Article 162.
The Allied and Associated Governments recognise that the resources of Hungary are not adequate, after taking into account the permanent diminutions of such resources which will result from other provisions of the present Treaty, to make complete reparation for such loss and damage.
The Allied and Associated Governments, however, require, and Hungary undertakes, that she will make compensation as hereinafter determined for damage done to the civilian population of the Allied and Associated Powers and to their property during the period of the belligerency of each as an Allied and Associated Power against Hungary by the said aggression by land, by sea and from the air, and in general all damage as defined in Annex I hereto.
Article 163.
The amount of such damage for which compensation is to be made by Hungary shall be determined by an Inter-Allied Commission to be called the Reparation Commission and constituted in the form and with the powers set forth in the present Treaty, particularly in Annexes II–V inclusive hereto. The Commission is the same as that provided for under Article 233 of the Treaty with Germany, subject to any modifications resulting from the present Treaty. The Commission shall constitute a Section to consider the special questions raised by the application of the present Treaty; this Section shall have consultative power only, except in cases in which the Commission shall delegate to it such powers as may be deemed convenient.
The Reparation Commission shall consider the claims and give to the Hungarian Government a just opportunity to be heard.
The Commission shall concurrently draw up a schedule of payments prescribing the time and manner for securing and discharging by Hungary, within thirty years dating from May 1, 1921, that part of the debt which shall have been assigned to her after the Commission has decided whether Germany is in a position to pay the balance of the total amount of claims presented against Germany and her allies and approved by the Commission. If, however, within the period mentioned, Hungary fails to discharge her obligations, any balance remaining unpaid may, within the discretion of the Commission, be postponed for settlement in subsequent years or may be handled otherwise in such manner as the Allied and Associated Governments acting in accordance with the procedure laid down in this Part of the present Treaty shall determine.
Article 164.
The Reparation Commission shall, after May 1, 1921, from time to time consider the resources and capacity of Hungary, and, after giving her representatives a just opportunity to be heard, shall have discretion to extend the date and to modify the form of payments such as are to be provided for in accordance with Article 163, but not to cancel any part except with the specific authority of the several Governments represented on the Commission.
Article 165.
Hungary shall pay in the course of the year 1920 and the first four months of 1921, in such instalments and in such manner (whether in gold, commodities, ships, securities or otherwise) as the Reparation Commission may lay down, a reasonable sum which shall be determined by the Commission. Out of this sum the expenses of the armies of occupation subsequent to the Armistice of November 3, 1918, provided for by Article 181, shall first be met, and such supplies of food and raw materials as may be judged by the Governments of the Principal Allied and Associated Powers essential to enable Hungary to meet her obligations for reparation may also, with the approval of the said Governments, be paid for out of the above sum. The balance shall be reckoned towards the liquidation of the amount due for reparation. Hungary shall further deposit bonds as prescribed in paragraph 12 (c) of Annex II hereto.
Article 166.
Hungary further agrees to the direct application of her economic resources to reparation as specified in Annexes III, IV and V relating respectively to merchant shipping, to physical restoration and to raw material; provided always that the value of the property transferred and any services rendered by her under these Annexes, assessed in the manner therein prescribed, shall be credited to her towards the liquidation of her obligations under the above Articles.
