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This anti-corruption legislative package was adopted by the National Assembly upon the proposals of the Government as a response to the concerns voiced by the European Commission following the triggering of the Conditionality Mechanism (Regulation 2020/2092).
The most important measures introduced by the legislative package:
1) Establishment of an Integrity Authority and a new Anti-Corruption Task Force
Instead of joining the European Public Prosecutor’s Office, the National Assembly (Act no. XXVII of 2022) set up a state agency called Integrity Authority, and the Anti-corruption Task Force which serves as a forum to involve non-state players in the fight against corruption.
The Integrity Authority is charged with the task of protecting EU funds. Its role is complementary to other, already existing anti-corruption agencies. Most of the Authority’s powers are soft. It has the competence
- to request information,
- to carry out analyses,
- to make recommendations,
- to suspend temporarily ongoing public procurement procedures,
- to request a court to declare that a state body competent to protect EU funds has failed to act and to comply with the Authority’s earlier request to act.
The president and the vice president of the Integrity Authority were selected in the following procedure. The Directorate General for Audit of European Funds (established by the Government and placed within the Finance Ministry) selected the three members of the Eligibility Committee. This Eligibility Committee published a call for application for the positions and shortlisted the candidates. The president and the vice-president of the Integrity Authority were selected from the short list by the president of the State Audit Office. The selected candidates were appointed by the President of the Republic.
The Anti-Corruption Task Force is a forum to that offers Hungarian NGOs a change to get involved in the fight against anti-corruption. It convenes twice a year. Its competence is limited to form an opinion on the anti-corruption framework, to publish an annual report, and to formulate recommendations.
2) Introduction of an extraordinary legal remedy to bring corruption cases to justice by private prosecution
Bill no. 706 would allow private individuals and legal entities to take certain serious crimes related to corruption, such as embezzlement, misappropriation of funds, fraud, budgetary fraud, etc., to court if the prosecution service fails to do so. In this case, private individuals and legal entities can challenge the prosecutor’s decision, and after a long and complicated process, an investigate judge may order the prosecutor to continue the criminal proceedings. Alternately, private individuals and legal entities may bring the case to court as a private prosecutor.
3) Introduction of new rules on asset declarations
In July 2022 the National Assembly amended the law on the MPs’ asset declarations. The duty to submit a declaration on an annual basis was abolished; and the obligation to submit a declaration only in case of a change in the MPs’ income and position occurs was introduced. In addition, MPs were required to declare their income within ranges (not the exact sum) and their family members were no longer obliged to a submit a declaration at all.
Act no. XXXI of 2022 bascially just withdrew most changes put in place in July.
4) Introduction of new rules on conflicts of interest in public interest asset management foundations
Public interest asset management foundations are established by the State by operate as private foundations. In 2021 the National Assembly transferred EUR billions worth of public assets (including state companies’ stakes, properties, such as castles, resorts, parks, theater, and higher education institutions) to these foundations. Some of them are financed by the State, others receive their funding from previously state-owned companies. The assets transferred to the foundations cease to be public assets, and the State loses control over them. The members of the foundations’ board of trustees (who exercise the rights of the founders) were appointed by the current government.
The new legislation (Act XXIX of 2022) stipulates that public interest asset management foundations and the legal entities established or maintained by them fall under the obligation to carry out public procurements.
Also, according to the new rules on conflicts of interest, members of the boards and the supervisory bodies of the foundations shall not take part in the decision-making of the foundation in case of a conflict of interest with regard to that particular decision. Those affected by a conflict of interest, or the risk or appearance thereof shall report this before the concerned decision would be adopted.
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