on a business closure, or levied a fine instead of the business closure,
d) whose tax number was suspended or cancelled by the state tax and customs authority according to the Act on the Order of Taxation.

9. 17. The Chair and members of the Supervisory Board or the person nominated as the Chair shall inform in advance all affected public benefit organisations of similar simultaneous employment at another public benefit organisation.

10. Auditor

10. l. Only an independent auditor selected during an application process, commissioned or employed in a contract for work by the Board of Trustees shall have the right to audit the accounting order as well as the bookkeeping and operational management performance of the Public Foundation once the Public Foundation is registered.

10. 2. The auditor
a) shall review the books of the Public Foundation annually, and submit reports after each annual audit review to the Public Foundation;
b) when carrying out the specific tasks,

    the auditor shall have the right to review the petty cash, the contracts and the bank account of the Public Foundation;
    have the right to request information from the employees of the Public Foundation;
    perform the tasks specified by the Board of Trustees.

10. 3. The Board of Trustees may not pass a valid resolution on accepting the annual report of the Public Foundation without the countersignature of the auditor and the opinion of the Supervisory Board.

10. 4. A person cannot be the auditor of the Public Foundation if he/she:
a) is the Chair, Vice-Chair or a member of the Board of Trustees;
b) is the Chair or a member of the Supervisory Board;
c) has an employment relationship or any legal relationship that involves work with the Public Foundation, for the purposes of performing activities outside the scope of his/her engagement;
d) is a beneficiary of the targeted support of the Public Foundation;
e) is a relative of the individuals listed in points a)-d)above;
f) is employed by or has an interest-based relationship with the Founder.

10. 5. The Board of Trustees shall determine the auditor’s fee.

11. Representation of the Public Foundation, signatures

11. 1. The Public Foundation is represented by the Chair or Vice-Chair of the Board of Trustees when dealing with third parties and authorities. Their right of representation is independent.

11. 2. The Chair and Vice-Chair of the Board of Trustees shall have independent rights of disposal over the bank (treasury) account of the Public Foundation. The heads of the institutes have independent rights of disposal over the bank (treasury) account of the institution they represent.

12. The Secretary of the Public Foundation

12. 1. The Foundation’s administrative and operational tasks are performed by the Secretary of the Board of Trustees (hereinafter: the “Secretary”).

12. 2. The Secretary is responsible for preparing the meetings of the Board of Trustees, and for implementing the resolutions and other decisions of the Board of Trustees affecting the Public Foundation. Unless otherwise provided in the By-laws of the Public Foundation, the Secretary shall perform the salary, labour, financial and accounting administration of the Public Foundation, as well as all the administrative and management tasks that the By-laws of the Public Foundation assigns to the Secretary, except for the tasks related to the operation of the Institutes.

12. 3. The Secretary shall be appointed by the Board of Trustees with consideration of the rules on conflicts of interest included in Section 38-39 of the Ectv. and this Deed of Foundation. The nomination of the Secretary and the withdrawal of his/her nomination are decided by the members of the Board of Trustees with a simple majority. In the case of the Secretary, the employer’s rights are exercised by the Chair of the Board of Trustees. If he/she is unable to discharge his/her duties, the employer’s rights are exercised by the Vice-Chair.

13. Final Provisions

13. 1. The Public Foundation is officially created upon registration by a court of registry. The Public Foundation is officially registered through the Minister of Foreign Affairs and Trade of Hungary.

13. 2. In an effort to achieve its objectives, the Public Foundation cooperates with Hungarian and international governmental and civil organisations and research institutes performing similar public duties.

13. 3. The Board of Trustees shall report to the Founder on the operation of the Public Foundation annually.

13. 4. The annual financial and economic report and the public benefit supplement of the Public Foundation shall be made public on the official website of the Public Foundation. The Board of Trustees shall submit the approved annual report and public benefit supplement to the Minister of Foreign Affairs and Trade acting on behalf of the Founder.

13. 4. 1. The currently valid legal regulations shall apply to the rules of the order of bookkeeping and reporting relevant for the Public Foundation.

13. 5. The currently valid legal regulations shall apply to the reporting order of the targeted support provided for the Public Foundation.

13. 6. The detailed rules and regulations on the management and use of foundation assets and yields shall be governed by the asset management policy of the Public Foundation.

13. 7. The issues not regulated herein shall be subject to the provisions of the Civil Code, the Ectv. and the currently valid legal regulations.

13. 8. The Deed of Foundation of the Public Foundation must be published in the Official Notices annexed to the Hungarian Official Gazette.

 

Budapest, 16. december 2021.

Péter Szijjártó
Minister for Foreign Affairs and Trade
on behalf of the Founder